Ram tough: FCA turns up the heat on GM and Ford in U.S. truck sales war
By Nick Carey, Paul Lienert and Joseph White DETROIT (Reuters) - At Planet Ford, which boasts it is the No. 1 Ford volume dealer in the Houston area, customers shopping for a 2019 F-150 pickup truck can get discounts from Ford Motor Co of more than $8,000 - and that is just the start.
By Nick Carey, Paul Lienert and Joseph White
DETROIT (Reuters) - At Planet Ford, which boasts it is the No. 1 Ford volume dealer in the Houston area, customers shopping for a 2019 F-150 pickup truck can get discounts from Ford Motor Co of more than $8,000 - and that is just the start.
The dealership's website lists a dozen other ways for truck buyers to get a price cut: being a student, a member of the military or a first-responder organization, a season-ticket holder for the National Football League's Houston Texans, or a member of the Farm Bureau.
"Ford is a sponsor of the Houston Rodeo, and offers an additional $1,000 rebate on the F-150 to people who volunteer with the rodeo," said Aaron Smith, general sales manager at Planet Ford.
Rodeo fans would feel right at home watching the frenzied competition in the U.S. large pickup truck market.
Fiat Chrysler Automobiles (FCA), General Motors Co and Ford escalated a price war in June in one of the few vehicle market segments on the planet that offers substantial profits - and one in which the three Detroit automakers enjoy an oligopoly, shielded by heavy tariffs on foreign competition.
During the past month, dealers for FCA's Ram truck brand, GM's Chevrolet Silverado and GMC Sierra trucks and Ford's F-series truck line have been offering discounts of up to 30% or more off the list price. The GMC brand is promoting June as "Truck Month," signalling to consumers that deep discounts are on offer until the close of the sales reporting period, July 1.
U.S. automakers report June and second-quarter sales next week.
While the heavy discounts are available in much of the country, not all dealers are offering such deals. More popular limited-production models such as Ford's F-150 Raptor are selling for full retail price.
Overall, discounts on light-duty pickup trucks in June have averaged $5,250, 11% higher than the year-to-date average of $4,726, according to market research firm J.D. Power.
The price-cutting is unusual because FCA's Ram brand and GM's Chevrolet and GMC brands launched new versions of their large pickups within the last year. Normally, automakers avoid major discounts on freshly redesigned vehicles.
But these are not normal times. FCA Chief Executive Officer Mike Manley said last year he wants to move the Ram pickup line into second place in U.S. sales, displacing Silverado and closing the gap with Ford's F-series, the segment leader for 42 years.
The new Ram has received enthusiastic reviews for its stylish interior and optional 12-inch (30.5 cm) display screen, and sales are up nearly 22% this year through May, selling 22,000 more vehicles than the Silverado.
"Clearly, FCA is trying to grab market share while GM is still ramping up," said Cox Automotive analyst Michelle Krebs.
FCA said in a statement on Thursday the automaker will "stick with what works for us."
GM is under pressure to deliver as much as $10 billion in free cash flow in the final three quarters of 2019 to hit its full-year target, amid stagnant U.S. demand and plummeting industry sales in China.
GM will report second-quarter U.S. sales on July 2. Automotive News estimated Silverado sales fell 11.8% through May, while sales of the higher-priced GMC Sierra were up 4%.
"We will defend our franchise and we will do it the right way," said Barry Engle, head of GM's North American operations. "We're not going to just roll over and allow our truck business to be taken away from us."
Engle said Silverado sales numbers in part reflect an effort to build more higher-margin Sierras aimed at buyers willing to spend extra dollars on a luxury truck.
Ford, which has the oldest pickup truck in the market, had flat F-series sales through the end of May.
"It's a bit unprecedented," said Ford's truck marketing manager, Todd Eckert, of the heavy discounting so early in the life cycle of his rivals' trucks.
Ford will defend its position, but not at any cost, he said: "It's about having a balanced approach."
Because incentives erode profit margins, the automakers continue to juggle discounts against diminished margins.
"This is a segment that has been profitable for all of us," said GM's Engle. "We’d like to keep it that way."
(Reporting by Nick Carey, Paul Lienert and Joseph White in Detroit; Editing by Matthew Lewis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.