GM, Toyota Ready to Battle for Compact-Pickup Buyers

DETROIT (Detroit Free Press/MCT) -

General Motors Co. has chosen to go bumper-to-bumper with Toyota Motor Corp., for what’s left of a compact pickup market Ford Motor Co. and Chrysler Group LLC have abandoned for the fatter profits of more massive trucks.

Ford no longer makes its Ranger for North America, and Chrysler’s Ram brand has shelved plans for a successor to the Dakota.

“I can’t believe it. It’s wild. I’m loving it,” said Mark Reuss, GM North America president, with the excitement of a linebacker who just scooped up a fumble and is  end- zone-bound.

Unlike full-size trucks, of which Americans will buy about 1.9 million this year, compact pickups are almost a niche market, on pace to sell about 225,000 this year.

Dominating the market is the Toyota Tacoma, which has sold 146,724 through November. “We have this diamond – a 150,000-unit annually pickup truck,” and it sells with zero incentives, said Bob Carter, Toyota senior vice president of automotive operations. “Our business hasn’t declined. It’s just that (nearly) everybody has pulled out.”

The closest competitor is the Nissan Frontier, with less than 58,000 U.S. sales this year through November. Honda has sold 16,160 Ridgelines.

“The question is whether the segment will continue to be squeezed out by the advances in full-size trucks,” said Reid Bigland, head of Ram trucks. “Or is it a major growth segment?”

Chrysler, so far, is betting the segment will shrink. But Jeep chief Mike Manley would love to see the return of a Jeep pickup.

“Jeep has a history of pickups. I’m a fan of a pickup,” Manley said. “It’s something a number of people would like to see.”

But not enough for Chrysler’s top management to approve a program.

Ford sells the Ranger everywhere but North America. Joe Hinrichs, Ford president of the Americas, said Ford is not re-evaluating its decision to stop selling the Ranger in the U.S.

“With our fuel-efficient F-150, we can meet demand,” he said. “We think our strategy is working.”

GM sees an opportunity. Reuss recognizes the risk, but is betting a new product will stimulate interest and sales.

GM unveiled a new Chevrolet Colorado last month at the Los Angeles auto show. Sometime in the next year or so, it likely will add a ZR2 off-road version. Reuss said there is a lot of opportunity for special editions and accessories.

The GMC Canyon, which has not been revealed yet, looks more like a full-size truck, Reuss said.

Pricing of the small trucks’ top trim levels will overlap with entry-level full-size trucks. But Reuss said the small truck buyer appreciates its smaller dimensions and  the experience of  driving something almost 1,000 pounds lighter than a Chevy Silverado.

Making a smaller, lighter and more fuel-efficient truck also helps GM bring down its corporate average fuel economy to meet regulations on the horizon, Reuss said.

Toyota welcomes the competition.

“I actually believe that the Colorado creates more Tacoma business,” Carter said. “I really think some energy into the market is going to help.”

The Tacoma was refreshed last year.

“I would rather be a little smaller share of a growing segment than a big fat share of a declining segment,” said Bill Fay, Toyota division general manager.

Chrysler executives beg to differ.

“The vision of a small pickup is easy to understand from a consumer point of view. It’s just hard to execute, given how competitive full-size pickups have become,” Bigland said.

Resources will focus instead on the full-size Ram lineup.

Bigland said the dilemma is that to make a small truck distinctive, it would need to be priced below $20,000 and get more than 30 mpg.

“When we have half-ton trucks that can get 27 miles to the gallon, and be had for the low $20,000s, we are struggling with where that would fit,” Bigland said. “We need to make sure we’re investing in the places where we’re going to get the best return.”