Chrysler’s Future Still Uncertain – Would You Buy A Hyundai-Made Ram?
Jason Lancaster | Nov 15, 2010 | Comments 12
Despite receiving a massive bailout from U.S. and Canadian taxpayers, the long-term future of Chrysler-Fiat is still up in the air. According to Steve Rattner, the former Obama administration “car czar” who orchestrated the Chrysler bailout package, there were serious misgivings about Chrysler’s future by many in the Obama administration in 2009. Rattner’s book Overhaul indicates that Chrysler was bailed-out more to prevent job losses than based on any certainty that Chrysler could remain a viable automaker.
As reported recently by the Detroit News, financial analysts at international mega-lender Deutsche Bank echo these same concerns. While Chrysler has generated operating profits in the past year, they’re still a money-losing company (nearly half a billion year to date). Deutsche Bank’s analysts believe that Chrysler’s future hinges on new Fiat-based product due out next year – starting with the Fiat 500.
Deutsche Bank's analysts believe the future of Chrysler hinges on new products from Fiat, including the Fiat 500
While a new line of Fiats might just save Chrysler, it’s also possible that they won’t. If Chrysler-Fiat has to throw in the towel, the Ram brand would be made available for sale…something Hyundai might love to see.
Hyundai Wants To Sell Big Pickups
It’s no secret that Hyundai has been showing re-skinned Rams with Hyundai badges to American consumers. Korean newspapers have been reporting that Hyundai execs are interested in becoming a full-line automaker, and as TundraHQ commenter Jason F. put it, “Hyundai has the engineering abilities and more $$$$ than they know what to do with” to build a pickup.
One possible look for a Hyundai version of the Dodge Ram
The timeline of a Chrysler collapse might also coincide nicely with Hyundai’s rumored goal of offering a pickup by 2016. If new Fiat products fail to deliver sales in 2012 and 2013 – OR if the US auto market fails to return to volumes seen in the late 90’s – Chrysler will be running low on cash by the middle of the decade. When automakers run out of cash, they start selling off brands (see Hummer, Volvo, Jaguar, etc.). Hyundai has the cash to buy Ram (they’re tracking to earn $4 billion in profits this year), and they seem to have the desire to sell full-size trucks.
Considering that Hyundai is one of the only large automakers without a full-size pickup, they are the most logical buyer for Ram (where it to become available).
The Ram Brand Is Declining
Of course, it’s possible that Hyundai might not want to buy the Ram brand. Ram’s sales are falling off quite a bit (the Tundra could outsell the Ram 1500 this year) and Chrysler-Fiat CEO Sergio Marchionne has acknowledged that the Ram brand is losing ground. According to the Detroit Free Press:
Marchionne conceded that the Ram brand is losing ground in full-size pickups, a crucial source of profits for the Detroit automakers. “We have underperformed against the competitors. I think we know this,” he said when asked about Ram trucks during a call with industry analysts and news media. Ram brand trucks had only 14.2% of the U.S. market, down from 16.6% a year ago, despite solid product reviews
Don’t get us wrong – the Ram is a fine pickup – but Chrysler-Fiat’s future is cloudy. Despite the success of the new Jeep Grand Cherokee, Chrysler still isn’t selling enough cars to meet their “survival volume.” When you add it all up:
- The Obama administration wasn’t sure that Chrysler could be saved
- Bank analysts say Chrysler-Fiat’s survival is uncertain
- Ram sales, which represent large profits for Chrysler-Fiat, are down
- Chrysler-Fiat isn’t meeting their self-stated “survival” sales volume
There are a lot of reasons to be pessimistic. If Chrysler-Fiat does indeed fail, Hyundai might sweep in and buy Ram. The question is:
Would you buy a Ram designed by Chrysler-Fiat and built by Hyundai?
Filed Under: Auto News
Uh… No!
Un… NO, NO!
Man, that front end is seriously slopped and out of line for a truck. The govt. had NO business interfering with GM and Chrysler’s problems. Just because they were both heading into bankruptcy doesn’t mean they deserved a bailout. They should have let them declare bankruptcy, go thru the proceedings, and come out BY THEMSELVES leaner and stronger. My wife’s company was in bankruptcy, came out leaner and stronger, and all is well again or so lets hope ALL BY THEMSELVES. GM and Chrysler are big boys that could’ve handled it themselves just fine without a cash handout. I’ll never buy a Dodge/Chrysler ever again and still not certain about GM as of now. The whole GM bailout put a nasty taste in my mouth that is hard to swallow along with I worked very hard and loyal for 6 fricking years for GM who closed shop and moved elsewhere thus putting us office workers without jobs. Thanks GM for everything – NOT!
mk – I can empathize. I read Rattner’s book Overhaul, and he makes a compelling case for the bailout. The issue, as Rattner tells it, is that so many companies were all on the precipice. If GM had gone down, they wouldn’t have made their payments to suppliers, which in turn would have put the suppliers into bankruptcy. Other manufacturers like Ford wouldn’t have had any suppliers to send them parts…and then they would have filed BK too. Letting GM collapse probably would have killed Ford too (at least that’s what Ford CEO Alan Mullaly has said).
Normally, BK proceedings for big companies like this take years. Due to government involvement, the BK process took only a few weeks.
I’m not saying that I don’t understand why people are upset, all I’m saying is that it was a complicated choice to make. It’s interesting that George W. is the man who started the automakers down this path. Had he not decided to provide GM with cash in December 08′, Obama never would have had a chance to do his bailout.
Anyways, thanks for commenting.
Maybe this is a good time for Toyota
to reconsider getting into the HD Pick Up truck market. Diesel of course.
Maybe they can put that older model Sonata front end and slap it on a Titan and they can see how this will work. What would you call it? Simple call it “Quits”.
This truck looks like a disaster waiting to happen.
Art64 – I agree.
Mickey – Hyundai would definitely have their work cut out for them breaking into the truck market. People really don’t believe in the products reliability…and those kinds of questions would hurt them a lot. Still, I think it’s a distinct possibility they get involved with the Ram in the next few years.
Steve H – I hear you.
To all – That image is just something we sort of “came up” with…not necessarily pretty.
that front end literaly looks EDIT. seriously, if hyundai wants to get into the heavy duty segment they really need to get wit it, that thing has no masculine touch to it wat so ever, but good news for hyudai is that the EDIT people would probably want to buy that truck.
No I wold just buy a Ram because it’s 10 times better than a Tundra
easyrider – LOL – Everyone is entitled to their opinion, but saying that ANY new halfton is 10x better than any OTHER new halfton is clearly hyperbole.
I like some things about the Ram, and I would definitely be open to buying a Ram built by Hyundai. In fact, based on the respective quality ratings of the average Hyundai and the average Chrysler over the last decade, I think a Hyundai-made RAM would be better.
Not 10x better, but 10% better (again, based on quality ratings from Consumer Reports, JD Power, RL Polk, etc.)
No.
The truck is ugly, Hyndai has never had an original design in the history of the company.
They have copied Honda, Mercedes and Lexus in all of the designs.
The cars are junk.
Bill – I agree that Hyundai doesn’t do much in the way of original design. They’ve definitely been trying to copy Toyota, Honda, Lexus, and Mercedes…and it’s been working. Sales growth has been strong.
As for Hyundai being junk, I’m not so sure. JD Power has been giving Hyundai quality awards for most of the last decade, and other quality and reliability surveys have come back positive over the last few years too. I think Hyundai’s quality is probably as good as or better than most.