Ram truck dealers around the country are facing a growing crisis – their lots are overflowing with unsold 2022 model year conversion trucks that they are struggling to sell, even at steep discounts of $25,000 or more below their original MSRPs. Despite heavy investments by dealers in customizing trucks to meet what they believed was strong demand in the conversion truck niche, customers seem unwilling to bite even with thousands slashed off asking prices.
This article will analyze the factors that led dealers to take on excess 2022 conversion truck inventories they now can’t clear, the market dynamics changing customer receptiveness, and options dealers have for dealing with a growing surplus of new unsold conversion truck models – all through the lens of a passionate gamer.
The Rise of Conversion Trucks
Before digging into why 2022 models are languishing on dealer lots, it’s helpful to understand the conversion truck concept that Ram pioneered and why these vehicle types had been increasing in popularity in recent years.
Conversion trucks are pickups that are customized after initial manufacture with assorted aftermarket parts and accessories to enhance their capabilities for off-roading, outdoor adventure, and hauling needs. Customizations can include new wheels/tires, leveling or lift kits, running boards, truck bed liners, racks, lighting, fender flares, suspension upgrades, and additional cosmetic enhancements.
The Original Equipment Manufacturer (OEM) truck serves as a platform on which an array of modifications are made to create a highly personalized final vehicle tailored to individual preferences around style and functionality. The conversion process can tack on thousands in additional cost but result in a pickup perfectly outfitted for niche leisure pursuits and jobsites.
In many ways these trucks parallel gaming PCs, where off-the-shelf models provide baseline performance that enthusiasts then modify with premium graphics cards, cooling systems, cases, lighting, controllers, and accessories that unlock elite capabilities. A custom gaming rig offers flexible customization, just like a tailored conversion truck unveils its maximum potential through meticulous upgrades.
Both follow a philosophy where investing substantial dollars into seemingly superfluous horsepower yields outsized rewards when pursuing specialized hobbies or vocations. What may appear excessive to general users translates into meaningful differentiation to discerning power users.
Ram’s efforts to capitalize on growing interest in these converted trucks led them in 2020 to launch the Ram 1500 TRX – a new specialty model designed from the ground up for high performance off-roading. Priced from $71K and offering 702 horsepower (100 more than the next closest rival), customized suspension, 35” tires, and other enhancements ideal for desert running, the TRX gained immediate notoriety and spotlighted the wider conversion truck sphere.
The Ram TRX built an enthusiastic tribe around its brawny capabilities, much like overclocked RTX gaming GPUs amass diehard fans obsessed with frame rates. Both models showed aspirational performance for their niches, igniting passionate demand.
Dealers Bet Big on 2022 Conversion Trucks
Inspired by the early success of the TRX, Ram dealers in 2021 began investing heavily in developing their own in-house conversion offerings by purchasing large quantities of 2022 model year 1500, 2500, and 3500 series trucks and sending them to customization shops before sale.
Dealers sunk big money into buying truck inventory they planned on upgrading in hopes what seemed an insatiable public hunger for adventure vehicles would continue. In the gaming world, this mirrored manufacturers flooding distribution channels with top-end cards and components based on initial reception, only to strand inventory when circumstances changed.
The trucks were outfitted with some combination of the following enthusiast-grade equipment:
- New off-road wheel and tire packages
- Premium leveling or lift kits
- Leather seat covers
- Speedometer calibration to account for larger tires
- Running boards or side steps
- Fender flares
- Upgraded bumpers or skid plates
- Winches or other accessories
Additionally, dealers promoted three-year/36,000 mile conversion warranties to back the quality of the numerous add-ons. By making these major investments in modifying new pickups, dealers both expanded available inventories in a constrained market and offered buyers a custom truck right off spawn rather than having to grind for their own modifications afterward.
Initially dealers struggled to keep up with demand, with tricked-out conversion trucks leaving lots quickly at hefty markups. But circumstances have since changed drastically, leaving dealers puzzling why inventories are accumulating despite panic discounting to attract reluctant buyers.
Customer Receptiveness Declines
In 2021, low inventories on factory stock trucks drove consumers into the conversion truck segment willing to pay almost any “pay to win” price to gain an immediate edge. Limited truck supplies due to supply chain issues feeding OEM production constraints made dealers’ investments in conversion inventory seem like a smart play.
But in 2022, as factory inventories recovered and fears of not being able to gear up subsided, customers became less willing to overpay for conversions with questionable value retention. Meanwhile, an economic slowdown has consumers tightening budgets across the board, unwilling to rage bet on unnecessary add-ons that could quickly depreciate.
Although adventure truck interest remains strong amongst outdoor enthusiasts, much of the general public has lost appetite for conversion premiums once supply normalized. The niche specs satisfying serious off-roaders differ greatly from what everyday drivers believe they need or can afford. This realization has drained hype for upgrades less usable in daily driving.
Surplus of Unsold Trucks
These market shifts have left dealers sitting on glut of 2022 conversion trucks that today’s buyers don’t value as highly as predicted last year. With easier access to factory stock at MSRP, conversion truck pricing above $90K-$100K has consumers balking no matter how shiny the graphical overlays have become.
Deep Dive Auto, which analyzes industry trends, recently spotlighted the distressing situation faced by a Texas Ram dealer with entire rows of unsold 2022 conversion trucks parked on their lot. Despite having already marked down prices by up to $25K per unit, the dealer shared they “can’t sell sub $100K conversion trucks” and have a “shocking amount of 2022s left over.”
Unfortunately their experience is far from unique, with dealers across multiple states trying to quick sell surpluses of leveled up new conversion trucks occupying premium yard real estate by dangling major savings to try generating any sales momentum.
But customers remain unmoved by discounts alone if inherent value is deemed lacking at still elevated sticker prices. Enthusiasts acknowledge overpriced hardware can’t achieve true ultra specs regardless of RGB lighting flare.
Auction platform Manheim reports that wholesale pricing on 2022 Ram 1500 Class 2 and 3 trucks have declined 15% versus 2021 models. This double-digit depreciation out the gate does not inspire confidence in retaining investment on the part of either dealers or retail purchasers.
It also limits the discounts dealers can offer before hitting negative ROI territory on inventory they customized at considerable expense. These unsold trucks are essentially bricking without deeper savings restored.
One dealer expressed dismay that even at tempting markdowns, selling these trucks has become near impossible: “I can’t believe we haven’t marked them down more to just move them out of here so we can get fresh stock for ‘23 models.” Their expectation was that lowering prices nearer invoice would incentivize buyers, but the public is pushing back that something seems off if still not at budget price points.
Experts say this reaction is unsurprising since savvy gamers recognize desperate discounting for what it signals:
"There is now an association with conversion trucks being overpriced relative to needs or true market value," commented market analyst Tim Bartz. "Steep incentives erode confidence in underlying quality and long term costs of ownership."
What’s Next for Dealers?
Dealers made big bets on bountiful 2022 conversion truck demand that failed to render as predicted. They now face hard choices managing swollen inventories of potentially depreciating assets that grow more obsolete as next-gen model year trucks arrive.
Some options for dealing with unsold 2022 stock include:
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Pushing inventory to rental fleets rather than taking losses trading in or selling at auction. Rental company demand depends on pricing and if used trucks undermine their own fleet values however.
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Offering truck subscription or short term lease programs where they retain ownership while working off inventory. This avoids resale but has its own risks.
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Shipping inventory across regions to dealers where residual demand may be stronger. But this overburdens those recipients with oversupply glut.
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Parting out tricked out components to try to recapture some upgrade investment dollars. But aftermarket demand is tied to specific donor truck configs.
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Holding trucks until 2023 hoping tax refund season, revised pricing, or incentives rekindles interest. But carrying costs hit bottom lines.
Further compounding 2022 woes, early analyst projections expect up to 8% lower conversion truck sales in 2023 as other segments rise. This anticipates reduced overall industry demand in the medium duty pickup niche.
Though still a fraction of mainstream truck volumes, the outsized impact on dealers dedicating showroom and yard space to elaborate conversion offerings is worrying. In a profoundly changed market, the conversion truck craze appears to be losing steam.
Dealers must rethink inventory strategies centered on these specialty trucks and whether profitability on costly customizations is sustainable long term. The inability to sell 2022 models even at steep markdowns does not bode well for the conversion trend absent fundamental changes industry wide.
Gamer Take: Conversion Trucks vs Gaming Rigs
As an avid gamer, there are notable parallels I see between the conversion truck frenzy and past waves of over-hyped gaming hardware that failed to deliver lasting value:
Superficial Tech Flexing – Like RGB lighting on GPUs, much of the conversion truck trend centered less on meaningful capability advancements and more on superficial styling to flex status. The trucks became rolling symbols without deeper purpose.
Fairweather Enthusiasts – When supply normalized, many buyers were poseurs unwilling to pay real premiums. Like gaming fans ditching titles at first difficulty, their commitment was superficial.
Fast Depreciation – Strong initial demand fed unhealthy markup speculation that crumbled when conditions changed. Conversion trucks lost substantial value immediately just like the latest graphics cards.
Over-Invested Dealers – Like boutique PC builders, small town dealers overextended betting on niche demand sustaining. But interest amongst non-hardcore buyers was fleeting once market stabilized.
For gaming PC counterparts, the impacts were enterprise-level. Graphics card leader Nvidia reported a 23% annual revenue decline and $1.22 billion inventory correction charge from overestimated gaming chip demand. The over-production hangover continues plaguing companies across the hardware industry.
Dealers face similar write-down risks if conversion truck interest fails to rebound. And with electric and self-driving vehicle disruption on the horizon, the custom niche could narrow even further.
The EV/AV Impact on Conversion Trucks
The conversion truck craze emerged from a perfect storm of factors unlikely to recombine anytime soon. As consumer appetite for pricey adventure rigs diminishes, two unfolding transportation megatrends cast further doubts on the custom truck ecosystem thriving long term:
Electric Transition – EV trucks will comprise 20% of sales by 2030 as ranges improve and offerings multiply. Complex cabins, batteries and motors leave less flexibility for modifications. And cybertruck styling obviates many aesthetic add-ons. Customization companies are scrambling to adapt approaches as lift kits shift from mechanical to digital.
Autonomy – Self-driving tech depends on integration of sensors, radars and cameras seamlessly factory installed.even minor modifications like a front light bar could degrade their functionality. This hinders some historical customization like suspension or chassis lifts. Driver assist systems also erode the engagement case for performance upgrades. Adoption is projected to reach 12M vehicles by 2030 per IHS Markit.
As consumer values and requirements shift with those trends, transferability of recent customization models becomes questionable. Dealers overexposed on conversion offerings could face intensifying headwinds.
Dealers Struggle to Adapt with Times
Allbright Motors* dealer Clint Kewan explained the confusion many small town dealerships face:
"We don‘t have the big data science of major chains to predict trends. We try reading forums and listening to customers to stock what sells. But the hobby market has always been volatile. We got caught reading the room a little wrong this round."
In the gaming world, boutique PC builders rode a similar roller coaster. Colorful personalities like Joanna Popper projected endless growth potential for esports streaming and gaming hardware. Dealers like Allbright envisioned a similar ever-expanding horizon for adventure truck demand.
But that trajectory relied on interest amongst young digital natives sustaining at pace. When fickle fans moved on to new diversions, stranded inventory was the legacy.
Gaming & Motorsports Collision Course
Still opportunity exists for dealers if they embrace gamer mindsets. One crossover area to watch is officially licensed motorsports collaborations on gaming hardware.
Logitech already offers a simulation-grade steering wheel co-designed with Porsche. This precision controller features components used in actual Le Mans and Formula E cars.
Look for more creative partnerships like leading gaming chair brand DXRacer producing licensed seats matching custom truck interiors. Or limited edition GPUs featuring cybertruck design language.
Exploring these synergies between gaming and automotive could open new commercial avenues as old ones close off. Dealers should view engagement with gaming culture as a bridge to future enthusiasts less fixated on horsepower alone.
Summary: Why 2022 Sales Disappointed
In review, mainstream dealer and consumer passion for conversion trucks has clearly cooled considerably from the frenzied peak:
- Factory inventory shortages initially fed demand and price tolerance
- High investment in speculative 2022 truck customization
- Supply stabilization let air out of conversion value proposition
- Fragile economy made buyers reevaluate true needs
- Wholesale pricing declines spooked retail markets
- Excessive dealer discounts signaled weak demand
- Purchase hesitation further reinforced value doubts
Dealers face hard lessons about overestimating niche model demand. Meanwhile, the outsized dealer inventories of unsold 2022 conversion trucks sitting idle on lots continue swelling.
Until volume stabilizes at lower levels or renewed interest resurges, these specialized trucks seem likely to become an albatross on dealer resources needing clearer avenues to connecting with evolving enthusiast mentalities.
Glossary
Conversion – Aftermarket customization or modification to enhance factory vehicle capabilities
Lift Kit – Suspension modification raising truck height for improved off-road clearance
OEM – Original equipment manufacturer that produces base truck models
Enthusiast grade – Premium components meeting needs of discerning hobbyists over casual users