The market for pickup trucks has been left for dead by most recent news reports, but as we learned from Miracle Max in “The Princess Bride,” there’s a big difference between “mostly dead” and “all dead.”
“Mostly dead is slightly alive,” Miracle Max explained in the movie. Slightly alive, in this case, means that pickup trucks still represent the third-largest automotive segment in North America, comprising 11 percent of all vehicle sales.
Not only that, but the pickup segment has fewer competitors than the better-selling small and midsized car markets, and it enjoys fatter profit margins. That means that despite the dire reports of the collapse of U.S. truck sales — they will fall from 2 million per year to about 1.4 million in 2008, according to CNW Market Research — they remain a vital and profitable chunk of the vehicle market.
So with some truck buyers turning their noses up at pickups because of high gas prices, automakers must still find a way to appeal to them. Some are looking at producing the compact pickups popular in the 1970s and ’80s as a way to do that.
The biggest problem for truck sellers is that a lot of truck buyers never needed trucks in the first place. Once gas prices made fueling an unneeded truck prohibitively expensive, those buyers fled the market like rats from a capsized garbage scow.
Why? Because these truck buyers used their mighty 4x4s for the crucial task of “hauling air,” said Mike Accavitti, director of Dodge brand marketing and communications for Chrysler.
Indeed, a full quarter of former truck buyers fall into the category Ford calls, “never, never, nevers,” said Mike Crowley, group marketing plan manager for Ford trucks and SUVs.
“That means they never tow, they never haul, and they never go off-road,” he said. They might occasionally haul a load of mulch or shuttle a kid off to college, but that was the extent of their truck use.
These buyers really just need an open bed, a hitch and some minimal capability. They bought six-cylinder full-size pickups before full-size trucks evolved into today’s behemoths, and they bought four-cylinder Japanese mini-trucks when they were popular.
Those customers are still out there, but manufacturers aren’t sure how best to approach them. Midsized trucks like the Dodge Dakota and Nissan Frontier haven’t set sales records, and Honda’s midsized, carlike Ridgeline is widely regarded as a sales failure.
So what do customers want? Maybe a cheaper, more fuel-efficient full-size or midsize truck? Perhaps they want something like the old Ford F-100 model that was the entry level of the company’s truck line at one time. Rumors are flying that the company is contemplating a revival of that model, but Ford execs remain mum on the topic.
“They are doing it,” insisted Jim Hall, managing director of 2953 Analytics, a market research company.
“Light duty will go back to meaning light duty,” he said. “Today’s trucks are grossly over-engineered for towing and hauling. That’s why Ford is doing this new F-100 project. The biggest engine you’ll be able to get in it will be a six-cylinder.”
What’s unknown is whether a traditional full-size, body-on-frame pickup — even a cheaper, lighter one — is what customers want. Honda recognizes the need for a less-costly, more efficient Ridgeline.
“The buyer doesn’t tow as heavy as we thought,” acknowledged Eddie Okubo, manager of Honda product planning for trucks. “With the Ridgeline we were late to the party, so we added a lot of features,” he said. “It made the truck heavier and pricier.”
Toyota has shown a concept truck called the A-BAT at recent auto shows. It’s a true compact, unit-body vehicle that returns to the proportions and efficiency of the old compact trucks, while adding some flexible features that let the customer expand the bed into the cab to occasionally haul larger objects.
Landscapers, gardeners and people who haul active outdoor equipment like bikes, personal watercraft and motorcycles are all suitable buyers for a smaller, more fuel-efficient truck, said Tom Rocchio, manager of advanced product strategy for Toyota. Those buyers have purchased full-size trucks until now because there was effectively no penalty to doing so.
Full-size trucks cost very little more than smaller ones, and until recently the fuel was so cheap that the difference in fuel economy was irrelevant.
“Something along the lines of the A-BAT will have a better chance of success [today] than five years ago,” Rocchio said.
Small trucks are more likely to snare such buyers than slimmed-down, full-size models, predicted Dodge’s Accavitti. Dodge hasn’t seen a lot of interest in its slightly smaller Dakota even as gas price have risen, so he said that he thinks the opportunity lies further down market.
“I can see a market opportunity emerging for an ultra-light-duty pickup truck,” he said.
An obstacle to the adoption of smaller trucks is the U.S. government. If the new corporate average fuel economy standards — which mandate each automobile manufacturer’s fleet of vehicles average a certain fuel economy level — are written so that vehicles’ efficiency is compared against their physical dimensions, compact pickups will be at a handicap when trying to achieve the prescribed numbers, pointed out Hall.
“In that case, you would be out of your mind to do a small pickup,” he said.
Another challenge for designers of smaller trucks will be to ensure safety. A recent announcement by the Insurance Institute for Highway Safety that currently available small trucks fared poorly in its crash testing highlights this as an area where consumers will likely demand improvement.
So perhaps the fate of the compact pickup segment lies in the hands of federal regulators who will decide whether the tiny trucks are “all dead,” or just “mostly dead.”
