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The Future of the Truck Market

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Old 04-11-10, 09:08 AM
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Default The Future of the Truck Market

http://editorial.autos.msn.com/artic...mentid=1135661

Can the pickup truck, traditionally considered a gas-guzzling workhorse, survive in a world where fuel economy is often valued above functionality? The answer is complicated.

By Kirk Bell of MSN Autos


Americans love their pickup trucks. In fact, the best-selling vehicle in the U.S. is not a car. For more than two decades, the vehicle atop the sales charts year after year has been the Ford F-150 half-ton pickup. This impressive record stems from the vehicle's rugged demeanor and stellar all-around capability — characteristics admired by all truck buyers, regardless of the brand they purchase. Ever since the first factory-assembled pickup rolled off the line in 1925, it has been a symbol of this country's virility, a tireless laborer and trusted friend to working men and women. Today, most pickup trucks are still used to support a dizzying array of industries, ranging from farming and mining to delivery services and construction.

What differentiates modern machines from the trucks of yesteryear is that the mechanical workhorses built in the last 15 years or so are more civilized, offering luxury amenities and a level of comfort equal to that of a car. As a result, a greater number of people purchased them in the mid- to late 1990s and early 2000s as everyday drivers, not just to haul tools and supplies to a job site. For this reason, the light-truck segment — which includes vans, crossovers, SUVs and pickups — exploded during that time; by 2004, light trucks accounted for 54.5 percent of overall vehicle sales in this country.

Over the past few years, however, skyrocketing gas prices, government fuel-economy mandates and the global economic meltdown have all conspired against the light truck. After falling slowly to 51.2 percent of the market in 2007, light-truck sales dropped to 45.4 percent by the end of 2009, and the slide is not expected to stop anytime soon.

But how has this affected our beloved pickup? Is America's obsession with it still going strong? We crunched some numbers and spoke to some experts to find out what the segment's future might be. What we discovered was that to go forward, the pickup must get back to its roots as a capable and trusted workhorse. However, that might be easier said than done.

Full-Size Trucks Down, but Not Out

Full-size pickup sales dropped 48 percent from 2007 to 2009. Still, while the segment has only six nameplates (Chevrolet Silverado, the Ram (formerly the Dodge Ram), Ford F-Series, GMC Sierra, Nissan Titan and Toyota Tundra), it accounts for more than 1 million vehicle sales. That's nearly one-tenth of all vehicle sales here in the U.S., which makes it a significant player.

Even with sales tanking, the experts we polled believe that the full-size pickup is here to stay, and will thrive once again. The pickup market is down because the economy is down and the housing market is down," says Chevrolet General Manager Jim Campbell. "As the economy continues to improve and there is better credit available [for people to build and buy houses], full-size pickup sales will go right back up with it."

In addition, automakers have put a lot of effort into improving the full-size pickup over the past few years, especially in the areas of fuel economy and engine technology. The Dodge Ram 1500, for instance, was new for the 2009 model year, and the 2500-3500 models have been redesigned for 2010. With the redesign, the Hemi 5.7-liter V8 engine added variable valve timing, increasing fuel economy by an estimated 4 percent. Chrysler Group LLC expects its investment in full-size pickups to pay off. "We are projecting Ram sales to be up to 415,000 units by 2014," says David Elshoff, head of Ram truck brand communications. "That's nearly a 50 percent growth in volume." Now under new management, the Ram brand has been separated from Dodge to stand alone. Chrysler plans to stick with the current Ram design through at least the 2014 model year.

The Ford F-Series also enjoyed a well-received redesign for the 2009 model year. In the process it dropped its old-tech, overhead valve V6 engine, opting instead for a newer overhead cam V8 with three valves per cylinder. All but the base V8 are now available with a 6-speed automatic transmission instead of a 4-speed, and Ford added a fuel-economy-oriented SFE package with a lower axle ratio and low-rolling-resistance tires. Ford says it will offer diesel and turbocharged V6 engines for the F-150 as well. The F-150 is due for its next update in the 2015 model year.

General Motors' truck lineup was last updated for 2007, but it added some fuel economy improvements for 2009. Like the Ford, the Chevrolet Silverado and GMC Sierra added a 6-speed automatic transmission, as well as an XFE version similar to Ford's SFE package. GM also focused on hybrid pickups with the introduction of the Chevy Silverado Hybrid and GMC Sierra Hybrid; a 2-mode hybrid design in both trucks allows them to travel up to 30 mph on electricity alone. The standard GM pickups are scheduled for a redesign starting with the 2013 model year.

Small Trucks Aren't So Lucky

Unfortunately, the same cannot be said for "small" pickups (better labeled as midsize trucks). The small-truck segment was similarly hit hard over the last two years, with sales falling more than 48 percent from 2007 to 2009. However, that number is misleading. This segment has been on the outs for much longer. Looking back, sales of small trucks dropped 35 percent from 2002 to 2007, during which time full-size pickup sales fell only 1.25 percent.

John Wolkonowicz, senior automotive analyst at Boston-based IHS Global Insight, says the reason midsize trucks are becoming extinct is because they don't really serve a purpose: "They're fundamentally useless. They can't work, because they don't have a high enough load rating or big enough engines. And they don't have any prestige, so you don't buy them because you want to look macho."

These trucks also are largely inefficient. The powerful V8s in full-size pickups offer fuel economy that is virtually equivalent to the small trucks' V6s, which tend to be older engines that are less evolved. Even worse, considering the current economic conditions, midsize trucks aren't a bargain. A well-equipped midsize truck can cost as much as a full-size truck. Their only real advantage is a smaller size that makes them more maneuverable.

Even more telling is the fact that manufacturers have been ignoring this part of the pickup segment for almost a decade, leaving it to rot on the vine, so to speak. No midsize pickup signifies this more than the Ford Ranger, which hasn't been redesigned since 1998. It's not alone. Most trucks in this class haven't been significantly updated in years. The Chevrolet Colorado and sibling truck GMC Canyon were redone for the 2004 model year. The Dodge, er, Ram Dakota was redesigned for 2005, as were the Nissan Frontier and Toyota Tacoma. The Honda Ridgeline, which is unique in its unibody construction, was introduced as a 2006 model, almost five years ago. No major updates for any of these vehicles are scheduled anytime soon.

According to Wolkonowicz, the domestic automakers plan to shelve their midsize offerings. He says the Ranger is scheduled to be dropped after the 2012 model year, the Canyon and Colorado are done after 2013, and the Dakota is likely finished after 2011. For its part, Chrysler group says it will study the Dakota. "As Dakota phases out of its planned lifecycle, we're exploring plans for an affordable replacement that meets the work-hard, play-hard needs of our customers," says Ram's Elshoff. "Although the Dakota is a great truck, there just isn't a big enough gap between it and the Ram 1500." A possible replacement could be a unibody pickup like the Honda Ridgeline.

A few carmakers still believe the midsize segment has traction. Volkswagen is launching the Amarok pickup this year. Built in Argentina, it will debut in South and Central America and then slowly roll out to the rest of the world. However, one place it's not scheduled to be sold is North America, the biggest truck market on the planet. Mike Levine of PickupTrucks.com has reported that Stefan Jacoby, president and CEO of Volkswagen of America, said VW would have to sell 100,000 units per year to make money in the U.S. That is highly unlikely, since the only small pickup achieving that figure in 2009 was the Toyota Tacoma, and the future for that model is dim at best. "Between rotting-out frames, letting spare tires fall onto the road and the regular Toyota malaise, I don't think the Tacoma is going to continue to be popular," Wolkonowicz says.

To be fair, he doesn't see much hope for any small truck, calling the segment irrelevant. "It will continue to languish," he says, and eventually go the way of the dinosaur.

Lifestyle Products Will Survive, But in Fewer Numbers


Due mostly to fuel prices, personal-use pickup buyers — those who purchased a truck because they liked its looks or image but didn't necessarily need a truck — have dwindled in recent years. Wolkonowicz estimates that one-third of the market consisted of personal-use buyers before the fuel price spike. He now estimates that maybe 7 or 8 percent of customers are of the personal-use variety.

Even so, automakers will continue to sell personal-use and lifestyle pickups, such as the off-road-ready Ford Raptor and Dodge Power Wagon and the brawny Ford F-150 Harley-Davidson Edition. However, flash-and dash pickups, such as the Ford Lightning and Dodge Ram SRT10, may have seen their last days. They just aren't fuel-efficient or versatile enough for today's truck buyers.

Conversely, hybrid pickups may play an important future role. Current versions get about 20 mpg, an improvement of about 25 percent over their gas-powered counterparts. Sadly, they lack some capability, which is a sin to traditional truck buyers. In particular, towing capacity is down. But fledgling gas-electric propulsion technology will most likely improve to the point where hybrid pickups actually deliver more capability and, thus, become a viable alternative for those who value a rough-and-tough machine that can tow a boat and haul tons of cargo. After all, an electric motor creates its greatest power at zero rpm, which is perfect for a pickup that needs to pull a heavy load. Hybrids are also important to manufacturers, for obvious reasons. "Hybrids will see some significant penetration, particularly as we head toward 2020," Wolkonowicz says. "They're going to have to in order to meet government Corporate Average Fuel Economy regulations."

The Road to Recovery

So when will the economy — and therefore the housing market — and pickup sales turn around? According to Wolkonowicz, "It's going to turn around slowly. This year is expected to be better, but not that good. The recovery will most likely start in calendar year 2011, and then really take off in 2012 and 2013." IHS Global Insight predicts total U.S. vehicle sales will increase from 10.4 million in 2009 to 11.5 million this year, then to 13.8 million in 2011 and 15.5 million in 2013. But all of that is speculation. No matter when the recovery happens, full-size pickup sales will remain steady and there is potential for growth. Too many people simply need them. The rest of the segment, however, is looking at a rough road.

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Old 04-11-10, 09:11 AM
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I find it interesting that small/midsize trucks are predicted by many to be approaching extinction. But thinking about it, it might just make sense. I think though that the full-size lines will have to be even more expanded with the base models coming in even more affordable to compensate for the absence of small models. Right now, the only “successful" mid-sizer is the Tacoma which the article predicts won’t fair as well in the future. I guess time will tell. Ford is the most surprising though. Basically selling the same Ranger since 1998!? They have made no attempt to build a competitive model in this segment while building what is by far the best selling full size truck. Why have they not gone after the well selling Tacoma? I kind of think they don’t want to cannibalize the F-150 with a bigger Ranger as those big sales numbers are critical to the F-150.

Ultimately, I think small trucks will survive in part with Toyota continuing to lead the way. I just can't see Toyota dropping the Tacoma after all of these decades of success. Plus, with minimal offerings from other companies, that could just mean more sales for those who continue to offer one. It does look like Ford will drop out completely. Maybe GM as well.

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Old 04-11-10, 09:17 AM
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Well they used to be compacts! Now they are mid-size. If the Americans go away then the Tacoma is going to clean up here.

I had no idea the Ranger was going to be dropped.

It makes sense, I mean with discounts and rebates you can get a huge full size for the price of a mid-size any time of year.

It just seems to me its another classic case of buying bigger for the sake of being bigger which seems to resonate with Americans. Its never about buying the right size or what is logical but just what is biggest.

Will these trucks be exempt from MPG changes?
 
Old 04-11-10, 10:37 AM
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Nice to see the VW rep taking pot shots at the Tacoma
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Old 04-11-10, 01:38 PM
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Originally Posted by MR_F1
Nice to see the VW rep taking pot shots at the Tacoma
Really lame how VW tries to take shots at Toyota whenever they can . I sense a lot of envy and bitterness here .
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Old 04-11-10, 03:30 PM
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IMO, the Tacoma and Frontier are set to clean up in their next generations...far from the doom that is portrayed here. If Ford is dropping the Ranger, GM comes out with another crap-tastic Canyon/Colorado, and Chrysler rolls out another worthless Dakota, these two trucks are the obvious choices.

I noticed that when gas prices started going up, many of the utility and contractor companies in my area went from F150s, Silverados, and Tundras to midsize trucks and most of them chose the Tacoma. Georgia Power, Atlanta Gas/Light, City of Atlanta, and several others all use Tacomas now, and I feel like I am seeing more and more of them around. The last generation Tundra was considered the "right size" truck by many people and now that the Tacoma is about the same size and offered in several variants, I wouldn't be surprised if it actually achieves similar success to the Tundra in coming years.

My .02.
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Old 04-11-10, 03:32 PM
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Originally Posted by MPLexus301
IMO, the Tacoma and Frontier are set to clean up in their next generations...far from the doom that is portrayed here. If Ford is dropping the Ranger, GM comes out with another crap-tastic Canyon/Colorado, and Chrysler rolls out another worthless Dakota, these two trucks are the obvious choices.

I noticed that when gas prices started going up, many of the utility and contractor companies in my area went from F150s, Silverados, and Tundras to midsize trucks and most of them chose the Tacoma. Georgia Power, Atlanta Gas/Light, City of Atlanta, and several others all use Tacomas now, and I feel like I am seeing more and more of them around. The last generation Tundra was considered the "right size" truck by many people and now that the Tacoma is about the same size and offered in several variants, I wouldn't be surprised if it actually achieves similar success to the Tundra in coming years.

My .02.
I agree. Plus, I think the Tacoma is set for a redesign soon, which will only help it's success even more. The current dated Tacoma is the clear leader in the midsize/small truck segment in the US.
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Old 04-11-10, 03:37 PM
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Yeah, Tacoma and 4Runner typically follow each other's cycles so we should be seeing a new one in the next few months.
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Old 04-11-10, 04:49 PM
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Originally Posted by MPLexus301
Yeah, Tacoma and 4Runner typically follow each other's cycles so we should be seeing a new one in the next few months.
Yet the current Tacoma is already the most up to date mid-size on the market.

That's part of why no one else can touch the Tacoma, Toyota actually keeps up with it while Ford and others ignore theirs.
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Old 04-11-10, 05:52 PM
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I think the small pickup for business will be replaced with the small box truck, like the Ford Transit Connect.
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Old 04-11-10, 06:07 PM
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I think mid sized trucks with at least an access cap or more preferably a crew cab/double cab are the wave of the future. I wouldn't own a Tacoma truck right now if it were not for the double cab. It appeals to those people that would love to have a truck as a second car to haul stuff when needed, but can't really justify buying a truck specifically for the limited use. With a double cab you can drive it everyday and use it like a car, but have an open bed when you needed it. That was the appeal for me.
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Old 04-11-10, 08:12 PM
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Small trucks like the Colorado and Ranger are overdue for updated engines. The Ranger could be more efficient and powerful if it recieved the 2.5L I4 as a base engine, in place of the ailing 2.3L.

Hybrid pickups could sell, but I think that GM has the wrong engine paired with their hybrid drive. They should have paired it with a 6 cylinder which would have given a nice balance of power and fuel economy. A 7000 lb. Towing capacity is nice, but chances are most people will opt for a diesel. Supposedly GM is working on a 4.9L V8 to pair with their hybrid drive.

I also expect the new 5.0L V8 from the Mustant to go into Ford trucks. There is no way that Ford would design this engine for just one vehicle.
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Old 04-11-10, 08:24 PM
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The problem for Ford and GM isn't engines...it's that the entire package, from bumper to bumper, is G-A-R-B-A-G-E.

Just sayin'
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