2014 Ram 1500 Slt on 2040-cars

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Dongfeng and PSA extend Chinese joint venture

BEIJING/PARIS — China's Dongfeng and Peugeot maker PSA are extending their business cooperation, despite the Chinese company reducing its stake in PSA to help smooth the French carmaker's merger with Fiat Chrysler Automobiles (FCA). Dongfeng said on Thursday it had agreed with PSA to extend the duration of their joint venture Dongfeng Peugeot Citroen Automobiles (DPCA). Under the deal, the venture could get the rights to PSA's new brands in China and will benefit from new technologies and intellectual properties, the Chinese company said. PSA was not immediately available for comment. The announcement comes a day after the companies said Dongfeng would reduce its 12.2% stake in PSA by selling 30.7 million shares to the French company. Analysts said the move could smooth U.S. regulatory approval for PSA's roughly $50 billion (GBP38.97 billion) merger with Italian-American carmaker FCA. The sale of Dongfeng's shares in PSA, worth around 680 million euros ($757 million), will leave the Chinese group holding around 4.5% of the merged PSA-FCA, which is set to become the world's fourth-biggest carmaker by sales volumes. "As the cooperation between Dongfeng and PSA deepens, we expect the joint venture to continue making good progress in China," a Dongfeng representative said. On a conference call, Dongfeng said DPCA would have exclusive rights to PSA's Opel cars should the partners agree to bring the brand to China, and enjoy lower prices on car parts imported from PSA. Earlier this year, a document seen by Reuters showed Dongfeng and PSA plan to cut jobs at Wuhan-based DPCA and reduce its number of car plants to try to make the venture more profitable. Chrysler Dodge Fiat Jeep RAM Citroen Peugeot China FCA PSA Dongfeng

Fiat Chrysler dumped 40,000 unordered vehicles on dealers

In a move that echoes recent history, Fiat Chrysler has been making more cars and trucks than dealers in the U.S. are willing to accept, with Bloomberg reporting that at one point the automaker had built up a glut of around 40,000 unordered vehicles. That’s led some dealers to accuse FCA of reviving the dreaded “sales bank” accounting practice of obscuring inventory to improve the balance sheet. The company reportedly began building up its inventory of unordered cars this summer despite an industrywide slowdown in sales and an eagerness by some dealers to thin their inventories because rising interest rates are making it more expensive to hold unsold cars. The inventory build-up also coincided with Fiat ChryslerÂ’s efforts to find a merger partner, first with Renault, which fell through, then last monthÂ’s announcement that it will merge with FranceÂ’s PSA Group. FCA denies any such scheme and tells Bloomberg the rising inventory is down to a new predictive analytics system designed to better square supply with demand from dealers that is helping the company save money and narrow the numbers of unsold vehicles. The company recently agreed to pay a $40 million civil penalty to the U.S. Securities and Exchange Commission to settle a complaint that it paid dealers to report fake sales figures over a span of five years. While no one is suggesting that FCA is in dire financial straits — the company saw higher than expected earnings in the third quarter and record profits in North America — the practice has strong historical precedent by Chrysler, which built up bloated inventories in the run-up to its two federal bailouts, in 1980 and 2009. It was also common at GM and Ford during the 2000s, when all three Detroit automakers struggled with excess manufacturing capacity and plummeting sales in the lead-up to the Great Recession. Back in 2012, CFO Magazine wrote about a report that explained automakersÂ’ rationale for the practice and how it works: Say fixed costs for a given factory are $100, and that the factory can make 50 cars. Consumers, however, demand only 10. Under absorption costing, if the company makes all 50 cars, its cost-per-car is $2. If it makes only up to demand, or 10 cars, the cost-per-car is $10. Although each car adds variable costs for steel and other parts, if those costs are low, the company still has an incentive to make more cars to keep the cost-per-car down.

2019 Ram 1500 pickup production problems costing FCA $300M to fix

Fiat Chrysler is spending more than $300 million to fix production issues with the new 2019 Ram 1500 pickup as the plant where it's built is running below capacity and suppliers reportedly struggle to keep up with building it and the 2018 version simultaneously. The truck's ramp-up is well behind schedule, Automotive News reports. FCA's Sterling Heights Assembly plant in Michigan began building the pickup in mid-January but is running at only 60 percent capacity, CEO Sergio Marchionne said on an earnings call last week. Sources told the publication the plant is still undergoing construction and was building about 1,000 trucks per day toward a run rate of 1,400 per day. It's operating two 10-hour shifts per day, seven days a week, with plans to keep the factory running every weekend and holiday through Labor Day to meet production targets. More than 2,500 of the new pickups were reportedly awaiting unspecified electrical repairs before they could be shipped. FCA could use the boost from the heralded new 2019 Ram 1500, which figures prominently in its aggressive annual financial goals. The company is relying on the previous-generation 2018 Ram 1500, demand for which has been sagging. First-quarter sales of the pickup are down almost 13 percent year over year to 103,964, according to carsalesbase.com figures. Meanwhile, sales of Ford's F-Series pickups over the same period rose 4 percent to 214,191, while Chevrolet Silverado sales have climbed 5 percent to 135,545. Dealers have started receiving deliveries of the 2019 Ram 1500, but only the version fitted with the 5.7-liter V8. The EPA has yet to issue fuel economy ratings for the standard 3.6-liter Pentastar V6 paired with the eTorque 48-volt mild hybrid system, nor the same system mated with the V8. As we noted in our recent First Drive review, upgrading to the (non-hybrid) V8 costs $1,195, which is actually $255 cheaper than before. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Image Credit: FCA Plants/Manufacturing RAM Truck sales