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Prime time for big pickups



Admin22.01.2013г 

Prime time for big pickups

Low incentives, new products and construction sites filled with aging pickups have set the stage for an especially competitive -- and lucrative -- battle in the one segment the Detroit 3 still dominate: big pickups.

That's why the most important new vehicle for General Motors this year is not the Corvette Stingray currently drawing big crowds at the Detroit auto show, but the redesigned Chevrolet Silverado parked nearby.

It's why Ford Motor Co. made sure to steal some of GM's auto show thunder by rolling out an unusually early glimpse of the next F-150, more than a year before it goes on sale.

And it's why Chrysler Group emerged from the show supremely confident after its Ram 1500, re-engineered several months ago, was named North American Truck of the Year.

"It's a gunfight," said Fred Diaz, president of the Ram brand. "It's not a matter of being the newest truck on the market; it's more a matter of being the best truck on the market."

The improved trucks, combined with gains in the economy and housing market, are giving the companies' executives and dealers reason to salivate.

"We've got a lot of opportunity with this truck," said Mark Rowe, general manager of Henna Chevrolet in Austin, Texas, where the Silverado accounts for half of the store's new-vehicle sales. "It'll get a lot of people in the showroom. As the overall business climate improves I think people will have the confidence and the motivation to refresh their fleets or buy the family a new vehicle."

Sales of full-sized pickups this year are expected to outpace overall industry growth for the first time in years, said Alec Gutierrez, senior market analyst with Kelley Blue Book. He said his conservative forecast is for the segment to increase by about 7 percent, compared with around 5 percent for overall car and truck sales.

That would put sales of full-sized pickups at about 1.7 million, which is still short of the 2.1 million sold in 2007. But fewer incentives and higher transaction prices could make pickups more valuable to Detroit, even at the lower volume, than they were during the prerecession truck boom.

"The macro indicators are generally in place to support a strong truck market," Gutierrez said. "We're not too far behind where we were at back in 2007 and years prior."

Large pickup trucks often generate profits of $10,000 to $12,000 each, according to Adam Jonas, an analyst with Morgan Stanley. Ford's F-series pickup, the top-selling nameplate in the United States for 31 consecutive years, accounts for 70 percent of the company's North American profits and as much as 90 percent of its global profits, Jonas estimates.

Accordingly, automakers and dealers will be fighting hard for each sale, with the competition intensifying after GM's trucks reach showrooms this summer and even more so when the redone F series arrives, probably at least a year later.

"We still are absolutely dependent upon the truck being a success for the dealership's success," said Carroll Smith, owner of Monument Chevrolet just outside Houston. "It makes you nervous when you're coming out with something new and the stakes are so high. It will be a slugfest."

Smith said he is excited to be getting a redesigned Silverado at a time when increased home building activity likely will prod contractors to replace pickups.

"If Bubba's not building a house he doesn't need a new truck to carry his tools," Smith said. "I'm excited that Bubba's going to be building a house again."

Ford COO Mark Fields, said he sees considerable opportunity in the fact that the average pickup on the roads today is about 11 years old. One quarter are at least 15 years old, he said.

Ford's recent truck strategy has been to focus heavily on fuel economy, and a large proportion of the F-series models it now sells are powered by V-6 engines rather than V-8s. Ford also is trying to attract buyers with high-tech features such as the F-150 Atlas concept's automated trailer backup system.

"It used to be the segment was all about capability," Fields told reporters after Ford unveiled the Atlas concept, which previewed the next F-150 "The new dynamic is they want fuel efficiency, but they don't want to compromise on capability."

GM's approach has differed; it is now the only one of the Detroit 3 to offer compact trucks, which are aimed at buyers willing to sacrifice size and performance for a lower price and better fuel economy.

GM officials argue that Ford's emphasis on fuel economy results in a more costly but less capable truck, while Ford dismisses GM's full-sized pickups as out of step with the preferences of today's buyers.

"Others have been trying to turn it into just a fuel-economy story," said Jeff Luke, GM's executive chief engineer for full-sized trucks. "Fuel economy is important, but so are other things. We want to provide a value proposition."

Some observers wonder whether GM went far enough with the redesigned Chevy Silverado and GMC Sierra. They feature significantly improved interiors and amenities such as a step built into the corner of the rear bumper, though exterior styling changes are relatively conservative.

GM says power, towing capacity and other specs will be improved from the current models but has yet to release specific figures. Officials have said their fuel economy will be "compelling" but have given no indication that the trucks will be more efficient than the F-150 and Ram 1500.

By showing the Atlas concept now, rather than waiting until the production version is finalized next year, Ford was hoping to exploit any weakness that would-be buyers perceive in the GM trucks.

"We thought it was the best time to demonstrate that we have no intention of relinquishing our leadership," said J Mays, Ford's global design chief. "We just wanted everybody to remember who was the truck leader."

Read more: autonews.com




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