Small Trucks: Efforts to Resuscitate a Nearly Dead Segment
February 06, 2008

By Kate McLeod

The small-truck market is disappearing, but it appears some automakers are at least giving some thought to trying to resuscitate it by reinventing it.

“It’s pretty bleak,” said Jessica Caldwell, Edmunds.com’s manager of pricing and industry analysis, of small truck sales of late. “They may be even worse than minivan sales.”

Still, with small cars making a comeback due to high gas prices, automakers such as General Motors, Toyota and Ford think the small-truck segment could be brought back to life as well.

A Nearly Dead Segment

Sales of small pickup trucks have been in decline for years. Between 2002 and 2007 -- a scant six years ago -- they've plummeted from 857,000 to 496,000 a year, according to Edmunds.com’s analysis. But even before that, small-truck sales were in serious decline.

Automakers tried to sustain volume in 2003 and 2004 with incentives, but gave up the past few years and just let volume collapse. "Toyota Tacoma saw modest success but even that is marginal. The rest are an embarrassment,” noted Edmunds' Caldwell.

Last year, sales of compact trucks fell again -- down roughly 97,000 from 594,000 the year before, according to Edmunds.com. By comparison, sales of full-size pickups ran more than 2 million last year and were down a little more than 3 percent.

Ford’s Ranger small pickup, which used to be the leader with more than 400,000 sales in a year, has sunk to third place with only 72,000 sold in 2007, down from 2006's 92,420 and far below 272,460 in 2001.

The GM twins, the Chevrolet Colorado and GMC Canyon, didn’t fare much better. They closed sales with 96,604 sold in 2007, from 117,855 in 2006. That compares to 2001 sales of 193,006 GM small cars, then known as the Chevy S-10 and GMC Jimmy, which were replaced by the Colorado and Canyon respectively in 2004.

Toyota’s Tacoma has taken over small-truck leadership with far less than the Ford Ranger sold when it was the leader. Toyota sold 173,238 Tacomas in 2007, down from 178,351 in 2006 but up from 161,983 in 2001.

Source: Edmunds.com

Small Trucks Lose to Big Trucks

So what happened? Detroit sacrificed the small pickups deliberately to sell more big pickups.

Ford, as it did with the previous Taurus, allowed the once-leading Ranger to die on the vine with no substantial changes in 14 years or so. Instead, Ford execs admit the company deliberately decided to emphasize its bigger and more profitable F-150 models.

GM largely did the same. However, it did replace the Chevy S-10 and GMC Jimmy with the Colorado and Canyon, respectively. But it blew it -- the trucks were dull and underpowered, offering a five-cylinder but no six-cylinder engine, a disastrous error.

Toyota duplicated this sacrificial strategy in 2007, with the Tacoma losing out to the all-new Tundra.

Further complicating the truck picture is pricing. Customers can buy bigger pickups -- Chevy Silverados or Ford F-150s or Dodge Rams -- at almost the same price. The workhorse models have base prices that aren’t much more than those of small trucks.

In addition, incentives on full-size trucks were the industry’s heftiest in 2007 as automakers tried to maintain truck sales, hard hit by the slumping housing and construction businesses. The added competition from the new Toyota Tundra compounded the situation. Rebates ranged from $3,000 to more than $6,000 in 2007.

So add in some cash rebates and low-interest financing on full-size trucks and -- for not much more in monthly payments -- the customer gets more truck for the buck when deciding between small and large.

The Question Starting to be Asked; Solutions Explored

So here’s the question: As gas prices have soared and buyers are thinking fuel economy -- as evidenced by the downsizing to small cars and small engines -- why aren’t small trucks selling better? Can the small-truck market be saved?

At last some automakers are thinking about it.

At this week's Chicago auto show, GMC is unveiling a concept vehicle called the  Denali XT, a hybrid sport-utility truck built on the rear-drive platform of the upcoming 2009 Camaro, which is shared with this year's Pontiac G8.

A month earlier at the Detroit auto show, Toyota introduced a similar-looking concept small truck. Called the A-BAT, (short for Advanced Breakthrough Aerodynamic Truck), the concept is smaller than the Tacoma and would cost less, too, Toyota asserts. It looks more recreational than workhorse, something like a smaller Honda Ridegeline, and like the Honda, is built on a on a car platform, not a traditional truck frame.

Toyota presented A-BAT as a recreational vehicle hauling bicycles, ATVs and camping gear for today’s restless youth. The automaker hasn’t promised to build it but seems serious about the concept.

Ford insiders say the automaker plans a replacement for the Ranger within the next couple of years that is more mainstream than the niche Toyota and GMC concepts. In the meantime, Ford tried last month to reignite small-truck sales the old-fashioned way -- with incentives. And with some success. In January, Ford put incentives on its long-neglected small Ranger pickup. And sales increased 19.2 percent, while the rest of the truck market saw sales decline.

During the monthly sales conference call with media and analysts a reporter from Minnesota, where Ford builds the Ranger, asked George Pipas, Ford’s head of sales analysis, when the Ranger had last seen sales increase. Pipas quipped: “Let’s see, what year did I join Ford?!” (That was 1976; without diving into the history books, he couldn’t say the last time Ranger showed a sales increase.)

Ford had planned to close its sole Ranger plant in Minnesota this spring, but gave it a reprieve. What’s next for the plant and the small truck is unclear. But Ford apparently has a plan, insiders say.

Rebadging Continues

At the Chicago auto show this week, more truck rebadging occurs. Suzuki unveils the Equator, a rebadged Nissan Frontier. Nissan likely hopes that between the two models, it can sop up some of the excess truck capacity it has at its Tennessee plant.

But re-badging hasn't been a winning formula for others: the forgettable Mazda B-Series is a rebadged Ford Ranger; the Mitsubishi Raider is a Dodge Dakota underneath.

Is Reinvention the Answer for Small Trucks?

The introductions of the GMC Denali XT and Toyota A-BAT -- and Ford's rumored reinvention of the Ranger -- signal a new direction for small trucks may be in the offing.

GMC touts the Denali XT's advanced powertrain -- a new, 326-horsepower direct-injection 4.9-liter V8 that runs on gasoline or E85 ethanol; features cylinder deactivation; and is mated to GM's 2 Mode hybrid system, which enables it to run on pure electricity at low speeds.

The four-door Denali XT features unibody construction, a lighter and more fuel-efficient alternative to conventional body-on-frame truck designs. The concept, like the Camaro, was designed and engineered by GM’s Holden subsidiary in Australia.

The Denali XT rides on an ample 123.4-inch wheelbase, with a 55-inch bed and seating for four. A removable "midgate" and fold-flat rear seats extend the vehicle's cargo-carrying capability. GMC says the truck has a payload capacity of 1,100 pounds and a towing capacity of 3,500 pounds. The concept rides on 23-inch wheels and custom Kumho tires.

Because it sits on a variation of the Camaro's Zeta platform, the Denali XT would also have good ride and handling characteristics, with all-independent suspension, including a multilink setup in front and a four-link rear with coil-over shocks and a decoupled stabilizer bar.

The concept-like cabin has "floating" gauges, an oversize interface screen, billet-metal trim and custom seats trimmed in saddle leather.

The four-passenger A-BAT, designed by Toyota’s CALTY studio, is built on a carlike unibody frame. It has a 4-foot bed, shorter than a standard pickup's. Four extra feet can be created when needed by folding down the midgate and opening the tailgate. The A-BAT concept is loaded with utility features that have increased the popularity of full-size trucks beyond their traditional boundaries of workhorses. The A-BAT has plenty of cargo storage and is equipped with a portable power pack that offers both AC and DC for powering tools, electrical gear while camping, laptops and small appliances.

Even the exterior design of the truck is different, leaving the box behind for a hipper trapezoidal profile with fast-angle A- and C-pillars, shortened overhangs and a sleek windshield. CALTY designers were inspired by a NATO military all-terrain truck, which keeps occupants far forward in order to maximize bed capacity.

The vehicle’s green character features lightweight (read: expensive) carbon-fiber and aluminum interior materials, hybrid technology and solar panels in the top surface that charge the navigation unit, portable power pack and backlit information displays. The fancy trimmings aren’t as important as whether or not there’s really a market.

That A-BAT is directed to the Internet savvy is unmistakable: Wi-Fi, a port for synchronizing music and a hard drive for music are part of the concept.

Baja Bound? Questions Abound

Will the GM and Toyota reinventions work? GM has been down this road with the quirky Chevrolet SSR, discountinued after only a couple of years. Subaru tried a similar approach with a vehicle called the Baja. Flop City. The Honda Ridgeline was supposed to reinvent the truck segment. Instead, the incentive-allergic Honda has been forced to slap hefty rebates on the Ridgeline to keep it alive. Ford’s truck-based Explorer Sport Trac hasn't been a roaring success either.

Can automakers build small truck cheaply enough to compete with their own base-model full-size trucks? Is there a market waiting for products like the A-BAT and the Denali XT?

At least someone is beginning to ask the questions.

Kate McLeod is a New York-based correspondent.

Michelle Krebs contributed to this story.

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