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Sunday, 04 February 2018 01:05

Keep truckin’: Pickups take center stage as automakers gear up for new ‘truck war’

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Ford plans to re-enter the midsize pickup market for the first time since 2011. The new Ranger features just one four-cylinder powertrain. Unlike the full-size F-150, the Ranger will feature a steel body. Ford plans to re-enter the midsize pickup market for the first time since 2011. The new Ranger features just one four-cylinder powertrain. Unlike the full-size F-150, the Ranger will feature a steel body. Courtesy Photo

DETROIT — As two of the top three best-selling vehicles get a makeover this year, the 2018 North American International Auto Show once again seemed devoted to the ultimate American lifestyle automobile: the pickup truck. 

With both Chevrolet and Ram debuting fully redesigned light-duty pickups — and with Ford re-entering the U.S. midsize market for the first time since 2011 — industry watchers say the Detroit Three appear poised for an old-fashioned battle of the brands.

Almost certainly, the 2018 Detroit auto show planted the seeds for what automotive analyst Mike Wall describes as an all-out “truck war.”

That battle for sales comes as the market for light-duty trucks and other high-riding crossovers and SUVs continues to gain steam while the passenger car segment softens. 

“Consumers are voting with their dollars,” said Wall, director of automotive analysis at IHS Markit in Grand Rapids. “The car dislocation is pretty well in hand and we do expect it to continue for a little while yet. We don’t see the cars going away per se, but it’s evolving into a new reality.”

As such, automakers — and the Detroit Three in particular — are serving up new truck options to meet customers’ demands. In the coming year, the best-selling Ford F-Series will be going up against redesigned Silverado/Sierra trucks from General Motors and the new Ram 1500, which caught Wall’s attention for its interior design.

“I was vastly impressed by the Ram 1500,” he said. “The interior on that Ram 1500 is very, very strong. It’s well done, well executed.”

In particular, Wall cited the Ram’s 12-inch Uconnect touchscreen in the center stack, which reminded him of the display in a Tesla Model S. 

With the new model, Ram moved away from the big rig look for a more conservative exterior design. Underneath the sheet metal, the company shaved 225 pounds from the previous truck, as well as added a hybrid eTorque system with a 48-volt battery pack that enables the company to offer start/stop function, short-term torque assist and regenerative braking.

However, it’s Ram’s production strategy that has Wall believing that a truck war is imminent. The reason: Parent company Fiat Chrysler Automobiles has committed to building the current model and the new Ram 1500s simultaneously for about two years. 

“The million dollar question is, is the pickup truck market able to absorb that and really grow the overall pool, or are we going to have maybe more market share shifting?” Wall said. 

Wall expects to see a combination of both, where “you are going to see really all three of the Detroit Three really have to maintain engagement on the incentive side, and, frankly, they’ve got more margin to work with to do that, but it is going to be a bit of a battle this year.”

LIKE A ROCK

General Motors took lightweighting even further by cutting about 450 pounds from the current generation of its Silverado for the redesigned 2019 model. For the truck, GM adopted a mixed-materials strategy that includes using aluminum in the hood, doors and tailgate, and steel in the frame and bed, which features deep-draw sides allowing for more usable space. 

Additionally, the Silverado can be optioned with six engine/transmission combinations, including an all-new 3-liter inline-six Duramax diesel and a 10-speed automatic transmission — marking the first time in a generation that all three Detroit automakers have offered a diesel in their light-duty pickups. 

GM’s North American President Alan Batey said the Silverado is “arguably the most important product in the Chevrolet portfolio.” Additionally, the company also is doubling down on the Silverado nameplate with a new medium-duty model that will launch in March at the NTEA Work Truck Show in Indianapolis.

MIDSIZE ENTRY

For its part, Ford looks to cash in on the midsize truck market with the launch of the 2019 Ranger pickup, the first time since 2011 that the company has offered that nameplate in North America, despite selling it globally.

“Other companies have been dabbling (in the midsize truck market), but we’re jumping back into the midsize segment from a different vantage point,” Raj Nair, Ford’s president of North America, told press at a media preview event that was archived online. “Since the Ranger went on sale in 2011, it’s become the best-selling midsize pickup in Europe, South Africa and New Zealand, and Ranger sales have grown from No. 5 to No. 2 globally without even offering it in the world’s largest truck market. And now, the time is right to bring it here.”

In size, the Ranger undercuts GM’s Colorado and Canyon models and the Toyota Tacoma, while offering limited options and just one four-cylinder powertrain. Unlike the F-150, Ford used mostly steel in the Ranger’s body. 

For Wall, the arrival of the Ranger wasn’t “earth-shattering” but he thinks that’s by design so the company doesn’t cannibalize sales from the market-leading F-150.

“Ford doesn’t want to rock the boat on the F-Series,” Wall said. “That’s the golden goose, so I don’t really blame them.”

However, Wall questions whether Ford will be able to recapture its past successes in the midsize market, which peaked more than three decades ago and has failed to top 1 million units since 2000, according to a report in Automotive News

TRUCKS BENEFIT SUPPLIERS 

While the midsize truck segment may have floundered, the overall light-duty truck market for pickups, crossovers and SUVs has formed what Wall described as “a new reality” for the automotive industry. 

These days, consumer tastes are “gravitating toward the higher ride height vehicles and demanding more flexibility,” Wall said. OEMs have responded by hitting the market with “more product that fits that bill” — maybe even too much product, he added.

“Five, six, seven years ago, there was really no such thing as a sub-compact crossover utility vehicle,” he said. “Now, you’ve got the Buick Encore, Chevy Trax, Jeep Renegade and soon-to-be Ford EcoSport out there. … We’re almost getting over-proliferated. We’ve got a pretty full-fledged lineup from sub-compact and tiny all the way up to the big utes.”

This year, Wall projects truck sales to reach 11.1 million units, almost double the volume projection for passenger cars and two-thirds of the overall 2018 light vehicle sales.

IHS Markit forecasts a second year in a row of declining sales in 2018, with an estimated 16.9 million units for North America. That’s down about 2 percent from 2017 and nearly 4 percent from the record of 17.6 million units in 2016. 

Still, given the market mix and the emphasis on higher-margin trucks, Wall said West Michigan-based automotive suppliers should be well-positioned to weather the plateauing sales environment. Most already made the switch over to supplying truck platforms as the market for passenger cars softened, which should cushion the blow of sales declines, he said. 

“When you talk to suppliers … the fact that the truck side has performed so well, that has been able to offset maybe some of that car weakness,” Wall said. “In general, these truck parts tend to carry a higher margin, tend to be a little bit more robust. (Suppliers) are obviously aligned toward more profitable vehicles. A Ford F-150 carries a heck of a lot more profit than a Ford Focus.”

GROUNDED APPROACH

At NAIAS, Michael Manley, head of the Ram brand at FCA, said it’s a competitive market for automakers to make a “capable product” and to “build trucks to serve” customers.

“When we launched the Ram brand back in 2009, it was done with a clear purpose,” Manley said. “It was not to walk away from our heritage as a truck manufacturer. You know, we’ve been manufacturing trucks for more than 100 years, and that is something we celebrate and carry forward with us.” 

For Wall, the truck-heavy NAIAS provided an interesting foil to other recent automotive industry gatherings like the Consumer Electronics Show in Las Vegas earlier this year. 

“I was really impressed by the truck offerings that were shown,” Wall said of NAIAS. “We’ve been likening it to just a big truck event, which is ironic. It was almost the polar opposite to CES.”

Unlike CES, with its talk of autonomous vehicles and other far-flung technologies, the Detroit auto show offered “more of a conventional … real world (outlook),” Wall said. 

“These are vehicles literally you’re going to see in showrooms this year,” he said. 

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