Chrysler's New Ram Plan Poses Brand Jam

Posted by: David Kiley on September 7, 2009

dodge-ram-logo.jpg

Chrysler is potentially headed for a brand problem that will rival the pickle that GM is trying to extricate itself from.

Here is the deal. Chrysler has three main brands at the moment: Chrysler, Dodge and Jeep. But it has made it clear to the ad agencies pitching its ad account that it is splitting off its pickup truck and commercial vehicle business off to a new brand—Ram.

That’s right. Going forward, and as soon as Chrysler has the idea to run with, the pickup it sells now won’t be sold as Dodge Ram, but rather….Ram. Other vehicles that will come from the Fiat-Chrysler tie up in the commercial segment will also be called Ram.

So, now we are up to four brands to support. Now, add the Fiat 500, which will be sold as a Fiat when it arrives in Chrysler showrooms in 2011. And, don’t forget Alfa Romeo, which Fiat will sell through Chrysler distribution in key markets that make sense for the Italian sport car maker.

This seems like a lot of brand differentiation to manage and support by a company that has been poor at both.

As I look at auto sales numbers through August, I see a 9.2% market share for Chrysler spread among the three brands it has. That share is inevitably going to go down as the company pares models. Indeed, Merrill Lynch projects that Chrysler loses a whopping five to six points of share in the next four years unless it comes up with some product surprises from the Fiat alliance.

If you consider it likely that Fiat and Alfa-Romeo combine for less than 1 point of share, then you have five brands potentially carving up something between 4 and 6 points of share, and that is if the company over-achieves. Also…four brands at a single showroom, while we wait to see how the company sort out the distribution real estate for Alfa at Chrysler dealerships.

This goes to brand/distribution/marketing efficiency. Toyota has 16.5% of the market spread across three brands. GM has 16.7% of the market with the four brands it plans to go forward with—Chevy, Cadillac, Buick, GMC.

If Chrysler isn’t clever beyonid all expectations, it is going to have a brand jumble that will make people look to GM as a benchmark of brand/marketing efficiency.

Reader Comments

alan

September 7, 2009 4:09 PM

The Dodge brand is a liability.

Any new name is better than the old.

Schmeltz

September 7, 2009 7:44 PM

The future for Chrysler LLC as I am envisioning will perhaps look like:

Fiat - cars and small crossovers
Ram - pick-ups of all sizes
Jeep - SUV's
Alfa Romeos - specialty sports cars

My prediction if this company even survives the next few years, (and that's a big, big IF) will likely desintigrate the Chrysler and Dodge brands in the name of 'survival of the fittest' and to eliminate model and brand overlap. A sad outcome for a once great company.

Antonio311

September 7, 2009 7:55 PM

Again Business WEAK is distorting the facts, and bashing Chrysler. Chrysler has always maintained roughly 10% of the US market share, and will continue to do so well into the future. Also the Ram is the worlds BEST pickup, so that market share will be increasing while Ford, GM & Toyota truck Market share declines. Also since Chrysler has been almost absent from the compact car market the new Fiat models will again give Chrysler MORE market share, not less! David Kiley forgot to mention these key factors, because Business WEAK Loves to BASH Chrysler every chance they get. And remember Chrysler still continues to sell about 2 million vehicles per year, they are also the # 1 selling brand in Canada, so millions of people are purchasing Chrysler products and enjoying them eveyday!

From Kiley: The Ram as best pickup in the world is a tough sell. I like it a lot. And it is the best on-pavement truck in the segment as far as ride quality. But despite Car and Driver's review that it bests Ford and Chevy, sales, market share and QRD ratings make it a tough sale as best. Coolest looking? I'll give you that. But best?

Commie stoge

September 7, 2009 8:52 PM

When I read this, all I could think of was the old Abbot & Costello Baseball Routine "Who's on First"; which i'm sure is on youtube.

VVV

September 7, 2009 11:20 PM

What a ridiculous name!!! Ram... another American company idiot decision. Another example of how much Detroit is disconnected with the market. They should take all the money and energy they're putting into this and use it to make a better product.

James Mason

September 8, 2009 3:17 AM

I have a $100 bet going that Chrysler will be in bankruptcy protection again within 18 months.

Uriah

September 8, 2009 7:38 AM

Ever wonder why the Corolla is the best selling car in the world? One reason and one only - Toyota kept the name around through the generations even though today's car is nothing like the first, except for the name. Save for a couple rare exceptions, American car companies don't do this and thus will never have the opportunity to build up a brand. What are they teaching these guys that major in marketing, anyway? Keep the Dodge name on the trucks, Chrysler, and do away with the car line (except for the Challenger, of course).

Cemmee

September 8, 2009 9:20 AM

The issue if not if CHY can manager four brands, that it can be done is evidenced by Biotech/pharmaceutical, consumer products, apprael and other companies that have performed well managing multiple brands.The problem is that American car companies design ugly and unappleaing cars to any consumer group.

Jeff B

September 8, 2009 9:50 AM

Chrysler's continued focus on branding instead of product would be laughable, excpet for the fact that the money they waste on this will be our taxdollars. If we needed a sure sign that Chrysler execs are still clueless about what it will take for them to survive, here it is. Chrysler is at the very bottom of nearly every consumer & auto enthusiast list. You think it matters to anyone at all whether they call them Chryslers, Rams, or Twinkies? Wake up. Smell coffee. Build better vehicles.

GM Daughter

September 8, 2009 10:28 AM

LOLATI! Why don't they just reorganize so that Dodge becomes the commercial line and forget trying to launch RAM???

jwk

September 8, 2009 12:21 PM

"So, now we are up to four brands to support?" Uhm, Chrylser+Jeep+RAM is three brands. Ram replaces Dodge. Dodge is gone. Finito. There still screwed, but get the math right!

CAL

September 8, 2009 1:09 PM

Never mind all the chatter about shares and numbers, this seems pretty simple and logical. Chrysler wants to sell the Ram trucks, SUVs and vans in both it's Dodge and Chrysler/Jeep dealerships. It wants to offer the Chrysler dealers the hot-selling Rams. Especially sensible, if they start selling Fiat/Iveco vans/utility vehicles as Rams. More locations selling the Rams and more shopper traffic for the Chrysler dealers should add up to more sales. Makes sense as Chrylser/Jeep and Dodge work to differentiate their non-truck offerings so that they do not cannibalize each other's sales unlike GM with Pontiac/GMC truck dealers competing with Chevrolet/Chevrolet truck dealers next door. Also, as far as the Alfas and Fiat 500 go, do not be surprised if they follow the Mini's path and require separate showrooms for them to reinforce the brand difference.

Christian

September 8, 2009 4:59 PM

Same old "genius" ideas from Mo-Town. The U.S. government should have let Chrysler fail the first time around when Lee Iacocca went begging for money. Chrysler will never make it. With no exceptions, their vehicles lag in quality, design and technology. It has been like this for decades and will remain like this. I just hope that when they are near bankruptcy again (and it will happen again) our Nation's leaders have the courage to say "no" and let Chrysler rest in peace.

ps

September 9, 2009 7:56 AM

Here's an idea. Keep the Dodge name and resurrect DeSoto and Plymouth. The do massive badge engineering with slight cosmetic changes. Keep the cars boring and unreliable. Then bring Roger Smith back from the grave and you have a real American car company.

Edcetera

September 9, 2009 10:03 AM

The Dodge Ram as the "best" truck? Gee, why is the Ford F-150 always in the top selling list then? And wasn't there some talk of having Chrysler build Nissan trucks or vice versa? I have to agree with one commenter, will Chrysler again be on the sales counter if Fiat finds it is a drag on its finances and will there be squabbles (similar to the Daimler-Chrysler era) between Torino and Auburn Hills? I'm sure there will be plenty of grist for the automotive press on this one. Happy Motoring

kasjun

September 20, 2009 4:35 PM

I think Dodge should remain with the Ram. It takes years to build a customer base and now that Dodge has finally built a fantastic truck this is not the time to be fiddling around with a brand change. The new Dodge Ram is a game changer and if you don't believe me then you have not driven it.

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