Truck fight gets heavy-duty

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  1. CK5

    CK5 WhooHoo! Administrator Moderator

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    Truck fight gets heavy-duty

    Toyota, Nissan mull entering durable, domestic pickup arena

    January 27, 2005

    BY SARAH A. WEBSTER
    FREE PRESS BUSINESS WRITER

    The fight between domestic and Asian automakers over the pickup truck market might soon move into the heavyweight category -- potentially jeopardizing sales, profits and jobs in metro Detroit.

    Toyota Motor Corp. and Nissan Motor Co. are both exploring whether to expand their full-size pickup trucks into one of the last strongholds of Detroit's automakers: the heavy-duty segment of the pickup truck market.

    Heavy-duty pickups can carry and tow heavier loads than light-duty pickups. They are used primarily by commercial customers and are among the Detroit automakers' most profitable products.

    "They are the only players right now," Michael Robinet, vice president of the forecast firm CSM Worldwide Inc. in Farmington Hills, said of Detroit automakers.

    General Motors Corp. builds most of its heavy-duty pickups at its Flint Truck Assembly and at Pontiac Assembly Center, both in Michigan. Ford Motor Co. builds most of its heavy-duty pickup trucks at its Kentucky Truck Assembly in Louisville, and at Cuautitlan Assembly in Mexico. DaimlerChrysler AG's Chrysler Group builds its big Ram trucks at its St. Louis North Assembly Plant in Fenton, Mo.

    Those plants employ more than 15,000 U.S. workers and nearly 1,000 in Mexico.

    Ford was the first to bring more power and towing and payload capacity to the light pickup truck, creating and now dominating this category that is sometimes referred to as "heavy-light," Robinet says.

    The segment generally includes such vehicles such as the Ford F-250/350 Super Duty XL, the Dodge Ram 2500/3500 and GM's Chevrolet Silverado 1500HD and GMC Sierra 1500HD.

    Ford has averaged about 50 percent market share of the heavy-duty segment for the past five years, said Doug Scott, Ford division truck-group marketing manager. The Dearborn-based automaker sold 939,511 F-Series trucks last year, and about 40 percent of those were heavy-duty.

    In the past, heavy-duty pickups have been aimed at commercial buyers, often small businesses and independent contractors such as plumbers, electricians and carpenters. But the big powerful vehicles have been attracting more mainstream buyers in recent years.

    With prices on these heavy-duty pickups being relatively high -- the F-Series Super Duty series ranges in price from $23,375 to $39,580 -- they are also big profit centers for the U.S. automakers.

    GM spokeswoman Sharon Basel said about 34 percent of the 975,090 pickup trucks GM sold last year were in the heavy-duty segment. And those sales, she added, were very profitable.

    That's something Japanese competitors have surely noted and seen as a growth opportunity.

    With Toyota and Nissan pushing into the full-size pickup truck market in recent years with their Tundra and Titan, it was only a matter of time before they started beefing those vehicles up with more power and towing and payload capability to sell them as heavy-duty vehicles.

    Honda Motor Corp. will enter the pickup truck market for the first time this year with the Ridgeline, a midsize pickup that goes on sale in March. It is unclear if or when Honda might enter the bigger end of the full-size pickup-truck market.

    Dan Sieger, a Toyota spokesman, said the company has been considering the move into the heavy-duty segment for a long time. While no final decision has been made, he noted, "Texas would be a likely and logical choice" to assemble such a vehicle.

    Toyota is building a truck assembly plant in San Antonio that will open in 2006. Right now, the planned capacity of the plant is 150,000 vehicles a year. The Tundra is the only vehicle Toyota has announced would be built there, but industry experts considered it likely that other vehicles would also be assembled there. Toyota, renowned for its efficiency, builds an average of three different models at each of its plants.

    A senior Toyota official who did not want to be named said the company is considering adding a separate line for the heavy-duty Tundra.

    "You don't do this if you're not going to be a player in the full line," he said. "You don't play slow pitch against the Yankees."

    Kyle Bazemore, a spokesman for Nissan, also acknowledged the automaker is exploring the option of beefing up its Titan pickup into the heavy-duty segment. Auto critics say Nissan's Titan has been slow to catch on, with sales of 83,848 last year. But Bazemore said the pickup will safely hit its annual target of 100,000 in March, the end of Nissan's fiscal year.

    GM and Ford said they are well situated to ward off competitors like Toyota and Nissan in the heavy-duty pickup truck segment.

    "From our perspective, we expected Toyota in the heavy-duty segment a lot earlier," GM's Basel said.

    Officials at domestic auto companies repeatedly noted that customers in the heavy-duty segment tend to be more demanding and loyal than other buyers, and that will benefit domestic automakers.

    "The heavy-duty buyer is the most loyal buyer in the market," said Joe Veltri, director of Dodge Truck marketing and product planning. "The person who buys the heavy duty buys it for a very specific reason. They have the need to tow and haul."

    GM's Basel agreed. "They have very specific needs."

    Because of that, there is a great deal of complexity in this end of the pickup market, with a variety of cab styles, bed lengths, and towing and payload options.

    One important options is a diesel engine, which offers good fuel economy and towing power. "If you don't have a diesel, you don't have a way to make inroads," Basel said.

    So far, it's unclear if Toyota or Nissan plans to offer diesels in any heavy-duty pickup truck it might sell. But Toyota, which likes to tightly control the quality of its vehicles, has been more inclined in the past to build its own engines, rather than rely on suppliers.

    Contact SARAH A. WEBSTER at 313-222-5394 or swebster@freepress.com. Automotive reporter Mark Phelan contributed to this report.
     
  2. RJF's Red Cummins

    RJF's Red Cummins TRC Staff Moderator

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    I'm glad they made that clear.... :D

    I would bet that any Tundra or Titan beefed up will still not be any kind of contender. I'd be suprised if they even had 8 studs holding the rims on. I would also guess that any diesel option probably wouldn't be able to touch the PS, DM, or ISB.

    Like they were saying in the article, "HD buyers are the most loyal out of all the catagories" and I have a hard time seeing the asian companies convincing very many owners of big three HD trucks to buy a yota...
     

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