Partnership Between Hyundai and Chrysler to Sell Dodge Ram?

“Hyundai Motor Co. denies that there are any current plans to bring a pickup truck of any type into the U.S. now or in the foreseeable future. Hyundai is not in discussion with Chrysler in regard to a selling a rebadged Chrysler Corp. pickup truck, or any other vehicle, in the U.S.”

Hyundai Motor Company is alleged to have batted around plans to break into the United States pickup truck market and they've explored a partnership with the Chrysler Group, three sources with inside knowledge of the process reported. It appears that any action to this effect will not be seen any time soon, however.

In one possibility, Chrysler received a proposal earlier this year from Hyundai that would have the domestic carmaker build a Hyundai truck based on the platform of Chrysler’s Dodge Ram truck, two sources said.

Such a partnership would replace the now-defunct alliance between Nissan and Chrysler and may allow Chrysler to lower costs and expand production of the Ram, the third-best-selling pickup truck in the United States.

Sergio Marchionne, Chrysler’s CEO, refused Hyundai’s first approach in February, sources say, citing his company’s need to focus on its comeback plans under Fiat S.p.A.

“We never say never; however, at this stage, pickup trucks are not high on our priority list,” Hyundai Motor American spokesman Dan Bedore said in reference to Hyundai's long-term position of pursuing a pickup line.

Quiet Discussions

The alleged discussions between Chrysler and Hyundai this year highlight both the ambitions for growth on the part of the South Korean carmaker and the lingering doubts about whether Chrysler will experience an additional transformation one year after a restructuring prompted by a federal-government-funded bankruptcy proceeding, say analysts.

For Hyundai, stepping into the United States truck market would require a significant bet on a bitterly competitive but high-margin segment in which both Toyota and Nissan have failed to unseat the dominant Big Three automakers.

About the time that Hyundai pitched the idea to Chrysler, the automaker also displayed a picture of a Ram-based truck with Hyundai badges to a focus group to gauge the reactions of prospective customers, one of the sources said.

Executives from Hyundai have reportedly held meetings with representatives from its 800 United States dealerships in the last few months during which the topic of a larger product offering — including a possible Hyundai truck — was explored, a person who participated in the meetings said.

Dealerships supported the idea of a competitively priced truck enthusiastically, the person said. How consumers reacted to the idea was unclear.

Hyundai and Chrysler Would Stand to Benefit

Experts believe that it is highly improbable that the struggling Chrysler will survive in its present form, which makes the potential deal with Hyundai a win-win situation. Chrysler can leverage its success with the Dodge Ram, while Hyundai can take advantage of Chrysler’s idle capacity instead of pouring millions of dollars of its own money to start the venture.

Hyundai could also avoid the mistakes made by Nissan and Toyota in entering the truck market by attaching itself to a well-known truck brand, the Ram, rather than trying to compete with existing segment leaders Ford and GM.

“They won't get into the truck business the way that Nissan or Toyota did," IHS Global Insight analyst George Magliano said of Nissan. "How many times has Toyota gone through the truck effort and they are still not there.”