Congratulations on the three-peat win as MotorTrend Truck of the Year for the Ram 1500 TRX. What is your secret for success? First of all, thank you very much. Once again as a brand we find ourselves humbled and honored for the recognition and the secret is great people inventing great product. And I think that since Ram became a standalone brand back in 2009, we’ve had the competitive advantage really of focusing clarity in our mission and that is as the only dedicated truck and commercial van brand we are fully and entirely committed to understanding and delivering on the unique needs of our customers as a truck brand.
How do you follow this up? What is next? Well that’s a great question and one certainly we’re not going to rest on our laurels. I think an award of this magnitude is really validation in the attention to detail that we’ve put into our light and heavy-duty trucks. As you know since 2009, we’ve actually claimed MotorTrend Truck of the Year six times which is something we’re extraordinarily proud of and this most recent award I think will just help propel us to do even greater things in the future.
Are you finding the Ram name comes tripping off the tongue for buyers in a way that for many years Ram fought so hard to do? Yes. In fact, I think again it goes back to having the competitive advantage of being the only dedicated truck brand in the industry and we talked to truck customers every day across the country to understand their wants and needs. And I will tell you from its very infancy, the all new Ram 1500 was designed and engineered to be the no-compromise benchmark in terms of strength, durability, innovation and technology. Take for example the segment disrupting 12-inch touchscreen that we have in the pickup truck. It’s been truly a game changer not only for Ram 1500 and now when I ran Heavy Duty models as you know but really for the brand overall. And we are seeing people come to our brand that have never considered us before. And I think once they step inside the cabin of our truck the first thing they notice is how comfortable and how quiet. How spacious it is. The attention to detail. We have backseats that do front seat things, that are heated. They’re cool. They recline. And at Ram we are truly beginning to change the way people think about what a pickup truck can be.
Are you surprised in an industry where nobody really lets anyone get a big leg up, that Ram has continued to up the bar and the competition still keeps falling short? Well it’s hyper competitive for sure. And I think that Ram is beginning to receive credit in the marketplace for being a leader and an innovator. For example, we were the first to introduce a modern diesel in the half-ton pickup truck segment back in 2013. We were also the first to introduce mild hybridization powertrains as standard equipment on the all new Ram 1500. And then of course we just touched on the 12-inch touchscreen which was a segment first. I think Ram has demonstrated its commitment to be a leader in the segment both in the light duty as well as in the heavy-duty segment.
We are still waiting for a smaller midsize pickup. Where are we in the plan for that? I don’t have anything new to report here today but what I can tell you and I think we’ve been pretty transparent that for sure it’s the biggest opportunity for our brand and not even just in the U.S. but globally as well. It’s a tremendous white space opportunity for us. We’re actively looking into things for sure. And at the appropriate time we’ll have more to share but there’s nothing new to tell you at this point in time other than we absolutely recognize what an important opportunity it is for our brand in terms of future growth.
You have said by 2022, but is there a chance we’ll see it before that? I don’t have anything new to share with you today. It’s an ongoing conversation internally for sure. I wouldn’t expect anything certainly this year. I know we said by 2022. That obviously remains to be seen but again at the appropriate time we’ll certainly be happy to share more with you.
Have you settled on a platform for it? No. Not necessarily. I think we’re certainly looking at every platform that we have available to us today but we’re considering others as well. I wouldn’t say definitively that that’s been defined.
Have you at least whittled it down to body on frame versus unibody lifestyle truck which has been the debate you’ve had for many years? I think the question is still open. I think we’re monitoring not only the competitive landscape today but most importantly we’re futuring what the segment might look like in the years to come to help drive us to an ultimate decision. But we haven’t said for sure, not decided internally for sure if and when if the time comes which way we’ll go.
You’re going to have to nail that down pretty soon. Yeah. For sure we understand that time is ticking on that timeframe that I think we laid out in our five-year plan. And again it’s something that we’re actively looking at and I’m personally involved in as well. Again, at the appropriate time I think there’s still a lot to be learned and a lot to decide but we’ll certainly be happy to share that as we get closer and at the more appropriate time.
Should we expect the Dakota name to come back or will there be a new name? Obviously we understand the heritage of the name and it runs deeply in our company and even though Ram is still a relatively young brand again as we became a standalone brand in 2009, the name Dakota runs deep in our heritage. And so certainly we honor that and we know that it’s a special name for our customers and fans alike but yet no decision has been made on what it will be called if and when that time comes.
Was there ever talk about ProMasters staying with the Dodge brand and not Ram? Why keep it Ram? The decision really goes back to Ram becoming a standalone brand in 2009 and we’ve obviously had partners in the past under different naming conventions. But I think when we talk about Ram and our performance in the marketplace, I think we all could agree Ram has a lot of momentum overall. We have the highest conquest (the defection ratio in both light and heavy-duty segments). Simply put more people are switching to Ram than ever before. We have the highest owner loyalty in both the light duty as well as the heavy-duty segments. I think our dealers are doing a wonderful job not only taking care of, and retaining our own customers, but we’re bringing more people into the brand. But what we don’t talk often enough about is Ram’s commercial division. And we have some special products whether it’s the Ram ProMaster large van, ProMaster City small van and of course the Chassis Cab lineup as well. And we have some class exclusive features that are really important to us, but our commercial brand is really in its infancy stages. We talk about Ram being a young brand but our commercial division within the Ram brand itself is also extraordinarily young. And I will tell you we believe in the value of hard work and I think that goes hand in hand with brand commercial. We sweat the details. We push beyond expectations. And from my view when others shy away, we’re the ones that are willing to go in and take on the next big challenge. And that’s really who we are as a brand. I think that’s who we are. That’s who our customers are. And I think there’s a strong connection between the commercial segment and the Ram brand. I think it was a good decision to keep ProMaster in Ram and we’re carving our own way in the marketplace. And Dodge just kind of moved into more of a performance space with the muscle cars and so on. We’re going to continue to grow our brand and our commercial brand within that.
There is serious profit to be made in commercial vehicles. They’re not sexy but every auto maker will tell you that that’s a gold mine. Yeah. For sure. People need their trucks or their commercial vans for their livelihood and we don’t take that for granted. We do this because our owners depend on us. And we know that for them it’s much more than a truck or a commercial van; it’s their livelihood and it’s their reputation. Which is why at Ram we believe in commitment and we know when you make a commitment you stand by it and you honor it.
Are there gaps in the Ram lineup (beyond the mid-size pickup) that you still would like to see filled? As a brand I think we’re always looking for new areas of the market to grow. Of course first and foremost we want to protect our core audience but we continue to expand for example the light duty lineup with the introduction of the all-new 2021 Ram TRX, which is the quickest, fastest, and most powerful production truck in the world. And I think the expansion of the light duty lineup with the TRX as our halo product we’ll continue to bring in new buyers and shoppers into our brand overall. I think, yes, we’re going to continue to protect our core. We continue to look for opportunities for growth across the lineup. I think the mid-sized pickup truck for sure is the biggest opportunity for our brand and that’s how we’re going forward.
What’s your electrification strategy? Are you leaning more to plug-in and mild hybrids than full battery electric vehicles? I wouldn’t say that’s true. I think that specifically for the brand and obviously for other brands within FCA, specifically Jeep, we’re coming to market obviously with PHEV and so forth and obviously we have the Chrysler Pacifica PHEV. In terms of brand, Ram is absolutely committed to an electrification strategy. Our only difference between us and the competition was adaptation timing. It’s because when you think about what the pickup truck buyer traditionally uses their trucks for. They use it to tow, they use it to haul, and to do the things they needed to do. Obviously, there’s some serious concerns out there I think with regard to range anxiety and overall performance with pickup trucks under a load. We are absolutely committed. Ram was the first to introduce the modern diesel in the half-ton pickup segment. The first to introduce standard mild hybridization with the all-new Ram 1500; standard on the 3.6 (liter) and optional on the 5.7 liter Hemi V-8. And we’re absolutely committed to an electrification strategy going forward. The only difference being was the adaptation timing and when the market was ready for a heavy electrified vehicle. But as you know the market is… Everything is moving very, very quickly. And I would say Ram is moving very quickly as well. Once again when we have more to share with you on that front, we’ll certainly be happy to do so.
Just to clarify, it doesn’t mean that we’ll never see a pure electric Ram pickup it’s just that the timing of it could be further out than some of your competition. I would say yes, that’s correct. I would say that it’s absolutely possible. And again, it’s just the timing is what we are looking at very carefully right now is because everything from a competitive landscape perspective is moving very quickly. But yes. We are fully committed to an electrification strategy. It could encompass multiple solutions, as well.
Does the GMC Hummer put pressure on you or does it not keep you from staying your own course? I think a lot of the claims are impressive. I think the interesting thing is that none of this has been proven in real world application yet. I think that’s interesting. I think it’s wise for any brand to consistently monitor the competitive environment, but I think that we’re going to stay on our course and I’m confident in the plan that we have to meet and delight the expectations of our customers now and in the future.
Does the role of Ram change at all under Stellantis? I think that under Stellantis, the vast majority of the volume that Ram does today is in North America: 97, 98 percent of our global buyer. We’re growing but we’re very small outside of North America. And I think that the needs and the wants of the truck and commercial van customer here in the U.S. are unique in many ways. And so I think that our role, our brand decision will largely stay the same under Stellantis. Of course, time will tell but standing here today I think that our focus remains intact and that’s to continue to meet and delight our customers. I don’t think anything in our plan is going to change in the near term.
The 2-3 percent that is global, is that mostly commercial vans and eventually a smaller pickup? That’s our current stable of products today. That would be light duty, heavy duty and then the commercial vans as well so that’s total Ram brand volume that exists in our portfolio today.
There are full size and heavy duties out there? Full size trucks there are. Yes.
But Heavy Duties is probably a bridge too far? Heavy Duty and Chassis cabs are pretty much stable here in North America but certainly in other parts of the world: South America, the Middle East, Australia, New Zealand. And our footprint is growing. We actually have a very robust plan how to grow our international footprint and reception. Frankly, we saw a lot of this following the TRX reveal back in August. It really raised the profile of Ram on a global basis. We received notes from around the world inquiring about TRX. I think the profile of Ram is going to do nothing but grow. But I can tell you certainly in South America, Middle East, the demand for our products actually exceeds our ability to supply the capacity. And that’s so true that the demand here in North America specifically in the U.S. is so strong that it’s been a challenge to meet the demand in other markets.
The Middle East does like their big trucks. The trucks for sure. And they love the performance. The marketplace in general loves the performance of the TRX at 702 horsepower, 650 pound-feet of torque, engineered bolt by bolt to significantly outperform every other truck. It is absolutely the benchmark for extreme off-road performance and this truck can zip across sand dunes at 100 miles an hour. There’s a lot of interest in what this truck is capable of doing but also we perform very well on the upper end of the price paid distribution. Our Limited trim model, in particular, does very well in the Middle East.
Is being a largely regional brand an advantage or disadvantage? In the immediate term this is obviously the most important market for us right here in the U.S. of course, and this is where we sell the vast majority of our volume and where the vast majority of our profit comes from. We need to make sure that we protect and grow in the U.S. market for sure. However, I’m very optimistic and excited about our global growth as well. But first and foremost, the priority is to protect it to grow here and then obviously look for opportunities elsewhere around the world.
Does adding the Jeep Gladiator pickup help or hurt Ram pickup sales? I think there’s two totally different buyers. We watched that very closely when we first brought Gladiator to the marketplace but research has showed that the cross shop is very low. I think it’s two totally different buyers. I think they’ve complimented each other well overall on the showroom floor.
Gladiator essentially comes in one configuration, whereas when you have a Ram of similar size is it going to have the traditional choices of beds and cabs and configurations that Ram is known for? Certainly. And I think that is the Gladiator positioning. The Jeep brand is a spirit. It’s a feeling. It’s a way of life. I think the Gladiator embodies a lot of that passion, that lifestyle mentality. And Ram has some of that for sure as well as we modernize our brand with products like Limited and introducing the 12-inch touchscreen and so forth. But I think that fundamentally the buyers are different and when you need the capability, the power and the performance of a full-size pickup truck that’s obviously where we distinguish ourselves. Not only with what kind of showroom but against the competition as well.
Well it has been a bit been a strange year and obviously my predecessor Reid Bigland decided to retire earlier in 2020. And we obviously all miss Reid tremendously and hope he’s doing well in retirement, but things have been moving quickly. I’ve actually been with the brand now going on five years and been with the company since 2002. But most specifically with the brand for five and in this role since July of 2020. One last thing I would say just on life in general. The segments in which we participate have held up remarkably well indexed to other mainstream segments throughout 2020 and, pun intended, I think our segments to a good degree have an immunity to difficult times. It could be to natural disasters or other influences on the market because people still need their trucks and their commercial vans to tow, to haul and to do the things they needed to do for their livelihoods so our segments have held up remarkably well.
This is the one segment that’s just been on fire. We’ve been obviously pleasantly surprised. Coming out of the COVID downtime when the assembly plants were down earlier this year, we’ve been pleasantly surprised with the resiliency of our customers and the segment overall, but it’s been across light duty and across the heavy-duty segment as well. Heavy-duty segment, really over the last 30 days, based on our estimates is running at all-time high levels in terms of its percentage of the total retail industry, just underscoring the strength of the segment overall. So, we’ve been very pleased and pleasantly surprised with the bounce back in demand overall.
So you’re in the right job at the right time. Well, it only gets more difficult from here. The segments, the truck segments in particular, are hyper-competitive. And so I think it’s really important for our brand to stay out in front and to continue to lean on the notion of innovation. Again, our approach is really to redefine what a truck can be by pushing those limits of capability, of comfort. Then obviously, using our position as America’s most loyal pickup truck owners to continue to get our message across in the marketplace. Once you enjoy a test drive of a Ram truck, hopefully we can keep you in the portfolio for a long time.
You’ve continued to blow us away with the truck. We are very proud, of course. Then, geez, I sound like a broken record, but certainly humbled and honored for the recognition and a lot of hardworking men and women at Ram. I really appreciate the attention to detail, the no-compromise attitude that we had when we brought the new Ram 1500 into the marketplace. Now that’s, of course, made its way into the heavy-duty pickup trucks, and then obviously manifested itself here most recently with the launch of the Ram 1500 TRX. We look to keep that momentum going.
It has you tapping into your scrappy side again. When Ram was a smaller player, it was easier to experiment and take risks. When you become mainstream, it becomes much more difficult. But there’s always been a cowboy spirit to Ram that TRX shows us. I would agree, and we absolutely view ourselves that way. We’re a scrappy truck maker. We are, in our view, the underdog. Maybe not literally, but figuratively. It’s that philosophy. It’s that way of thinking. It’s being humble in our approach. It’s being true to who we are. It’s being an authentic brand and resonating with our customers across this country each and every day. But yeah, we’re agile. We can do that. Again, as a brand that’s solely focused on trucks and commercial vans, it affords us that flexibility and that latitude, and we had tremendous support. When you think about everything from an engineering perspective that went into the TRX, for example, there wasn’t a penny spared of investment. We knew that if we were going to bring the apex predator of the truck world in the marketplace, that it had to live up to that billing, and I think it certainly has. But it’s been a lot of fun. We’ve got a lot of momentum overall in the marketplace right now, and very pleased with the trajectory of the brand.