The Ram Truck Is on Pace to Shake Up the Industry Rankings

The Ram truck has kicked 2014 off with a fast sales pace. Can it keep the momentum needed to surpass General Motors' Silverado?

Mar 8, 2014 at 10:30AM

Source: Fiat Chrysler Automobiles.

The race to the title of best-selling vehicle in America is a heated one, although one that Ford's (NYSE:F) F-Series has largely dominated over the years. The F-Series' main competitor to the crown has been General Motors' (NYSE:GM) Chevrolet Silverado, and the two duke it out for the most loyal consumers in the industry. Funny thing is, all the sudden the race has a third player coming from behind which is on pace to shake things up. Here are the details, and whether I think Fiat Chrysler Automobiles' (NASDAQOTH:FIATY) Ram Truck will indeed keep pace and overtake the Silverado in 2014.

Ram accelerates in 2014
Let's first look at what the Ram truck has accomplished during the first part of 2014. Last month, Ram brand sales for Fiat Chrysler Automobiles, or FCA, the combined company of Chrysler and Fiat, soared 28% over last year and remains up 26% for the year. Ram's sales last month were good enough to record its best February mark since 2006 and its 46th consecutive month of year-over-year sales gains.

While sales increases of 28% and 26% for February and 2014, respectively, from Ram are impressive, let's look at how they stack up versus the competition and what we can expect to happen throughout 2014.

Ford's F-Series sales improved a meager 2.6% in February and are up only 1.1% for the year which seems disappointing until you check General Motors' results. Sales of GM's Chevy Silverado were down 12% in February and are down a whopping 15% so far this year – ouch. If those results continue, the Ram is on pace to shake up the sales rankings.

Graph by author. Source: Automotive News DataCenter. 2014* Projected by sales increases through February 2014.

However, winning and losing in the full-size truck segment goes beyond sales, investors and car buyers must take incentives into account.

All about the incentives
Ford reported this week that its incentives per truck remained at historic norms, roughly $4,000 per truck, while General Motors has so far kept its incentives below normal. That's a strategic move for General Motors, as it has the freshest designed trucks on the market and which typically leads to higher transaction prices as well as fewer incentives to achieve sales -- a more profitable move.

So while sales of the Silverado are down, profitability is up, albeit at the cost of market share. The big question is whether the Silverado is good enough to lure customers from the F-Series and Ram without increasing incentives, and not everyone is convinced. When speaking of GM's new trucks to Reuters, Kelley Blue Book analyst Alec Gutierrez had this to say.

"They are only marginally better than Ford's previous generation truck and the new Ram," according to Reuters, he added that there was no reason to suggest a consumer should pay a premium for the Silverado.

With that said, and taking current trends into account, will the Ram keep this sales pace up and overtake the Silverado in 2014? I don't think so.

Looking ahead
The first two months of 2014 perhaps served notice to GM that its trucks aren't competing as well as hoped. Because of that, General Motors is now unleashing its steepest and most aggressive incentives on the new Silverado to date. During March, dealerships will offer truck buyers employee and supplier pricing for anyone willing to drive the truck off the lot. That means you can expect a strong surge in Silverado sales this month, and that alone could abruptly reverse Ram's growth in 2014.

Further, while Ram certainly surged early in 2014, it may have surged at the wrong time, considering January and February are historically very poor selling months. March is historically a very strong selling month, and it also boasts five weekends on the calendar this year. GM and Ford have the ability to regain lost market share more quickly during the stronger selling months later this year.

Further, the competition is about to heat up even more as Ford's next-generation 2015 F-150 hits the markets. Ford's truck buyers have historically been the industry's most loyal, and with the F-150's improved fuel economy it is sure to garner a large amount of sales later this year. I believe those factors will prevent the Ram from overtaking the Silverado this year, although let the warning be served: This is no longer a two-truck race.

The car buying secrets you must know
You don't know it yet, but you probably spent thousands more than you should have on your vehicle. In fact, the auto industry can be such a dangerous place for consumers that our top auto experts are determined to even the playing field. That's why they created a brand-new free report on The Car Buying Secrets You Must Know. The advice inside could save you thousands of dollars on your next car, so be sure to read this report while it lasts. Your conscience, and your wallet, will thank you. Click here now for instant access.

Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers