Chrysler Hyundai Truck Partnership – Pros and Cons
Jason Lancaster | May 14, 2010 | Comments 11
Earlier today, we evaluated Hyundai’s desire to become a full-line automaker. While that analysis showed that Hyundai can’t expect their success as a car company to carry over to selling trucks, it doesn’t evaluate the idea of Hyundai selling re-badged Rams.
A concept of a Hyundai Ram 1500
Here are the pros and cons of a Chrysler-Hyundai truck partnership (HINT: It’s not going to happen).
Pros
Chrysler needs money. It’s no secret that Chrysler isn’t profitable. While the bottom line is moving in the right direction, Chrysler probably isn’t going to be a profitable company in the next 12-18 months. If Chrysler agreed to produce Hyundai Rams, they would cut their own production costs, boost profits, and maybe even get some cash from Hyundai in the process.
Hyundai can sell a few more vehicles. While Hyundai isn’t going to “light it up” with a re-badged Ram, there’s no doubt they can move a few thousand units.
Hyundai can test market at a low cost. If Hyundai really wants to become a full-size truck manufacturer, a great way to test the concept would be to sell a few of Rams and see how it goes. It’s much cheaper to license the Ram than it is to design a truck from the ground up and hope for the best.
Cons
Hyundai could de-value the Ram. Hyundai has two claims to fame, one of which is low cost. If consumers associate the Ram with low-cost, it could hurt consumer perception of the Ram’s luxury features like great interior quality, great ride, and power.
The Ram could damage Hyundai’s reputation for quality. Hyundai quality has been nothing short of astounding for the last few years – the company consistently places at or near the top of major quality studies and consumer evaluations. In fact, quality is Hyundai’s second claim to fame. While the newest version of the Ram is Chrysler’s best effort yet, it might not match Hyundai quality standards with all of the cost-cutting going on at Chrysler right now.
Hyundai might steal sales from Ram. Chrysler can structure their agreement with Hyundai any way they want, but at the end of the day Chrysler can’t force Hyundai to match their pricing. That’s called “collusion,” and it’s not legal. If Hyundai decided to offer aggressive financing one month, Ram customers might buy their truck from Hyundai instead of their local Chrysler dealership.
Ram loyalists might revolt. Without diving head first into negative stereotypes, there’s no denying that a lot of Ram owners would find the idea of working with Hyundai to be “working with the enemy.”
Bottom Line: Chrysler’s most important vehicle for the next 2 years is the Ram, and it makes little sense to allow a competitor to white-label it. Unless Chrysler’s financial situation becomes especially dire, they’re not likely to build Ram trucks for Hyundai, Nissan, or anyone else.
Filed Under: Auto News
I would think Chrysler would use the title of Titan before Ram. Why screw the name of Ram when they can toy with the name Titan? You kill your bread and butter for the sake of venturing out with another manufacturer. You can weigh the difference here and Titan would do suffice.
AAAAAAAAAA That picture again. MUST…SCRATCH…EYES…OUT
LOL yes it’s a HORRIBLE image…..and I have to agree with Mickey’s comment as well. Hyundai still has the perception of “cheap” in my eyes and as well all know, most consumers are into the image a vehicle portrays.
OH GOD. that image…thats just gross, i doubt that would really sell well if that were gonna be the final product. plus the thing i dont like about hyundai is that they tend to copy other car manufactures. Their Hyundai Genesis is a great example.
ugly as sin, won’t sell and dodge will be making a big mistake for it if they cop out with Hyundai. Hyundai better stick to car sales or at the very least, small to mid size trucks first. I have test driven Hyundai cars and they are much better than past years, but their resale value is still not on par with Toyota, but that may be changing in the next few years.
Mickey – I agree. Chrysler’s best product is the Ram. Sharing it would be a mistake.
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Jeremy – Sorry man! 🙂
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TXTee – I think you’re right about consumer perceptions of Hyundai. It might take another 10 years to get past that, and Dodge shouldn’t risk the reputation of the Ram in the process.
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JR – That’s very true – Hyundai’s master plan is to simply copy what someone else does at a better price with the same or better quality…but that’s not a bad thing.
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mk – Agreed. Dodge would be foolish to do this deal. Resale value is definitely moving in the right direction at Hyundai, but it’s not industry-leading yet.
Hyundai, The Microsoft of the Autoworld.
” OOOOOO! We can make one like that too!”
We can do it Jeremy. We have the technology. We can make it faster, jump higher, and see farther. We can put 6 million $$$ into and then ask the US Govt for a bailout.
SOLD, When do we start?
I could pull Dodge out of the hole with this one.
Put a 4 cylender Cummons Diesel motor in it and blow the compition away in gas millage. 30 to 40 MPG
Isuzu and Mahindra have been makeing these trucks for years but the big 3 won’t let them into the USA becouse they can’t compete with them.
NOW’S THE TIME !!!!
a diesel engine would be better as there is no such thing as a diesel motor. (i was an electrician in the nacy)