When Fiat Chrysler Automobiles revealed this week that they were contemplating building a full-sized SUV on the platform of the next RAM pickup truck to compete with the Chevrolet Tahoe/Suburban and Ford Expedition, I noticed a lot of “finally, what took them so long?” reactions, but also online replies that went along the lines of “they keep promising new vehicles and then delaying them”. Those commenters are probably right on both counts, but that’s not what this article is about.
My opinion on this vehicle is two-sided: on one hand I believe it fills a huge (no pun intended) hole in FCA’s North American line-up, one that has high profit margins for a limited budget, but on the other hand I don’t think this is the way of the future and they might have better ways to spend their limited R&D resources. And thirdly I’m not sure launching it under the RAM truck brand would be the best option.
Let’s start with the pros
A full-sized SUV based on the body-on-frame platform of their full-sized pick-up truck is not that expensive to develop than an all-new model on an all-new platform and it would spread the development costs of the pick-up truck platform over a greater number of potential sales. Besides that, these kinds of SUV’s typically sell for more than $ 50,000 and have profit margins north of $ 10,000 per vehicle. [Read more…]