Chrysler bets big on revamped Ram pickup

Typography

The new Dodge Ram pickup truck models from Chrysler will compete with Ford Motor Co's <F.N> redesigned F-150 trucks at a time when sales in the segment are under pressure from a housing slump and high gasoline prices.

DETROIT (Reuters) - With a herd of Texas longhorn ambling down a Detroit street as a backdrop, Chrysler LLC on Sunday unveiled an updated version of its best-selling full-size pickup truck, one the No. 3 U.S. automaker is banking on to drive more profitable sales in a tough market.

The new Dodge Ram pickup truck models from Chrysler will compete with Ford Motor Co's <F.N> redesigned F-150 trucks at a time when sales in the segment are under pressure from a housing slump and high gasoline prices.

The 2009 Dodge Ram, which will be available this fall, features a number of improvements including 41 exterior and interior storage spaces, twice as many as the current model.

It also features a variety of interior improvements and safety upgrades, including a heated steering wheel, trailer sway control and a built-in spoiler. Jim Press, the company's co-president and head of sales and marketing, said the spoiler gave the Ram "best in class aerodynamics" and permitted Chrysler to "separate itself from the rest of the herd."

!ADVERTISEMENT!

Looking forward, Press promised a turbo diesel version of the Ram in 2009 and a hybrid in 2010.

Chrysler is rolling out its first hybrid light truck, the Dodge Durango, later this year. The automaker developed the hybrid technology in a consortium with General Motors Corp <GM.N>, BMW AG <BMWG.DE> and former parent Daimler AG <DAIGn.DE>.

The new Dodge trucks go head to head with a new version of Ford's market-leading F-150, which also debuted at the North American International Auto Show in Detroit.

It will also face tough competition from the Chrysler Silverado from General Motors Corp <GM.N> as well as Toyota Motor Corp's <7203.T> Tundra, both of which were just redesigned.

U.S. sales of full-size pickups, which are used as work vehicles by contractors, farmers, ranchers and as recreational rides for millions of other Americans, fell just over 3 percent last year.

The Dodge Ram, which ranks third in the segment, managed to push its share of sales slightly higher but at the cost of industry-leading sales incentives that cleared inventory but sapped profitability.

For 2007, Chrysler spent an average of over $4,500 in sales incentives including concessional financing and rebates for its light trucks, industry tracking firm Autodata Corp estimates.

That was 6 percent more than Ford spent and more than 40 percent above sales incentives at GM, which was better able to hold the line on pricing with its newer Silverado.

Under former Home Depot Inc <HD.N> Bob Nardelli, Chrysler has accelerated its push into hybrid and other fuel-saving technology while looking to partnerships with Renault SA <RENA.PA> and China's Chery Automobiles.

But analysts have said that Chrysler, which has the worst fleet mileage of any major automaker, would also have to defend its turf in the truck market, where margins have historically been much richer than in passenger cars.

In a mark of how hard-fought truck U.S. truck sales have become, Toyota fell just short of its sales goal for the Tundra last year despite turning uncharacteristically rich incentive offers of its own.

Cerberus Capital Management controls a 80.1-percent share of Chrysler. Former parent Daimler AG <DAIGn.DE>, which spun off Chrysler in a $7.4-billion deal last year retains the remaining 19.9-percent stake.