Why Ram had to revive its legendary Hemi V-8 engine

CNBC

3 days ago

American pickup truck buyers are having some trouble adjusting to a new age of tightening emissions requirements and electrification.
Stellantis — the parent company of brands like Ram Trucks, Jeep and Dodge — has been hit especially hard.
The company briefly removed its popular gas-powered Hemi V-8 engine from much of its lineup, including from the Dodge Challenger and Charger, and the Ram 1500 half-ton pickup. Ram fans revolted.
In an effort to revive the brand, recently installed CEO Antonio Filosa rehired company veteran Tim Kuniskis to run Ram. Kuniskis is also overseeing all the North American brands, including the reformed in-house performance shop Street and Racing Technology, or SRT.
One of Kuniskis's first moves has been bringing the V-8 back to the 1500 pickup truck.
Ram Truck sales had dropped every quarter since the company switched the engine in the 1500 to an inline-six-cylinder called the Hurricane.
The Jeep and Ram brands are especially important to Stellantis. RBC Capital has estimated that about 50% of the automaker's profits come from those two brands.
Kuniskis said dropping the Hemi would lose Ram at least 30,000 truck sales every year.
"With loyalty running in 75% to 80% in the truck segment, you don't want to lose any of those customers," he said.
Ed Kim, President and chief analyst at AutoPacific, a company that surveys car owners, said he had driven a vehicle with the new Hurricane engine.
"It's a very nice engine," Kim said. "It's very refined. It's very smooth. On paper it's better in every way — well, better in many ways."
But the Hemi had a certain brand name and reputation among Ram owners the Hurricane could not replace, he said.
"Everybody, even if you don't know what Hemi is, you know, the term," Kuniskis said. "'Oh, it's got a Hemi.'"
The decision to go "greener" — or use smaller engines and invest in electric vehicles — kicked into high gear when the Euro-American Fiat-Chrysler merged with France's Groupe PSA in 2019. PSA CEO Carlos Tavares took the helm of the newly formed Stellantis.
Some of those changes alienated fans.
"The wrong people were trying to guide America, American enthusiasts, in a direction they did not want to go and still don't want to go," said Mike Gresham, director of recruiting for Central Texas Mopars, a car club dedicated to cars in what is commonly considered the Chrysler or Mopar family of brands — Jeep, Dodge, Chrysler, and Ram, along with defunct brands like Plymouth.
"Americans associate truck performance with V-8 engines and Ram in particular," Kim said. "The Ram customer in particular, really, really, really loves the idea of having that big American V-8 under the hood."
Kuniskis expects about 40% of Ram buyers sooner or later to settle on the Hemi engine.
That's a lot higher than the Ford-150 V-8 take rate of about 25%, but slightly lower than General Motors — which Kuniskis attributed to the fact that, apart from a diesel, GM offers a choice of two V-8s or a four-cylinder.
Ford F-150 buyers can swap in a V-8 for free on most versions of the truck. Ram buyers have to pay an extra $1,200 unless they get the high-end Limited or Longhorn trims.
Kuniskis said he thinks a lot of people will choose the Hemi anyway.
"Hemi is not really just a V-8. It's kind of a brand in and of itself. It's become a thing," he said.
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