As the No. 2 best-selling truck in America, the Chevrolet Silverado is clinging to its shrinking sales lead over Ram 1500 in a high-stakes fight that few anticipated.
This is not just about prestige and tradition. This is about money. Trucks generate crazy profits for automobile companies.
“Something better change,” said Karl Brauer, executive publisher of Kelley Blue Book. “I think people would be surprised to see the market share split between Ram and Silverado. They’ve already moved more than most people would have ever believed. That’s not a good trend line for Chevrolet.”
He continued, “Ford F-Series has managed to stay stable and Ram has managed to climb mostly at the expense of Chevy.”
Fiat Chrysler’s Ram closed the gap dramatically on Silverado from 2017 to 2018, according to Kelley Blue Book:
The gap disappeared in the first quarter of 2019, with Ram selling 120,026 trucks versus 114,313 Silverados sold during the period, according to company filings.
Pricing played a role in Ram’s progress, said Michelle Krebs, executive analyst at Autotrader. “Ram is putting far more money on the incentive table to boost sales. Chevrolet incentive offers have been very moderate.”
GM reported a 15.7% quarterly drop in Silverado sales from 135,545 a year ago.
The full-size pickup market segment is growing about 2% a year, so Ram is recruiting buyers once loyal to other brands, Brauer said.
“The low cost of fuel and the increasingly wide range of full-size truck iterations have made them capable of serving almost any need,” he said. “Plus, the economy is generally good so more people are doing lifestyle stuff — water-skiing, camping, off-roading — that a truck is good for. This is why new buyers are coming in and where Ram is getting more of them than Silverado.”
Dealers say once truck customers go elsewhere, they’re lost for at least three years on average because of lease commitments. Timing is everything.
“The half-ton segment is a bare-knuckle battle,” said Nick Cappa, Ram spokesman.
For now, 2019 Ford F-Series dominates the segment and continues to grow despite not having an all-new version of its F-150 truck in five years.
It sold 38% of all pickups in the United States in 2018, with more than 1 million F-150 and Super Duty trucks sold globally. That includes 909,000 in America at an average transaction price of $46,700, which is a new annual record. The truck franchise generates more than $50 billion for Ford. The Silverado lost 1% of its market share to Ram in 2018 with data showing Silverado sales did not grow but Ram did by 7%, according to Kelley Blue Book. Ford, Silverado and Ram dominate 84% of the sales in a segment that includes GMC Sierra, Toyota Tundra and Nissan Titan.
Ali Reda, one of the top selling car salesmen in the United States, said he feels the pain every week at Les Stanford Chevrolet Cadillac in Dearborn, Mich.
“It’s a regular thing,” he told the Detroit Free Press. “We struggle with this on a daily basis. The new Silverado is generating some traffic and buzz, mostly with males 25 to 50, because it’s beautiful. But we just can’t compete.”
“They leave and go get a Ram. While people love the aggressive design and stylish look of Silverado, prices are scaring them away. Chrysler is far more aggressive at incentivizing their Ram.”
Incentives that can exceed $10,000 or even $15,000 means a smaller lease payment, Reda said. “For years, we’ve been saying they can’t keep leasing Ram for this dollar amount and not make any money but they keep doing it.”
Brand loyalty goes only so far, he said. “A $200 payment difference every month is too much to overcome. Then we have a very hard time getting those people back once you lose them. We spend millions of dollars getting a customer to walk in the door. All you need to do is a better job of keeping them.”
Ford is “very good at retaining customers once they capture them,” said Reda, who often refers Ford buyers and Ram buyers to friends in other dealerships.
General Motors says its rollout of the Silverado is strategically designed to have a cadence that begins with more expensive trucks and expands into a wider range of trucks available in dealerships starting in April.
Jim Cain, Chevy spokesman, said Ram is essentially paying people to drive its trucks rather than attracting buyers with quality.
“When you pull out all those stops, you make some short-term gains, but it’s like a hollow chocolate Easter bunny,” he said. “It looks good, but when you bite into it, the quality just isn’t there. It crumbles.”
“GM plays long ball,” Cain said. “You may sell a Ram once, but we’ve got a pretty formidable franchise and a great long-term strategy.”
Lauren Langille, a GM spokeswoman, added, “Ram spending is just completely out of control. … Almost 40% of Ram sales are done with up to 20% discounts.”
Is Ram playing fair?
“They’re being more aggressive. That’s not a bad thing,” Reda said. “I hope to see people back when our pricing drops. Right now, the Chevy Equinox is our best seller.”
Ford and Ram said price cuts are simply designed to start a conversation.
“Incentives and rebates are a normal part of the competitive environment,” said Mike Levine, Ford North America product communications manager. “At any time, there’s always some type of discount on a truck.”
No question, the strategy is working.
Earlier this month, Fiat Chrysler reported selling 45,187 pickups in March, up 9% from a year earlier and a new record for March, said company spokesman Jeff Bennett.
The first three months of the year saw a 15% jump in sales, from 103,964 to 120,026 Ram 1500 and Ram Classic vehicles, the company reported.
FCA made the call last year to sell its newer Ram 1500 pickup alongside its older version, the Ram Classic, Bennett said.
The “two-pronged strategy” of selling both outgoing models and new is growing the market share but not really a fair comparison to all-new light duty Ram 1500 vs. all-new, light duty Chevy Silverado, GM contends.
Industry analysts said they’re impressed with how Ram has carved out a niche in the luxury pickup segment that features impressive technology, much like Lincoln Navigator has redefined the upscale SUV that can reach $100,000 with minimal effort.
“Ram exudes excitement. It would not be remotely surprising if the Ram full-size pickup permanently passed the Chevrolet full-size pickup within one to three years, sealing Ram’s No. 2 position behind Ford,” said economic analyst Jon Gabrielsen, who advises auto companies and suppliers. “This is not a new battle that just sprung up. It has 10 or more years of momentum behind it and hence, for all practical purposes, will not be changed in the long run by Chevy doing anything.”
Fiat Chrysler’s five-year plan outlined in 2018 aspired for Ram to overtake Silverado.
“These truck owners are very, very brand-loyal,” said Ashton Elder, marketing manager of Elder Chrysler Dodge Jeep Ram, a staple in Athens, Texas, for 35 years.
“We had a Ford owner come in who had a Ford since he was a little kid. You run into generation owners,” she said, noting an uptick in Ram 1500 business. “But we’ve been driving Ram since the 1990s, hauling 38-foot rigs and four or five horses. We’ve seen the progression and what we offer ranchers and farmers and rodeo people. The power has progressed. We’re seeing more growth than ever.”
It doesn’t hurt that the 2019 Ram 1500 was named North American Truck of the Year. Or that its luxury interior combines with enough pulling power to get these guys down the road, Elder said.
“I barrel-raced and my brother was a calf roper,” Elder said from the small city southeast of Dallas known as the Black-Eyed Pea Capital of the World. “We drove this truck on 15- and 25-hour hauls. We’ve used heavy duty trucks and we’ve seen the changes.”
Texas is a prime truck market and the focus of significant advertising dollars meant to woo new customers.
F-Series, Silverado and Ram are the best-selling vehicles of any kind in the United States and play a more prominent role as consumers shift from passenger cars. Truck profits pay for future innovation.
No question, the big Ram 1500 is trying to redefine itself and its customer in an attempt to penetrate the fiercely loyal truck buyers using other brands, said Jessica Caldwell, executive director of industry analysis at Edmunds. “Ram is a stronger contender recently. You have to have towing capacity and payload and interior space and amenities.”
She added, “The market is a bit more cutthroat because there are so few players.”
A decade ago, Chevy ran a TV ad with spokesman Howie Long mocking a Ram driver for his heated steering wheel and asked whether he had a manicure, too. The ad asked whether you’d rather have a heated steering wheel or good fuel efficiency.
Today, most high-priced trucks offer both, including the Silverado.
Ford is holding its healthy lead despite newer competitive models.
“Ford has the oldest trucks in the business,” Cain said, touting the Silverado.
However, Ford debuts a new F-150 pickup truck in 2020, including a new hybrid powertrain with beefed-up towing and payload that can also operate as a mobile generator on job sites.