PUTC: Critics Warn Midsize Pickup Growth Not Sustainable

[Bryan1]

3 weeks after Mark Williams from PUTC said the Colorado wasn't stealing sales from full-size trucks...

 

by Mark Williams | April 28, 2015

 

"Clearly the all-new 2015 Chevrolet Colorado and GMC Canyon have injected some adrenaline into the midsize pickup truck segment and, so far, have provided all the segment players with growing sales, but for how long and at what cost?

 

According to Automotive News, as many as 16 percent Colorado or Canyon buyers switched from their full-size counterparts (the Silverado or Sierra 1500). Some experts think this potentially means that Colorado and Canyon sales eventually could take a big bite out of GM's half-ton pickup profits as well as flatten sales.

 

Some analysts believe the next few years will be good for midsize pickups due in large part the two new players and a revitalized Toyota Tacoma coming out by the end of this year, but over the next five years things could be different. Even if the midsize truck segment grows, some are saying it won't get bigger than 500,000 units, meaning less than 3 percent of the entire automotive industry — not even close to the segment's heyday in the late 1980s at around 9 percent."

 

Read more at the link: http://news.pickuptrucks.com/2015/04/critics-warn-midsize-pickup-growth-not-sustainable.html

[rmc523]

I wouldn't be surprised to see GM dump out incentives to keep numbers of both (midsize and full size) up just to say "I told you so."

[Bryan1]

There has always been a certain amount of cross-shopping between midsize and full-size pickups, so that is nothing to be concerned about. But if you look at sales since Colorado and Canyon were introduced, you see strong demand, strong prices and very low dealer inventories. Customers are reentering the segment from all sorts of GM and non-GM vehicles, just as we predicted.

If you talk to dealers or customers, there is NO sign that this is a flash in the pan. This is one of those times where the analysts and reporters need to get out from behind their computer screens and talk to customers and dealers in the real world.

Posted by: Tom Wilkinson at Chevy | Apr 28, 2015 9:20:45 AM

No doubt there is pent up demand, but keep in mind that the midsize segment ran at 800,000+ units a year for 20 years. That is a lot of customers, and a LOT of pend up demand.

Also, when you talk to customers in traditional midsize truck markets like southern California or the northeast US, it becomes clear that there are a lot of people for whom a midsize pickup is their preferred vehicle, due to narrower roads, denser traffic, smaller parking spaces, etc.

How you feel about midsize trucks depends a lot on where you live and where you drive.

Posted by: Tom Wilkinson at Chevy | Apr 28, 2015 9:49:33 AM

 

Nissan makes a good truck but its light years behind the GM Twins. This article was written by MiKe Levine, Ford Gurls are just jealous that GM has the guts to enter this market and win.

Ford wont bring back the Ranger, they only care about the sales numbers, everyone knows GM owns the sales in relation to individual owners, only the fleet sales help Furd win anything.

Posted by: Mr Obvious | Apr 28, 2015 2:24:46 PM

 

[rmc523]

Did you just quote two articles written by a Chevy guy and some random comment from some random poster calling them "Ford gurls" and "Furd" "only caring about sales numbers?"

 

That's proof right there - argument settled.

[twintornados]

Ford can handle this with a full-sized based F100. Regular cab and extended cab only. Composite panels on the bed. Lighter weight suspension components and a 2.3L Ecoboost I-4. Top trim is limited to XLT.

[SoonerLS]

Ford can handle this with a full-sized based F100. Regular cab and extended cab only. Composite panels on the bed. Lighter weight suspension components and a 2.3L Ecoboost I-4. Top trim is limited to Ranger.

FIFY.

[rmc523]

Ford can handle this with a full-sized based F100. Regular cab and extended cab only. Composite panels on the bed. Lighter weight suspension components and a 2.3L Ecoboost I-4. Top trim is limited to XLT.

 

But that's just it - nobody is going to buy a vehicle like the old Ranger - nobody wants a regular cab and few will buy an extended cab only model. Buyers these days want a full 4 door cab

[RichardJensen]

Yeah.

 

I want a crew cab.

 

And a full size truck bed.

 

And I don't want it to be big.

[bzcat]

Also, this is not a zero sum game... Sure, Ford can probably sell 50k Ranger easily but it would be foolish for Ford to cancel one of its model, set aside a production line to build Ranger in the NAFTA zone, when it has bigger fish to fry.

 

Would Ford be better off profit wise with 70k Bronco sales that could easily reach $40k ATP... or 70k Ranger in the $28k ATP range that will cannibalize a good portion of F-150 or Transit Connect volume?

Edited April 28, 2015 by bzcat

[Bryan1]

Did you just quote two articles written by a Chevy guy and some random comment from some random poster calling them "Ford gurls" and "Furd" "only caring about sales numbers?"

 

That's proof right there - argument settled.

 

 

I quoted it to show the anti-Ford fanbois and the Chevy Communications Manager talking points.

 

Too funny.

 

Awhile ago someone asked about conquest buyers, here is some info on that. Is GM conquesting their own vehicles?

 

"However, beneath the encouraging numbers for the Colorado and Canyon are some less positive trends, said IHS Automotive analyst Tom Libby. Nine of the top 10 vehicles previously owned by buyers of the Colorado and Canyon are GM cars and trucks.

 

Owners of full-size Chevrolet Silverado and GMC Sierra trucks made up more than 16 percent of the consumers who switched into both smaller GM pickups, according to IHS data.

 

"That was ominous," Libby said. "There may be a deeper issue here" related to the potential for undercutting sales of higher-margin models."

 

http://www.autonews.com/article/20150423/RETAIL01/150429908/gm-gets-boost-from-smaller-pickups-but-doubters-question-for-how-long

[Sevensecondsuv]

Also, this is not a zero sum game... Sure, Ford can probably sell 50k Ranger easily but it would be foolish for Ford to cancel one of its model, set aside a production line to build Ranger in the NAFTA zone, when it has bigger fish to fry.

 

Would Ford be better off profit wise with 70k Bronco sales that could easily reach $40k ATP... or 70k Ranger in the $28k ATP range that will cannibalize a good portion of F-150 or Transit Connect volume?

How about make a new bronco and ranger on the same platform and assembly line and sell 150k combined? It's not a zero sum game as you say.

 

Also, ranger was still selling 60k pretty easily when it was cancelled in 2011. If it wasn't for the fact that TCAP had to go, Ford may have been content let the old girl soldier on for another couple years. In any case a new one should be good for at least 75k without even trying.

Edited April 28, 2015 by Sevensecondsuv

[Sevensecondsuv]

Heck, even just replacing the 4.0 with the 3.5/6 speed in the old ranger probably would have bumped sales up to 75k. There was pretty much no reason to buy a 4.0l as they got worse gas mileage than some F150 powertrains by the end of it. Since 4x4 was only available with the 4.0l, the 2wd 4 cyl was the only attractive ranger model. I'd say 60k was impressive given the product and market conditions at the time.

Edited April 28, 2015 by Sevensecondsuv

[rmc523]

Heck, even just replacing the 4.0 with the 3.5/6 speed in the old ranger probably would have bumped sales up to 75k. There was pretty much no reason to buy a 4.0l as they got worse gas mileage than some F150 powertrains by the end of it. Since 4x4 was only available with the 4.0l, the 2wd 4 cyl was the only attractive ranger model. I'd say 60k was impressive given the product and market conditions at the time.

Yeah, but how much did it cost?

 

A new one wouldn't be cheap like that.

[fuzzymoomoo]

The reason the old one was able to stay so cheap was because the tooling was paid for at least 10 years prior to its death. No way a new one can be that cheap without eating all that cost, that's how you go bankrupt.

[Sevensecondsuv]

The old ranger wasn't *that* cheap by the end of it. My 2011 xlt supercab 2.3 manual was $19.5k with x plan. MSRP was about $22k. The V6 4x4 models MSRP was nearly $30k. That was in 2011. Add inflation and the range would be over $30k for the high end models and close to $25k for a mid grade truck like mine. Very similar to the Escape really and tucked in right below F150 which currently starts at $23ish if I remember right.

 

Ford sells plenty of vehicles in this price range, and at a profit no less. The timing hasn't been right for a new Ranger just yet but I'm confident Ford can figure out a way to make them at a profit if the market is there. I think the recent signs of life with Tacoma and canyonado probably have Ford taking another look at the market.

Edited April 29, 2015 by Sevensecondsuv

[probowler]

It seems like Ford is maxed out almost everywhere production wise.... are we going to see new factories ever come online?

[twintornados]

 

But that's just it - nobody is going to buy a vehicle like the old Ranger - nobody wants a regular cab and few will buy an extended cab only model. Buyers these days want a full 4 door cab

 

Exactly my point, the F100 would give the entire F-Series line the model it needs for those that do want regular and/or extended cabs and those that do want a crew cab can migrate up to the F150 where all the bells and whistles are. I have a buddy at work that has a 2012 F150 regular cab/short bed model XL and he loves it. 3.7L auto with no frills was exactly what he wanted....got it for peanuts and replaced his Ranger for it. He actually had to order it because it was a non-stock model. I look at this truck and think that Ford could re-take the mid-size market with a full-sized truck if it really wanted to.

[silvrsvt]

The old ranger wasn't *that* cheap by the end of it. My 2011 xlt supercab 2.3 manual was $19.5k with x plan. MSRP was about $22k. The V6 4x4 models MSRP was nearly $30k. That was in 2011.

 

Yes they where cheap, you do realize that a 1998 Ranger XLT (when the Ranger was still popular) cost roughly the same as a 2011 MY did? My dad still has 1998 and it stickered for around 28K

 

The reason the old one was able to stay so cheap was because the tooling was paid for at least 10 years prior to its death. No way a new one can be that cheap without eating all that cost, that's how you go bankrupt.

 

The last major update of the Ranger was right around 1992. All the other updates where just cosmetic, like a new grill or headlights. My dad had a minor accident in his 1998 has parts (from the plant at the time!!!) from a 2000ish Ranger!

[Sevensecondsuv]

89 was a sheet metal and interior update, was the first year of the 4.0 ohv cologne v6, and introduced distributor less ignition on the 2.3 lima.

 

91 the 3.0 Vulcan v6 replaced the 2.9 cologne v6.

 

The 93 update consisted of new sheet metal.

 

The 95 update consisted of a new interior.

 

The 98 update consisted of new sheet metal including stretching the cab about 1.5" longer, new front suspension (ifs replaced ttb), and the cast iron lima got stroked out from 2.3 to 2.5.

 

The 01 update consisted of new sheet metal, the 2.3 duratec replaced the 2.5 lima, and the 4.0 sohc replaced the 4.0 ohv. I also believe this was the first of rear doors on the supercabs.

 

The 06 (I think) update was the final sheet metal and interior update.

 

08 was the last year of the 3.0 Vulcan V6.

[Sevensecondsuv]

My point about price was that Ford doesn't seem to have any problem making and selling plenty other vehicles in the same price range a new Ranger would fit in. Sure there are more profitable vehicles but there is value in diversifying outside of f series. Hence all the other models Ford makes/sells.

 

If there's a market (and there currently appears to be significant signs of life in it) Ford will bring us something. It's just a matter of everything falling into place with market analysis, design, and assembly.

 

To claim that Ford can make money on Fiesta, Focus, Fusion, Escape, and transit connect, but not Ranger, is ridiculous. It's just a matter of getting the details worked out.

[papilgee4evaeva]

My point about price was that Ford doesn't seem to have any problem making and selling plenty other vehicles in the same price range a new Ranger would fit in. Sure there are more profitable vehicles but there is value in diversifying outside of f series. Hence all the other models Ford makes/sells.

 

If there's a market (and there currently appears to be significant signs of life in it) Ford will bring us something. It's just a matter of everything falling into place with market analysis, design, and assembly.

 

To claim that Ford can make money on Fiesta, Focus, Fusion, Escape, and transit connect, but not Ranger, is ridiculous. It's just a matter of getting the details worked out.

1. Announce a new Ranger

2. Start building it somewhere

3. ??????

4. PROFIT!

[rmc523]

 

Exactly my point, the F100 would give the entire F-Series line the model it needs for those that do want regular and/or extended cabs and those that do want a crew cab can migrate up to the F150 where all the bells and whistles are. I have a buddy at work that has a 2012 F150 regular cab/short bed model XL and he loves it. 3.7L auto with no frills was exactly what he wanted....got it for peanuts and replaced his Ranger for it. He actually had to order it because it was a non-stock model. I look at this truck and think that Ford could re-take the mid-size market with a full-sized truck if it really wanted to.

But Ford is not going to make a completely new F-100 truck that's smaller just to make regular and extended cab versions that nobody will buy. They wouldn't sell or make money....take your example for instance - he had to order it. Why? Because that type of configuration doesn't sell at all, so no dealer would ever carry it. It doesn't make sense for Ford to design and build a completely new model that is going to sell a few hundred units a month.

 

Anecdotal evidence, but I believe every (or at least some vast majority) new Colorado I've seen has been a crew cab. I wonder if there's a way to find those numbers.

 

The point is - even if people are interested in a "smaller" truck - they're certainly not wanting/going back to a regular cab, and they might consider an extended cab. They want 4 full doors. And what we've seen with Colorado is by the time you do that and have a decent bed, it's almost as long (off by a few inches IIRC) as a Silverado, and being a bit narrower.

[Sevensecondsuv]

1. Announce a new Ranger

2. Start building it somewhere

3. ??????

4. PROFIT!

Why does everyone around here take it as an article of faith that a new Ranger absolutely cannot be done at a profit? Just because Ford has chosen not to doesn't mean it's impossible. There are plenty of potential reasons ranging from better use of current assembly line space, lack of suitable platform to start with, or just bigger fish to fry at the moment. But to suggest it's absolutely impossible to do it at a profit when Ford and several other automakers currently build and sell, at a profit, dozens of models in the same price range is ludicrous.

 

Ford had a good excuse for ignoring it when the entire market was all of 150k/year. However, if the current trend keeps up, it's going to get harder and harder for Ford to continue ignoring it.

Edited April 29, 2015 by Sevensecondsuv

[akirby]

It's more a matter of the net profit increase taking into account at least some cannibalization of F series and possibly utilities.

 

There is no simple solution to the factory issue that doesn't involve a significant increase in fixed overhead - probably too much to justify for 75K sales.

 

If there were multiple vehicles sharing the platform and factory space was available then it would be different.

 

I'm sure there is profit to be had, but how much relative to the required investment? And which other Ford project should they cancel to do this? Because you can't just add a new vehicle and factory to the schedule without taking resources from other projects that may have lower cost and yield more profit.

 

It remains to be seen if the market is really rebounding or this is just pent up demand from S-10 and Ranger owners who refuse to buy Tacomas or Frontiers. There is no reason for Ford to rush out until they're sure what is happening with the market and it's way too early to tell.

 

The problem I have with Canyorado is that they didn't just bring their global truck here - they completely modified it AND made two different versions all of which adds significant costs all while ignoring other more profitable and more important products and market segments.

 

This seems to be their decision making process:

 

Does it add more unit sales?

If yes, can we at least break even doing it?

 

This is where somebody needs to step up and look at the bigger corporate picture and make the best choices rather than managing each project individually. This is also where Ford got into trouble pre-2008.

[Sevensecondsuv]

It's more a matter of the net profit increase taking into account at least some cannibalization of F series and possibly utilities.

 

There is no simple solution to the factory issue that doesn't involve a significant increase in fixed overhead - probably too much to justify for 75K sales.

 

If there were multiple vehicles sharing the platform and factory space was available then it would be different.

 

I'm sure there is profit to be had, but how much relative to the required investment? And which other Ford project should they cancel to do this? Because you can't just add a new vehicle and factory to the schedule without taking resources from other projects that may have lower cost and yield more profit.

 

It remains to be seen if the market is really rebounding or this is just pent up demand from S-10 and Ranger owners who refuse to buy Tacomas or Frontiers. There is no reason for Ford to rush out until they're sure what is happening with the market and it's way too early to tell.

 

The problem I have with Canyorado is that they didn't just bring their global truck here - they completely modified it AND made two different versions all of which adds significant costs all while ignoring other more profitable and more important products and market segments.

 

This seems to be their decision making process:

 

Does it add more unit sales?

If yes, can we at least break even doing it?

 

This is where somebody needs to step up and look at the bigger corporate picture and make the best choices rather than managing each project individually. This is also where Ford got into trouble pre-2008.

+1

 

My point is that it appears the market for such a truck is increasing. If it keeps up, Ford will need to take another look.