Fiat Chrysler Automobiles N.V.’s (NYSE: FCAU) Ram was just hit with a massive recall. It is almost certainly a coincidence that the full-sized pickup brand has discounts that total over $11,000 on one model and more than $10,000 on another.
The full-sized pickup wars have become brutal as growth within the three-truck sector has moderated. These pickups are the three top-selling vehicles in America.
Ford Motor Co.’s (NYSE: F) F-Series is the perennial leader. Ford sold 275,938 of these in the first four months of the year, up 7.4%. The F-Series represents about 20% of all of Ford’s U.S. unit sales. General Motors Co.’s (NYSE: GM) Chevy Silverado reached sales of 168,621 from January through April, down 5.8%.
Ram sales rose 5.8% for the period to 162,520. It is too early to estimate whether the recall of 1.25 million of the pickups will affect sales. The defect can cause both seat belts and airbags to malfunction in a crash that causes the pickup to roll over.
The Ram discounts include $11.506 in “total value,” another term for incentives and discounts. The deal applies with some restrictions:
Offer applies to Big Horn Crew cab models equipped with a V8 engine. Average Dealer Discount is based on a national sales survey of average variance between MSRP and negotiated vehicle price offered by select Ram dealers nationwide before other advertised incentives are applied. Discount may vary based on option package and features, financing terms, availability and other factors; dealer determines vehicle price. When financed through Chrysler Capital. Not all buyers will qualify. See dealer for details. Must take retail delivery by 05/31/2017.
At least Chrysler can make money on the financing. It may not make money on the truck.
Ram has another discount package that totals $10,227 in total value. It also has a 0% APR financing offer on its Laramie version. Other models carry discounts that include $5,000 cash back and other bonus cash offers that are smaller.
Ram has a challenge as it tries to recover from the publicity of the recall. But apparently even before the catastrophe it was discounting trucks.
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