Truck wars: It’s mortal combat for Detroit 3
In an industry reckoning with technology-driven upheaval, Detroit keeps moving heavy metal.
The Detroit auto show is revolving around the crown jewels of the Motor City: beefy, American-muscle pickups. Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles NV premiered all-new pickups over the weekend, kicking off a high-stakes product stand-off that is almost unheard of at a single show.
“To have three pickup trucks from each of the Detroit Three — you might as well have a solar eclipse,” said David Sullivan, an automotive analyst with AutoPacific, an automotive marketing research and consulting firm.
It’s a stark difference from the news at the CES technology show in Las Vegas last week, when autonomous technology and electrified powertrains ruled the floor. The North American International Auto Show has always been about products, not promises.
And in reality, automakers will have to use the auto show to keep hyping up the trucks and SUVs car buyers are demanding right now.
These big trucks make big money for the Big Three, and fund the technology they’re developing to stay relevant in a rapidly changing industry. Full-size pickups had the second-fastest growth of any market segment in 2017, trailing only compact SUVs, according to Cox Automotive, a digital marketing firm that owns Kelley Blue Book and Autotrader.com. And the average transaction price on full-size trucks in December was roughly $47,500, compared to an average of $36,826 for all vehicles.
Detroit’s pickups are especially pricey. The average Ford F-Series pickup sold for $51,320 in December, according to Cox Automotive. That was topped by the GMC Sierra, going for about $53,170. The average transaction price for the Ram pickup was roughly $46,430 last month, and the average Chevrolet Silverado selling price was $42,340.
Full-size pickup sales accounted for about 14 percent of the market last year — the highest since 2005 — and the total market share for pickups was 16.4 percent, the highest in a decade, according to Edmunds.
“These pickups that are unveiled in Detroit will generate the revenue and the profit that will fund the future,” said Michelle Krebs, an automotive analyst for AutoTrader. “The dilemma for Detroit automakers is that unlike a Tesla or another Silicon Valley company, they can’t just raise money from hedge funds and venture capitalists. They need to generate most of the money they’re spending on the future out of what they’re selling now.”
And to make money on what they’re selling now, automakers also need to invest a significant amount of money into updating their lineups.
“Waymo doesn’t have a product portfolio to keep up-to-date,” Krebs said. “All it has to do is work on the product of the future.”
FCA’s top brass said the all-new 2019 Ram 1500 is one of the most crucial vehicles the automaker has ever launched. Photos and specs on the amped-up, “more masculine” full-size pickup were released very early Monday morning; wraps come off that truck at 9:05 a.m. at Cobo, wrapping up Detroit’s trio of pickup truck reveals.
The full-size Chevrolet Silverado, which is 450 pounds lighter while boasting the biggest truck bed in the segment, roared into the round at Eastern Market on Saturday night. Its reveal came on the heels of GM’s filing with the National Highway Traffic Safety Administration to put a car without a steering wheel or pedals on the road next year.
“It’s all part of the journey,” GM CEO Mary Barra said after the Silverado debuted Saturday.
Trucks “are very, very important, and we’re led by what customers need — what they want,” she said. “We’re also aggressively working on EVs specifically, but also fuel cells. So we’re continuing on that journey.”
Silverado’s show was followed by Ford’s legacy nameplate Ranger reveal Sunday, signaling the Blue Oval’s re-entry into the midsize pickup market. But the Ranger felt like more of a footnote on a presentation about Ford’s plans for the future of the automotive industry.
In addition to a new diesel option for the F-150 announced earlier this month, Ford also announced an upcoming hybrid F-150 after the Ranger reveal. That’s tied to the Dearborn-based automaker’s new $11 billion investment in electric vehicles. The Blue Oval also teased its performance EV coming in 2020, dubbed the Mach 1.
“Our heritage and our future are intertwined,” executive chairman Bill Ford Jr. said ahead of the flurry of Ford product reveals Sunday. “We were the original transportation disruptor. ... Every day we are proving the doubters wrong who said we couldn’t compete in the future. No one owns the future, it’s open for business and its waiting to be created.”
And all three of these trucks come with a big slate of trim options as the automakers attempt to lure every possible pickup buyer. It’s a necessary strategy for attracting the millennials who are “very much used to customization,” Kelley Blue Book analyst Rebecca Lindland said at Cox Automotive’s annual industry insights presentation ahead of NAIAS.
Sandor Piszar, Chevrolet’s director of marketing for trucks, sees rising transaction prices in the segment as “a reflection of those folks coming into marketplace looking for no compromise.”
“We’re delivering choice to our customers and their distinct personalities,” he said. “We want these trucks to have luxury of the car it’s parked next to in our customer’s driveway.”
The two-car driveway has been at the center of GM’s multi-truck strategy, with Chevrolet and GMC both offering mid-size alternatives to their hallmark full-size trucks. The Chevrolet Colorado and GMC Canyon are not quite as expensive as their bigger brothers, but their average transaction prices still hover around the industry average — and they’ve increased in price by nearly $700 in the last year, said GM.
Ford’s entry into the midsize truck market is proof of this truck-for-everyone approach, as the Blue Oval looks to lure more “lifestyle” truck buyers, despite the fact that the F-Series has been the top-selling vehicle in America since the Reagan administration.
“Ford cannot become complacent,” Sullivan said. “The minute they stop investing, slow down or think what they have is good enough is when the competition will sneak up on them.”
It’s not just money on the line when it comes to pickups in Detroit. It’s also a matter of honor for American’s home team.
“Detroit is standing its ground,” Sullivan said. “They watched their leadership shrink and shrink in midsize and full-size sedans years ago, even in other segments like minivans, but they won’t let go of their leadership in pickup trucks.”