Heavy-duty truck rivalries pick up steam

Ian Thibodeau
The Detroit News
2019 Ram Power Wagon

Detroit's Big Three all premiered heavy-duty pickups in the past few weeks, marking the next round of a bruising battle for bigger shares of the most coveted and most profitable vehicle segment in the country.

The timing is no accident. Ford Motor Co.'s all-new Super Duty will go on sale by the end of the year. Fiat Chrysler Automobiles' next-generation Ram 2500 and 3500 heavy-duty trucks arrive this summer, and General Motors Co.'s redesigned Chevrolet Silverado and GMC Sierra Heavy Duty pickups will hit the market about the same time. All of these hulking behemoths are looking for advantage and big payoffs.

"They are a critical part of the market," said Michelle Krebs, industry analyst with Autotrader. "They bring big profits. The companies are focused heavily on beefing up the bottom line."

The Ford F-250 King Ranch Super Duty pickup truck

Management and investors are counting on the heavy metal to fund large portions of the bets all three automakers are placing on electrification, autonomous vehicles and mobility, industry analysts say. The automakers already are scrapping in all parts of the North American pickup market. 

After an eight-year hiatus, Ford in January revived its midsize Ranger to compete against GM's Chevy Colorado and GMC Canyon, the Toyota Tacoma and, eventually, the new Jeep Gladiator. Ford is planning a unibody pickup that's even smaller than the Ranger.

GM President Mark Reuss used Tuesday's official introduction in Flint of the 2020 Silverado Heavy Duty to remind anyone within earshot that Ford was late to a midsize truck market it dominated not so long ago.

"Welcome to the party," he quipped. "You're only five years late and half a million trucks behind."

Chevrolet unveils the full lineup of its 2020 Silverado Heavy Duty Tuesday, February 5, 2019 at General Motors Flint Assembly where the trucks will be built in Flint, Michigan. The longer, wider and taller Silverado HD features a new 6.6L V-8 gas engine with direct injection mated to a six-speed automatic transmission.

Fiat Chrysler's popular all-new Ram 1500 light-duty truck helped that automaker's pickup sales grow 15 percent last year. GM's new light-duty Silverado and Sierra, which went on sale later in the year, didn't bring a 2018 sales gain for the automaker. GM recently started its marketing campaigns for the two light-duty trucks, including a massive multi-platform campaign for the Silverado.

Ford? It stayed ahead of the pack with its sales numbers for the F-Series, perennially America's best-selling truck brand.

Morgan Stanley's Adam Jonas predicts 2019 could be a tougher fight. Sales are slowing, and industry headwinds coming from trade tensions and tariffs on steel and aluminum already are cutting into profits.

Automakers spent the last few years pruning sedans and small passenger cars from their U.S. lineups in favor of larger and more expensive vehicles. In 2017, for example, Ford boasted of a nearly $100,000 F-450 pickup. Executives and marketing specialists at all three companies have repeated over the last few years that the trucks squeeze into the luxury segment when price is the basis.

Companies sold a record number of vehicles for years, and that could come back to bite them as shoppers find deals on used vehicles this year. Jonas expects automakers might have to increase incentive spending to help move new pickups off dealer lots.

The Ford F-450 Limited Super Duty pickup truck

"As key foreign markets decelerate, we expect the U.S. to become a more competitive battleground for already-stretched auto consumers," he wrote in an note to investors. "As U.S. auto growth slows, we're prepared for pricing pressure, a potential blind spot in consensus forecasts."

Ford's North American business could battle a $800 million obstacle in 2019 due to such cost challenges as incentive spending on new vehicles, he estimated. For GM, that number could reach $1.1 billion.

Automakers haven't said what their big new trucks will cost, but heavy-duty pickups are some of the most expensive in their lineups. And they don't all go to fleets. Ford said 60 percent of its Super Duty sales are to retail customers. The 40 percent that go to commercial customers are crucial, said Kumar Galhotra, Ford's president of North America, adding that Ford's commercial truck and van business could stand alone as a Fortune 40 company.

Ram 2500 Power Wagon

GM and Fiat Chrysler mirror that with the heavy-duty commercial business. Reduced profits from those vehicles could be especially painful for Ford and GM as those companies execute global restructurings and cost-cutting plans to ready the companies for what's expected the be an expensive, technology-fueled automotive industry.

"They're preparing for what many think will be a different kind of future," Krebs said. "They've got to continue investing in this transformative future. And they've got to focus on profitable vehicle sales. These trucks are obviously huge parts of that."


Twitter: @Ian_Thibodeau

Detroit News Staff Writer Nora Naughton contributed.