Tuesday, June 30, 2015

Will Pickup Options Become More Diverse



Truckmakers have a lot to be encouraged about when looking at current sales data. Even Ford is quite positive about its truck sales, even though it just experienced its first monthly drop near the 10 percent range in several years. Even though Ford recently brought all three of its full-size pickup truck production plants (for the F-150 and Super Duty) fully online it's still lagging in monthly sales. All three plants are running at maximum capacity to meet demand. There's no doubt that as Ford fills the pipeline and fixes a few minor supplier issues, those monthly anomalies will cease.

The sales strength of the pickup segment has several other automakers looking at offering a new pickup to help increase market share and sales. Electric carmaker Tesla is among them; it plans to enter the SUV market later this year with the Tesla Model X and it has expressed interest in offering a pickup.

Tesla CEO Elon Musk noted in 2013 that he wanted to build an all-electric F-150-like vehicle in Texas to fill out his product portfolio. At the time, he said he wanted it built in about five years, which means as early as 2018, just two model years away. Unfortunately, the state of Texas is not making it easy for him to sell his vehicles directly to consumers — something that most states don't allow in order to protect the rights of franchise dealerships. Musk is pushing back, hinting that he might not locate his Tesla pickup truck plant in Texas. Really? At this point, if Musk has not yet decided where to build his production plant it's unlikely that the electric pickup, which we guess will cost between $50,000 and $75,000, will be ready in 2018.

Regardless what year we get it, the Tesla electric pickup would bring high-tech diversity to the segment and offer the potential to improve weight and range issues (especially in cold weather or when towing a trailer). We love the idea of having a huge, lockable storage trunk under the hood (no engine would be required) and still having a full-size bed for cargo. But would enough people spend that kind of money for an electric pickup when fuel prices are still so reasonable, especially when a diesel engine in a half-ton with a moderately size tank will get you a range of 600+ miles between fill-ups?

Two other obvious players ready to offer more options in the pickup marketplace are Ram and Jeep. Both are owned by Fiat Chrysler Automobiles and both have strong leaders. But if Ram wants to get back into the midsize game — something Ram CEO Bob Hegbloom has repeatedly resisted — it's more likely to be done with a global partner that already has a vehicle, production plants and a good understanding of what a truck like this should be. FCA CEO Sergio Marchionne (Hegbloom's boss) is reportedly shopping for a partner to help build global efficiencies to ensure cost savings. So if Ram Truck wanted to beef up its truck portfolio it would make sense to do what the Ram Commercial did with van offerings like the Ram ProMaster and ProMaster City. Both products were based off existing global Fiat Commercial platforms. But don't expect Ram to make something like that happen quickly. At a minimum, it sounds like a three- to five-year process.

The Jeep pickup issue is a little more complicated. Big automakers traditionally have thought that the best way to increase a brand's profits is to expand into markets where their product do not exist rather than making incremental improvements on existing products. That's quite expensive unless you can find a way to share a platform and squeeze more vehicles per hour from a given plant, which is more cost effective. Jeep recently used a global Fiat platform to create the Renegade, specifically designed to target the Chinese market. Anonymous sources have suggested it's possible the Renegade could sell in the hundreds of thousands of units per year. At the other end of the spectrum, Jeep also recently decided to create a Grand Cherokee-based luxury high-end competitor to go up against Land Rover Range Rover and cash in on the growing number of people who are willing to spend $100,000 for an SUV. So where does that leave a Jeep pickup truck? The answer is simple — pretty low on the priority list. The segment just doesn't support the idea of more midsize players, even if they have a clear-cut personality like a Jeep pickup could offer, and especially when FCA already offers Ram pickups.

There's no question that pickup sales are strong — and they are likely to stay strong barring any unforeseen global issues — but don't expect to see many automakers jumping into the midsize or full-size pickup segments. Sure, we'll get the occasional "lifestyle" pickup like the Hyundai Santa Cruz concept. Hyundai has nothing to lose from creating such a pickup. But experiments like that have not done well in the past and aren't likely to in the future unless they can do something big and daring with extra capability, unique powertrains or exceptional problem-solving features.

In a nutshell, if an automaker wants to be popular in this mature and relatively jaded segment, it must be able to offer something nobody else — meaning customers and competitors — has seen before. Whether that's Tesla, Hyundai or Google, we'll just have to wait and see.



Cars.com images by Mark Williams

Source: http://news.pickuptrucks.com/2015/06/will-pickup-truck-offerings-become-more-diverse.html

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