U.S. Midsize Pickup Truck Market In World Of Change

April 24, 2010/Autosdirect USA

MOTOR MATTERS FREEWHEELING BY BILL VISNIC

Everybody knows the auto industry got battered when the U.S. economy tanked in late 2008. Some of the auto market’s more discretionary-purchase options, such as luxury and sporty cars, were hit hard, as you might expect.
The group that’s probably tanked the worst is the midsize pickup truck category. Even before the economic collapse, the midsize pickup segment had been slipping for more than a decade.
These once-popular alternatives to the full-size pickups (that used to be the province of contractors and businesses) were favored as “personal use vehicles” by homeowners and sportsmen, which also used to be called “compact” pickups. But then their makers decided more power, more comfort, more size and more cost was the formula to increase sales.
That wasn’t where buyers of compact pickups wanted to go, though, and now the industry’s recent sales malaise has brought the midsize pickup market to the brink.
Combined sales of the segment’s seven major players — Dodge Dakota, Ford Ranger, Chevrolet Colorado/GMC Canyon, Honda Ridgeline, Nissan Frontier and Toyota Tacoma — were 763,553 in the year 2000. In 2009, those same seven models reached a total of 265,513 customers; meaning two-thirds of the segment’s sales have evaporated in a decade.
Toyota’s Tacoma is today’s best-selling midsize pickup and last year it was the only model to deliver six-figure sales, hitting 111,824. The next-best performance came from Ford’s Ranger, yet it managed barely half the Tacoma’s sales.
Factor out the Tacoma and Ranger and the midsize-truck market barely exists. Two models barely broke the 10,000-sales mark and General Motors Co.’s Chevrolet Colorado was the segment’s third-best seller, finding 32,413 buyers in 2009. How bad is that number? As recently as 2005, the Colorado sold four times its 2009 total.
Thanks to the crazy game of inventory and incentives, midsize pickups recently have been strangled by their own makers’ hands: automakers with full-size pickups in their lineups have long been offering cash and financing incentives twice as sweet as those offered for midsize pickups.
Take last December as one example. According to Edmunds.com’s proprietary True Cost of Incentives metric, the average incentive for full-size pickups was $4,125. The midsize-pickup TCI in December was just $1,601.
Many also argue that as the size of midsize pickups ballooned, so did power, features and prices.

Well-equipped midsizers easily slide into the price bandwidth of full-size pickups, often tempting buyers to opt for the larger and typically more capable truck. Throw in those healthy incentives and a decently equipped full-size pickup can end up costing less than a midsizer.
So what’s next? Can midsize pickups survive? Probably. But they’re likely to be markedly different. Some industry analysts predict a return to smaller, lighter-duty models — perhaps derived from car-based unibody structures — will restore what once was the main reason for buying a compact pickup: low price.
The other possibility: third-world sourcing.
India’s Mahindra & Mahindra is ready to launch a U.S.-market version of its inexpensive 2- and 4-door pickups based on the Scorpio hauler already sold in other world markets. The trucks have diesel engines the company promises will deliver 30 miles per gallon on the highway.
Ford and GM also have made noise about prospective replacements for their respective midsize pickups being adapted from low-cost Latin America-developed models. If the companies take this route, production almost surely will not be in the U.S.
In any event, if you’re a fan of today’s midsize pickups, you might do well to start shopping now. Midsize pickups are going to evolve. They have to if they’re going to survive. — Bill Visnic, Motor Matters

Copyright, Motor Matters, 2010

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