The annulment of the joint-venture agreement, which came with an undisclosed financial compensation, gives Ateco full control of the American Special Vehicles (ASV) business yet does not alter the relationship of importer and constructor.
The changes made last month precede the addition of an entry-level Ram truck to the range, projected increases in Ram truck sales in Australia and the need for more dealers to cover off what is expected to be a wider demand for the brand.
WAG will continue to do the conversions of the super-sized utes, which are fully imported from the United States. Both parties say that under the new arrangement, Ram Trucks Australia is strengthening its relationship with WAG to ensure it continues converting and adapting Rams to right-hand drive.
WAG’s program manager for Ram Truck, John Di Berardino, told GoAutoNews Premium that “not much changes”.
“Ateco has always led the way on sales and marketing of Ram while WAG continues with its focus on the engineering design and remanufacture of the Ram to right-hand drive,” he said.
“WAG now has an agreement with Ateco to perform this work rather than the two companies being in a joint venture.”
Ateco said in a statement to GoAutoNews Premium that it made sense in the beginning of the program to have a joint-venture company “to share development costs before sales started”.
“Following the successful launch of the Ram 2500 and 3500 and with the significant change in the scale and nature of the business that comes with the arrival and launch of the 1500, it was a sensible point to make the relationship change from joint venture to customer-client,” Ateco said.
“This now more clearly defines and reflects the requirements of the business as it now stands, as well as fitting the structures of the two companies involved and their business plans.”
The move opens the way for Ateco to introduce a smaller Ram model, the 1500, that introduces a lower entry-level price point, at $79,950 driveaway. That gives Ateco – and its dealer network in New Zealand and 34 locations in Australia – three models, with each including numerous variants and option lists.
Ram Trucks Australia general manager Alex Stewart said Ram sales are expected to start at 2100 units for the first full calendar year, lifting to 4500 in the third year, with the aim to have 10 per cent of the premium (over $57,000) 4×4 pick-up market.
“The Ram 1500 resets the ability, value and style measures for the Australian market,” he said.
“We fully expect it to have as dramatic an effect on Ram sales in Australia as it has done in the US where the brand has enjoyed eight years of consecutive growth, to make it a significant player in the top end of the Australian ute market.”
It also means that Ateco expects to have 40 dealers by the end of the year, adding the extra six in areas that the company’s managing director, Roger Zagorski, said would suit the Ram 1500 buyer.
“We have some open points – corridors – that we are looking at because the (smaller) 1500 is a different truck to the 2500 and 3500 Ram models,” he told GoAutoNews Premium.
“It has a much more urban feel, so there are areas around Sydney that we see would add to the network. By the end of this year we expect to have 40 dealers in Australia.”
What is remarkable about Ateco’s acceleration with Ram Trucks is that despite the diverse global tentacles of Fiat Chrysler Automobiles, Ram is one of the two brands cited by FCA boss Sergio Marchionne as being future powerhouses that are not marked in Australia by his company.
Ram, Jeep, Maserati and Alfa Romeo are the focus of Marchionne’s five-year plan for aggressive growth. In Australia, Ateco imports and distributes Maserati and Ram.
Mr Di Berardino said his company has completed the Australian Design Rules compliance on the incoming 1500 model that goes on sale from July 1.
“We have made the 1500 compliant under full-volume import approval and with production of the 1500 and 2500, we are expecting to move from a single shift to a two-shift operation, increasing employee numbers,” he said.
“For Ram, we will soon be at about 60 dedicated manufacturing staff over the two shifts.”
Mr Zagorski said “We are confident that we can sell what WAG can provide.”
“If anything, we are putting pressure on them to meet production. We are confident we have the right pricing to create that demand.”
Mr Zagorski said pricing of the Ram product in Australia was critical because of the amount of engineering in each truck.
“That segment in the 1500 size has a lot of stretching to do so we see growth there,” he said.
“We have heavily invested in Ram and the factory relationship is strong. We would not look outside of Ram.”
Unusually for the motor industry, WAG is also carrying out engineering to make right-hand-drive versions of the Chevrolet Silverado for Australia which will compete with Ram’s heavy-duty 2500 and 3500.
However, rather than having an issue with the same company producing a rival for the Ram, Mr Zagorski indicated it was good for business.
“It is very difficult for one brand, such as ours, to create a segment,” he said.
“So if there’s a second entrant then it helps the segment. The more large trucks you see on the road the easier it is for people to recognise them and then the trucks become mainstream. It becomes a positive.
“I have been surprised by (the number of) large utes already being privately converted in Australia for duties such as industry and caravan towing.
“We seem to have closed some of these other guys out in terms of quality and pricing.
“We effectively own that Ram segment now, but there are still people very interested in the segment so if WAG do Silverado, it makes our job easier.”
By Neil Dowling