Why Did Dodge Spin Off The Ram Truck Brand?

A brand is a unique identity that is meant to excite, connect with, and foster loyalty with consumers. In the highly competitive and crowded automotive industry, every manufacturer must define its vehicles and attempt to make them distinct from the competition. Dodge was synonymous with trucks for decades, producing iconic vehicles like the classic Dodge pickup that was America's first 4WD truck. And what Dodge fan could forget about the C-Series trucks?

In 1981, the world got a glimpse of the first Dodge Ram truck, and the terms "Dodge" and "Ram" became one in the same among pickup fans. Then in 2009, Dodge and Ram separated, with Chrysler CEO Sergio Marchionne stating, "This reorganization will allow us to protect and develop the unique nature of the product offerings within the Dodge brand."

Sometimes business jargon can be obtuse, and many have wondered what the real cause was of the division within Chrysler. The split was certainly affected by a seismic shift in upper management. Also, a fresh marketing campaign could likely help reinvent the financially strapped brand by grabbing headlines. However, there are also a few completely different theories floating around the automotive community that involve global branding plans and the CAFE (Corporate Average Fuel Economy) standards.

Prior to the division announcement, there was a big upheaval among the management ranks with the automaker's leadership shifting to a new team from Fiat (which now had a major stake in the company). Suddenly, Italian bigwigs from Fabbrica Italiana Automobili Torino (Fiat) were stepping in to take charge amidst a required restructuring following U.S. government relief funds. With a new CEO, it's not surprising that major changes were announced considering Chrysler's financial struggle, and they seem to have paid off with the company repaying $7.9 billion in both debt and interest back to the U.S. and Canada by 2011, per PBS.org.

With branding so vital to sales, the marketing team had to come up with something dramatic to change course. The new pitch was designed to distinguish RAM with all capital letters and showcase hard-working Americans in a variety of challenging jobs. A brand split would also garner more attention with consumers as it was widely covered by news outlets, which in the world of PR is referred to as "earned media." According to Forbes, "The biggest benefit of earned media is it is often considered 'free' advertising."

There is also speculation by some in the automotive community that the breakup of Dodge and Ram was due to other reasons. For example, some have theorized this was the start of a push to make Ram a global brand and Dodge wasn't invited. While the name "Dodge" is significant to Americans, it might not hold the same reverence with drivers in Europe and Oceania regions. This theory is supported by the news that "The Ram 1500 REV will launch in Australia 'very close' to the trim's United States debut in 2024, with the brand's global chief promising to prioritize Australian production to get the all-electric pickup truck into the market as swiftly as possible."

Another belief by some fans was the split happened because the trucks didn't meet the Corporate Average Fuel Economy (CAFE) standards. The speculation is that by separating the brands, instead of the entirety of Dodge facing a penalty for failing regulation standards, it would instead only apply to Ram Trucks, reducing the financial repercussions for Chrysler at the time. Today, Chrysler is owned by Stellantis N.V., which is one of just a few companies that own all the top car brands in the world.