The Ram division of Fiat Chrysler Automobiles N.V. (NYSE: FCAU) has posted very aggressive incentives to sell some of its most popular models. On some Ram 1500 models, the deal is 0% APR financing for 72 months. That’s six years.
Among the reasons Ram management has offered such aggressive financing is that its sales have fallen behind Ford Motor Co.’s (NYSE: F) F-series, the most popular vehicle in the United States based on sales. So far this year, F-series sales are up 10.6% to 658,636. Ram sales are higher by 3.8% to 374,901. That means F-series sales are 76% greater.
Ram has had quality products, at least according to several industry studies. In the new Consumer Reports Car Brand Reliability Study, Ram ranked 25th among 27 brands. Ram ranked fifth from the bottom on the J.D. Power Vehicle Dependability Study, which covered 31 brands. The research firm reported how it makes the reliability measure:
The Vehicle Dependability Study (VDS) examines issues reported by original owners of 3-year-old vehicles. This study measures car reliability by analyzing problems experienced over the past 12 months of ownership in such areas as: features and controls; engine and transmission; entertainment and navigation; heating and cooling; the overall driving experience, and more. For ratings and information about the most reliable cars, click on a category below.
Whether Ram vehicles last more than six years, and presumably most do, or people keep their new Ram trucks for life, the period is unusually long for any car or light truck. That begs the question why the incentive is so aggressive.