A few weeks ago, we reported on contrasting data from General Motors and FCA US relative to the take-rate for the 3.0L EcoDiesel V-6 in the Ram 1500, an engine offered since early 2014.
The matter has not been sorted out, but additional information warrants a second look.
FCA announced last September it was ramping up production of the diesel engine at the VM Motori plant in Cento, Italy, to achieve a 20% mix, double the initial expectation for the U.S. market’s first modern diesel in a light-duty fullsize pickup.
By the end of last November, FCA said the plants in Warren, MI, and Saltillo, Mexico, would be shipping more trucks with the diesel engine as part of the capacity increase.
An FCA executive recently told WardsAuto that manufacturing bottlenecks in the Cento plant were addressed, freeing up the additional engines to meet what was described as overwhelming demand for the diesel truck.
Still, several months later, a nagging disconnect remains between installation at the plant level and delivery to paying customers.
Through June, FCA says the diesel makes up 18% of the Ram 1500s shipped from the plants but only 12% of the retail mix. “Retail sales (20% goal) will fall in line with shipments once we can reach target stock levels for the dealers,” writes Ram spokesman Dave Elshoff in an email to WardsAuto.
OK, so the 20% mix figure is a projection, a target, even though it should have been met by now. The discrepancy in the data suggests a lot more Ram diesels have been coming out of the plant than have been ending up in driveways, for several months now.
If that weren’t the case, the retail mix would be well above 12%. As of April, registration data for purchased vehicles was even lower, reflecting less than 9% of Ram 1500 buyers were picking the diesel.
Check the inventory of Ram dealers, and you’ll find lots of Ram 1500s available, especially with the 5.7L Hemi V-8 or the 3.6L Pentastar gasoline V-6, but just a smattering of diesel V-6s in stock.
At Brighton Chrysler in Southeast Michigan, five of 34 Ram 1500s in stock have the diesel V-6. Rebates and discounts for all the Rams are generous, topping $10,000. At some dealerships, the most popular engine, the Hemi V-8, comes with an extra $1,000 off compared with the diesel.
“Everyone wants the diesel, but not everyone wants to pay for the diesel,” Wes Hellmuth, sales manager at Brighton Chrysler, tells WardsAuto. Relative to the Pentastar gasoline V-6, the diesel can cost many customers an extra $140 per month.
Hellmuth says it’s difficult for dealers to get their hands on diesel Rams. “If I had my choice, I would have a mix that is 50% Pentastar and the rest split evenly between Hemi and the diesel V-6,” he says.
Dealers such as Brighton Chrysler with a customer base that leans heavily toward leasing (as high as 70%) generally will move fewer diesels because most customers will find purchasing them makes more sense financially.
The $4,770 cost premium is steep but can be whittled if a customer logs lots of miles and maximizes its segment-leading 29-mpg (8.1 L/100 km) highway fuel-economy rating.
“The fuel economy is the biggest draw” for the diesel, says Jeff Holtsclaw, a salesman at Zeigler Chrysler in Grandville in Southwestern Michigan. “When gas prices rise, that’s when a lot of people start looking at the diesel.”
With diesel fuel prices at near-parity with gasoline, the Ram 1500 diesel should be moving briskly off showroom lots.
If the gap still exists between sales and production at the end of this year, FCA will have some explaining to do.