Dodge revives work truck DCX pits new heavy-duty Ram against GM, Ford in profitable arena. Josee Valcourt / The Detroit News Web source: http://www.detnews.com/apps/pbcs.dll/article?AID=/20060302/AUTO01/603020369/1148 Daimler Chrysler AG's Dodge brand is barreling back into the booming work-truck market after a five-year hiatas with a heavy duty Ram pickup that could provide an important new profit stream. Dodge, which scrapped an undersize Dodge Ram Chassis Cab in 2001, unveiled a beefed-up, heavy-duty 2007 Dodge Ram on Wednesday in Atlanta at the National Truck Equipment Association. Dodge executives said the new Ram 3500 Chassis Cab is powerful enough to compete against rivals General Motors Corp. and Ford Motor Co. in the Class 3 segment, essentially the entry-level slot in the commercial truck market. Ford and GM currently claim nearly 90 percent of the market. The Dodge Ram 3500 will go head to head against Ford's F-350 and GM's 3500 series pickups. U.S. sales of Class 3-5 pickup trucks rose 42 percent in 2005 to 261,627, with Ford accounting for 63 percent of sales and GM holding 13.5 percent. "You have two competitors that are very credible and very much entrenched in the segment," said Joe Veltri, director of product planning and marketing for Dodge trucks. However, he said, Dodge has a solid track record in the pickup market. "This is similar to when we decided to get into the pickup truck segment," Veltri said. Over time, Dodge captured 18 percent of the U.S. light pickup market. Dodge also has the backing of its parent company, DaimlerChrysler AG, which has the largest commercial truck business worldwide, including the Freightliner brand. "We know how important the truck market is," Veltri said. He said former Chrysler CEO Dieter Zetsche, now head of the parent company in Germany, was a big supporter of Dodge's plans to re-enter the commercial segment. The new Ram will be sold later this year at 400 dealerships. Dodge hasn't announced a price for the new truck, which will be built in Saltillo, Mexico. Mike Donougue, vice president of Chrysler's body-on-frame product team, said executives researched the Class 3 segment for two years and test drove competitors' trucks before developing its own commercial version. The research helped convince Dodge engineers to develop a chassis cab that it calls "upfit friendly" -- meaning for instance, its flat frame system makes it easier to attach a tow truck body. The Ram 3500 Chassis Cab will offer a 5.7-liter gasoline engine and a 6.7-liter Cummins turbo diesel. It will have a gross vehicle weight rating of 10,200 pounds, the maximum weight of the truck when it's loaded to capacity. In an attempt to outdo competitors, the Dodge Ram 3500 also will feature a segment-best hauling capacity -- 10,200 pounds -- and the largest standard fuel tank, which holds 52 gallons of gas. Veltri said sales of the new chassis cab also could help Dodge's retail sales, since heavy-duty truck buyers tend to also purchase personal vehicles while at dealerships. Dodge's expansion into the commercial truck market is good for business, said AutoPacific Inc. analyst Jim Hall. "It's important from a profit standpoint and a sales volume point," he said. Commercial trucks provide an opportunity to make solid profits at a time when it's difficult to make money in the traditional light vehicle market, said automotive analyst Erich Merkle of IRN Inc. in Grand Rapids. "The light vehicle segment is so incredibly competitive. Whenever you have such high levels of competition, it has a tendency to drive prices down," Merkle said. But there are disadvantages to the commercial market as well. "It's incredibly cyclical. It basically depends on business spending," Merkle said. "If they're not spending money, that industry dries up real fast." The Class 3 segment is projected to continue growing this year, with sales of 172,000 units. In 2005, smaller commercial trucks generated sales of 166,856 units, up from 107,279 the previous year, said analyst Ken Kramer of Global Insight Inc. You can reach Josee Valcourt at (313) 222-2300 or jmvalcourt@detnews.com.
