Cain's Segments, June 2014: Small And Mid-Size Pickup Trucks

by Timothy Cain

Published: July 17th, 2014

cain s segments june 2014 small and mid size pickup trucks

Small and midsize pickup trucks accounted for 10.6% of the new pickups sold in the United States in June 2014 as their collective volume slid 9.3%.

Overall pickup truck sales slid 5.1%. Sales of the core set of six full-size trucks fell 3.5%.

One year ago, in June 2013, this group of non-full-size trucks generated 11.1% of the pickup truck volume.

During the first half of 2014, sales of these smaller pickup trucks were down 3.9%, a loss of 4806 units, as sales of the Ford F-Series-led full-size group jumped 4.3% and the overall pickup sector grew at a 2% clip.

Excluding the three parts of this small/midsize category – Colorado, Canyon, Equator – that have either disappeared or were in the throes of a long hiatus one year ago results in a 0.4% year-over-year decline over the first half of 2014. The Nissan Frontier’s meaningful gains were offset by the Tacoma’s 7.4% loss and the Honda Ridgeline’s 12% decrease.

How is the Tacoma’s decline explained? For starters, remember that Tacoma sales through the first half of 2013 had risen very nicely with a 21% jump compared to the first half of 2012. Tacoma sales in 2013 reached a six-year high. At the current pace, 2014 Tacoma sales will be higher than they’ve been at any point since 2007, that is, if we ignore last year’s results.

But Cars.com’s inventory results for the Tundra and Tacoma show twice as many available Tundras as there are Tacomas. We know that the biggest difficulty for small and midsize trucks right now is the pricing proximity with their full-size siblings. The updated Tundra has produced a 12.5% boost in volume so far this year. In fact, the Tundra has joined the Ram in stealing market share, a little bit of market share, from Ford and General Motors in the full-size sector.

There’s your segue. These figures are meant to set a baseline before the new Colorado and Canyon arrive. The smaller pickup trucks that stuck around after the Dakota and Ranger departed and after the Colorado and Canyon temporarily vacated the premises have not truly taken advantage of the gaps in the market.

But will the Colorado and Canyon be able to fill those gaps? Will they be priced competitively, not with the Tacoma and Frontier, but with the Silverado and Sierra? Will the fuel efficiency benefit be so significant that owners will actually notice the difference compared with their neighbour’s full-size pickup?

If the answers to the latter two questions are negative, the answer to the first question will be, as well.

AutoJune2014June2013%Change6 mos.20146 mos.2013%ChangeToyota Tacoma12,17314,023-13.2%75,14981,188-7.4%Nissan Frontier5,7225,413+5.7%35,94329,316+22.6%Honda Ridgeline1,3091,572-16.7%7,9069,020-12.4%Chevrolet Colorado51155-67.1%733,034-97.6%GMC Canyon364-95.3%5876-99.4%Suzuki Equator————448-100%—— —————Total 19,25821,227 -9.3% 119,076 123,882 -3.9%

#Cain'sSegments #PickupTrucks #Trucks

Timothy Cain

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12 of 34 comments

Lou_BC on Jul 17, 2014

I do think the chicken tax is a factor BUT before DiM chimes in, so are other factors like lack of small truck R&D, a US preference for supersizeme coupled with a preference for cheap vehicles with big V8's. One can add EPA footprint based rules to the equation. I don't think that a "true" small truck will be much more than a niche player. Even the global small trucks have gotten bigger. Proponents on both sides of the debate like to focus only on one or two issues and do not look at the big picture. What is the big picture? As I have pointed out, we have a consumer preference for big vehicles with big engines. Car companies have profited for decades with pickups because traditionally safety and environmental rules were more lax. As rules toughened that consumer preference was well solidified and due to huge profits in large pickups, companies had a ton of motivation to put R&D into them to stay competitive. Adding doors to pickups was the stroke of genius that solidified pickups as the replacement for the 60's land yachts. Some car companies have stated point blank that they will not introduce small trucks because they will chip in to golden goose sales. The 800 lb gorilla that DiM downplays is the fact that trade barriers keep out any economical alternatives. The operative word is ECONOMICAL. If profit margins are tighter in a small truck then a 25% tariff kills any hope of profit just like any creative ways to circumvent them. The "they can build in Mexico" argument also is a wash considering the cost of building a new factory. VW already said that they'd need to sell 100,000 a year to make it worth while. Car companies will not change too much as long as profits keep rolling in from their golden goose line-up. I do think that car companies do have "Plan B" contingencies. Spy photo's have recently appeared of what is most likely a highly camouflaged Fiat Strada. A while back spy photo's popped up of the global Ranger being tested. Ford is an active proponent of an FTA with the EU. Anyone wonder why? They've said that it would make niche marketing more easy for them. What constitutes niche markets for Ford? Marketing the Mustang in the EU and the Ranger in the US. Until we see the elimination of the chicken tax,and the homogenization of emission and safety rules this whole debate will remain more of a "he said she said" argument despite the fact that there are studies proving that trade barriers do shape the automotive landscape. As long as people feel they might occasionally need the capabilities of a 20 ft long V8 powered truck they will sell and sell well. The Ecoboost is proof that V8 lust is waning. The Ram 1500 lineup and its steady gains in the marketplace is also proof that people want a car like ride even if it means less true truck cargo capacity. As the article has pointed out, we are seeing a contracture of truck sales. Is this proof that the pickup truck bubble is about to burst like other unsustainable bubbles built more on wants as opposed to real need?

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- Vulpine on Jul 17, 2014
  
  D|M beat you to it, Lou. Ah well. I do have to agree with what you say; the typical American pickup driver thinks "bigger is better" and the two rounds of CAFE so far have emphasized that by giving the biggest trucks the most leeway on fuel mileage. However, they will reach a point where they simply CAN'T get any bigger and still hold a Class 2, 3 or 4 rating. I will also agree that the true "small truck" market is a niche one; but a niche can still make a profit if the vehicles properly fit that niche. The current round of "mid-sized" trucks are much too large and while they may garner some sales, a Fiat Strada-sized truck could become a runaway success. I honestly agree with your entire argument, noting that you do point out the possibilities and exceptions that could prove the rule. It's very possible that a South American-built Strada, for instance, could be Fiat's way of bypassing the Chicken Tax.
  
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Dwford on Jul 17, 2014

I don't see how the new Canyon/Colorado become big sellers when I was just able to get over $9k off a Sierra and it's been out barely a year. Where can they be priced in such a huge discount environment?

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- Pch101 on Jul 17, 2014
  
  The bigger problem for the smaller trucks is that these things were sold primarily as lifestyle vehicles. Many of those lifestyle buyers of the past have since moved onto other segments, such as SUVs and CUVs. It wasn't the bed in the back that sold a lot of these things during their heyday.
  
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- Vulpine on Jul 17, 2014
  
  @Pch101 ... or was it, Pch101? Maybe it was CAFE that killed the small truck and maybe if a small truck came back the market for CUVs would fall through the floor, hmmm? No, I don't believe that any more than you do; but I do think the small trucks would sell a lot more than you want to believe.
  
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- Lou_BC on Jul 18, 2014
  
  @Pch101 - 1/2 of pickups sold are not used as a vocational tool. That means 1/2 are lifestyle vehicles. You don't need to buy a Tacoma to have what amounts to a lifestyle truck. I live in Northern BC and most of the 1/2 tons I see rarely venture more that 10 km off of paved roads.
  
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- Pch101 on Jul 18, 2014
  
  @Lou_BC In the United States, volume and market share for these trucks have collapsed for more than a decade. A large proportion of the market that used to buy these things 10-15 years ago has obviously bailed out for some other type or types of vehicle. They've exited the segment, and they probably aren't going back. There are plenty of substitutes, many of which don't have a bed in the back. Whether the current lifestyle buyers who remain in the segment will follow them to the exits, I don't know, but there are now plenty of choices available for those who wish to feel rugged, outdoorsy, rural chic or whatever.
  
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- DenverMike on Jul 18, 2014
  
  @Vulpine - CAFE did more to help small pickups by giving them Gas Guzzler Tax exemption in 1991. That's when small pickups started to grow. And get thirstier. Problem was all sorts of smaller SUVs also got the GG exemption. Americans mostly abandoned the once hot mini-truck trend/fad and there's no reason for them to dump their cushy SUVs and CUVs for midsize (or smaller) pickup's buckboard ride and other fails, vs what they've been spoiled by.
  
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- RobertRyan on Jul 18, 2014
  
  @Pch101 New rehashed European vans will cut into overall Pickup sales as well, probably a reason why Pickup sales have dropped
  
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- Vulpine on Jul 18, 2014
  
  @Pch101 "In the United States, volume and market share for these trucks have collapsed for more than a decade." -- Considering that the OEMs continued to make them bigger, the result IS obvious. Thank you. "The segment of the market that used to buy these things 10-15 years ago have obviously bailed out for some other type or types of vehicle." -- Since the product has been taken away from them, they really have no choice now, do they? "They've exited the segment, and they probably aren't going back." -- That's just speculation on your part; making assumptions based on bad data. "There are plenty of substitutes, many of which don't have a bed in the back." -- If it doesn't have a bed in the back, then it's not a substitute for a pickup truck. If it is a pickup truck that's physically too large for the need and desire, then it's no substitute for a SMALL pickup truck. "... there are now plenty of choices available for those who wish to feel rugged, outdoorsy, rural chice or whatever." -- But there are NO choices available for those who wish to do so IN A SMALL PICKUP TRUCK."
  
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- Vulpine on Jul 18, 2014
  
  @DenverMike Of course, you have the documentation to prove this statement? But then, even if true, it also shows that it wasn't that the buyers abandoned the market, but that the OEMs, through the excuse of Federal regulations, took it away from them. You can't have it both ways. Did the buyers abandon the market, or did the OEMs take their favorite vehicle away from them? As I've said many times, the people who want smaller trucks want SMALLER trucks, not trucks that could compete almost inch for inch with the full-sized ones back when their own small trucks were hardly bigger than a mid-sized sedan. In fact, show me ANY pickup truck today that's as small as a Chevy Cruze, a Ford Fusion or even a Dodge Charger.
  
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- Scoutdude on Jul 18, 2014
  
  @Pch101 The reality is that sales increased when the trucks got bigger. The Dakota stomped the D50 in sales which is why the D50 went away, they were available simultaneously for awhile. When the Ranger grew very slightly in 1998 its sales went up not down. When the Colorado replaced the S10 again sales went up not down. So the BUYING public appreciated more room in the cab.
  
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