One of the more intriguing tidbits that dribbled out of Chrysler's grueling 8-hour press conference on Wednesday is that the company is considering getting back into the heavy truck business. They're not talking about heavy duty pick-ups, they're talking about 18-wheelers.
Up until the early 1970's Dodge sold heavy trucks, including semi-tractors. In fact, Dodge trucks were famous the world over. But like GM and Ford, the Chrysler Corporation decided to get out of that business at a time when the commercial truck sector was under pressure.
When times are good heavy trucks generate a significant amount of profits. Mercedes-Benz, Volkswagen, Renault, Toyota (Hino), Nissan and Mitsubishi (Fuso) are still in the business. But it takes a lot of capital investment to get into and stay in the highly cyclical heavy truck segment, which is why the American car companies abandoned that market years ago.
In this case, the idea to get Chrysler back into the heavy truck market is Fiat's, not Chrysler's. And that is precisely why this could actually happen.
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
Fiat is one of the largest heavy truck producers in the world, through its Iveco subsidiary. Most Americans are unaware of the company and its trucks because it doesn't sell them in the American market. But it sure would like to.
In fact, Iveco trucks are not sold in Mexico or Canada either, meaning it's missing out on one of the largest markets for heavy trucks in the world. It would take a lot of time and effort for Iveco to establish a distribution network to sell its trucks. But with Fiat taking over Chrysler, presto!, the Dodge dealer network offers an instant distribution system.
Or, I should say, the Ram network. As you're undoubtedly aware, Fiat is breaking Dodge trucks off from the Dodge brand and branding them as Rams. They must be thinking that as long as they're creating a new truck brand, why not extend the line from compact pick-ups all the way up to Class 7 or 8 semis?
And throw a couple of commercial vans into the mix while you're at it. Chrysler needs something to replace the Sprinter, and Fiat has just the vehicle it needs in the Ducato. Since Ford is bringing the Transit Connect to the American market, Fiat also has the perfect competitor to go up against it with the Doblo. In fact, like the Transit Connect, the Doblo is also made in Turkey, meaning it won't get killed by exchange rates.
It's easy to see why Fiat is thinking along these lines. By bringing its Iveco line to the NAFTA market, it helps justify its takeover of Chrysler. By providing Ram dealers with the kinds of commercial vehicles they haven't had in decades, it can potentially make them a lot more profitable.
This is a small chunk of Fiat's master plan for Chrysler, but I find it to be an intriguing piece. Whoever would've thought we'd live to see the Pentastar people back to selling big rigs?
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