Forbes Asks: Are The Big Three Losing Their Edge In Pickup Trucks?
Foreign manufacturers dominate the car market in the United States. But Detroit--General Motors, Ford and DaimlerChrysler's Chrysler division--still holds 70% of the truck market. U.S. companies are trying to win back some car business while foreigners are attempting to expand their truck share. A reasonable strategy for both sides.
The light truck market is divided into four key segments: big pickups, smaller pickups, minivans and sports utility vehicles.
Big pickups are the mother lode. Last year the Big Three sold 2.2 million of them--or 22% of all cars sold by Detroit in 2003. Toyota retailed 100,000 Indiana-built Tundra pickups, and Nissan is building its big and powerful Titan in Mississippi. The Titan is new for Nissan and its dealers, and I figure just 60,000 sales this year. So at least for now, the Japanese aren't taking over the big pickup market.
In a few years, when it finishes its factory in Texas, Toyota will have a second pickup plant in the U.S., and will eventually sell 250,000 big pickups a year. At some point Nissan will get up to the 100,000 level. But Ford General Motors and Chrysler will continue to dominate this market for the foreseeable future.
The sport-utility-vehicle market is split. Detroit dominates in big, body-on-frame vehicles like GM's Suburban and Tahoe, Ford's Expedition and Explorer, and Chrysler's Dodge Durango. Foreigners dominate in crossovers--SUVs built off passenger car underpinnings--such as the Toyota Highlander, Lexus RX330 and the Nissan Murano. The Koreans are here, too (the Hyundai Santa Fe).
Detroit is slowly bringing out crossovers. A new Ford crossover comes this fall in addition to the Escape--the sales leader among smaller crossovers. But the Asians continue to grow and gain sales in this segment.
Foreign nameplates--particularly Asian--are also strong, and getting stronger, in smaller pickups.
| 2003 Small-Pickup Sales | |
| Ford (Ranger) | 209,117 |
| GM (Chevy S10, GMC Sonoma) | 176,629 |
| Toyota (Tacoma) | 154,154 |
| Chrysler (Dodge Dakota) | 111,273 |
| Nissan (Frontier) | 65,161 |
| Source: Automotive News | |
Detroit says that its big pickups have taken business away from the small ones. That is possible. But I say that the trouble is that most of their small pickups are drab and boring. The Americans put most of their efforts into improving their big pickups.
Ford considers these little trucks "bottom feeders," not worthy of significant investment because they can't charge enough to make big profits. Ford even closed one of its Ranger plants. Yet I remember another Ford "bottom feeder," a low-priced compact car, the Falcon. A smart, young, Ford man named Lee Iacocca used the core components of the Falcon, and built an immensely successful offshoot--the Mustang.
GM just brought out new small pickups, the Chevy Colorado and the GMC Canyon. They aren't even selling as well as the ancient models that they replaced. No wonder. These vehicles are variations of a truck originally designed for use in Thailand. This is an example of GM's misguided global thinking, in which what's good enough for drivers in Thailand is supposed to be good enough for Texans.
Alas, GM can't even put a six-cylinder engine in these new pickups, so the largest available motor is an inline five-cylinder. The new trucks have less maximum towing capacity than the old models. I don't understand this strategy.
Now I could be wrong. GM says the problem with the new little pickup is a slow production start for the popular crew cab model--the one with four real doors. So we'll see what happens.
But it's an old story: Manufacturers build the same inadequate vehicles for ten years, then irresponsibly attribute poor sales to shifting customer habits or market changes. Before long we'll be hearing complaints about the undervalued yen or the costs of health insurance and retiree pensions as excuses for Detroit's retreat from this segment.
In May Toyota's Tacoma was the top-selling smaller truck, outselling Ford's Ranger and GM's Chevy Colorado and GMC Canyon. Next fall Toyota will have a new Tacoma, bigger and with some hot engines (the top one has 300 horsepower). Nissan, too, will have a new, and bigger, Frontier. And next spring Honda Motor (nyse: HMC - news - people ) will have its first pickup-like vehicle. My view: Foreigners are poised to take more of this business.
Minivans are another trouble spot.
Chrysler, the minivan's inventor, is still the leader and working hard to improve its models, but right now Toyota's Sienna and Honda's Odyssey minivans each are outselling Ford's Mercury model and all of GM's combined.
This is another case where the Asians worked hard to find out what Americans wanted from their vehicles, and their efforts are paying off. The U.S. manufacturers are following some of these lessons in an attempt to regain ground in the passenger car business. But they dare not turn their backs on their truck operations.
