U.S CONTINUES ITS LOVE AFFAIR WITH PICKUPS
And with 3 new versions on the way, automakers are sure to reap the profits
When Aaron Bieber bought a pickup a few weeks ago, he raised eyebrows.
“I’m a software engineering manager who works in Boston, I ride the train every day, and I go buy a pickup truck,” he said. “And my whole family is surprised about it.”
But Bieber, who bought a 2011 Nissan Frontier from a CarMax dealership, is not alone. U.S. families and workers are piling into pickups at a feverish rate, and automakers are responding with innovations and comfortable design packages that translate directly into profits.
At the North American International Auto Show on Monday, General Motors, Ford Motor and Fiat Chrysler are all showing off new pickups:
❚ Ram 1500: Fiat Chrysler is introducing a new version that is nearly 225 pounds lighter and more aerodynamic for better fuel economy yet capable of handling higher payloads.
❚ Ford Ranger. The midsize pickup returns to the Ford lineup for the first time since it was discontinued in 2011. It will come with a turbocharged engine option and 10-speed transmission. Unlike the F-150 full-size truck, Ranger will be aimed at “a little more of an urban customer” who may use it for weekend fun, said Raj Nair, Ford’s president for North America. ❚ Chevrolet Silverado. The 2019 version of the truck was unveiled at a splashy event by GM. It will come in eight versions for different kinds of pickup buyers.
The trio of new pickups underscores the industry’s heavy reliance on triedand-true models that continue to pay the bills, enabling companies to invest in futuristic but costly self-driving technology and advanced electric vehicles.
Americans can’t get enough. U.S. pickup sales rose 4.8% in 2017 to 2.69 million, according to Kelley Blue Book, resisting the overall industry’s 1.8% decline after a record overall 2016.
Bieber said he drove a BMW coupe when he was “a young dotcom guy and single.” But after getting married, having a baby and moving to the Boston suburbs, he needed something with the practicality of a hatchback he owned recently. “I got a lot of utility out of the extra space, and I thought, ‘Why stop there?’ ” Bieber said.
He soon found himself diving into online automotive research, absorbing the ins and outs of crew cabs, bed styles and interior creature comforts.
“One thing that surprised me is the huge range of price,” he said. “You can spend an awful lot on a pickup truck.”
That you can. For example, the average sale price of Ford’s F-series pickup — the most popular model in the U.S. — hit a record $47,800 in December, Ford U.S. sales chief Mark LaNeve said.
Pickup prices have soared in part be-
cause buyers want their vehicles outfitted with the same types of features as high-end sedans and crossovers.
Automakers have also responded with luxury variants of their bread-and-butter pickups, including GM’s GMC Sierra Denali, Ford’s F-150 King Ranch and Fiat Chrysler’s Ram Limited Tungsten.
And for good reason: Automakers need pickups to pay the bills. The F-series, for example, is widely understood to deliver the lion’s share of Ford’s profits in a given year. The average GM pickup was raking in a profit of about $11,000 in 2016, according to Citigroup analyst Itay Michaeli, while the average GM SUV or crossover was turning a profit of $500 to $1,000. The average passenger car was losing a few hundred dollars.
Foreign brands are grabbing a piece of the pie, as well. Toyota’s full-size Tundra and midsize Tacoma pickups have the most loyal following in the business, according to CarGurus. Nissan is likely to redesign the Frontier soon. And Honda’s new Ridgeline won the 2017 North American Truck of the Year Award.
Even Silicon Valley automaker Tesla, known for its ultraluxury electric vehicles, is set to get into the mix. CEO Elon Musk recently reiterated that he’s “dying to build it.”
GM’s introduction of midsize pickups, the Chevy Colorado and GMC Canyon, several years ago proved to be savvy, putting to rest any fears they would swipe market share away from full-size pickups. Ford is now playing catch-up with its plans to resuscitate the Ranger.
Sandor Piszar, director of Chevy truck marketing, said buyers of midsize trucks are different from buyers of full-size pickups. “They are usually a little more urban, a little younger — looking for something that works 9 to 5 and something that enables the lifestyle on the weekend,” Piszar said.
Midsize trucks have become part of “work and recreation,” Ford truck marketing manager Brian Bell said. Owners “work all week, then use this truck to go out where they go climbing and hiking.”
One factor currently driving pickup sales is the flourishing economy. With the housing sector in good shape, the job market at essentially full employment and interest rates relatively low, the mix is right for strong sales.
And if Washington pulls together a bipartisan package to invest in the nation’s infrastructure, that could provide yet another boost, Autotrader.com analyst Michelle Krebs said. That’s because auto sales typically get a sharp boost from an increase in construction activity. But even without an infrastructure plan, Krebs said, “2018 is going to be a huge year for pickups.”
Just don’t expect the feverish competition to lead to sharp shifts in market share. About 40% of pickup owners say they are “not at all likely” to switch brands with their next purchase, according to CarGurus.
“Whether there are ups or downs in the economy, you can count on the core group of buyer who needs to have a pickup truck,” Piszar said.