By on August 12, 2014

1965_Rambler_Classic_660_Cross_Country

Discussions of GM’s “small” pickup touch on several deep issues. One is the nature of competition in the industry at the OEM level: to what extent is it an oligopoly, in the sense that each firm takes explicit account of the anticipated behavior of rivals in their product planning? The other is as murky, what is the cost structure of the industry? Neither is readily observed, even by executives at the Toyotas and GMs of the world.

The first strategic dilemma shows up in the history of small cars in the US. My non-scientific [definition: I've not gone back to look at data] sense is that there have been 5 waves: the late 1950s (when AMC’s Rambler sold well, a various European cars had their followings, including , the late 1960s (VW sold 600K Beetles in 1968), the latter 1970s through 1982 (following the first and second oil crises), and then again circa 2007. Each led the Detroit 3 to consider their strategy: enter or not. Or rather, not. Making cars is a fixed cost industry, and it’s also a status industry where larger vehicles carry higher prices. Now if Ford entered, so would GM – and vice-versa. The result would be a blood-bath, as no single firm would be able to sell enough cars to pay back development costs and overhead, and – if the market was flooded – discounts might even swamp direct costs.

So time and again we see new entrants eating away at the margins, sometimes doing well enough to turn their beachhead into an ongoing business (or given Toyota’s and Hyundai’s initial withdrawals from the US, biding their time for the next small vehicle surge and doing well enough the second time around). Sometimes (Daihatsu and Suzuki and [de fact] Mitsubishi) they don’t. (It’s too soon to tell whether Fiat will make it this time around.)

This action-reaction story has other variants. Dominant firms slowly lose share, because if you’ve got a 500K-a-year model, it’s better to change slowly and lose share gradually than to change quickly and lose share quickly. To rephrase: if you’re selling 500K, there’s no upside to being “edgy” in a redesign, You can’t gain much more in sales, but you sure can lose that replacement sale. Better to be conservative and boring, and then do the same the next model change, and the next. Bob Lutz shook up GM on the design front, but not before repeated downsizing left it with more legacy costs than it could handle. Akio Toyoda is now trying to shake up Toyota, after the firing [pardon, early retirement] of the top 4 in the firm back in 2009 by the firm’s elder statesman, Shoichiro Toyoda.

Ditto the elder Ford’s firing of the top people at Ford, er, his successful CEO succession strategy with Mullaly. At Ford it was a very close call; the firm was already in crisis, as nicely documented in Bill Vlasic’s book, Once Upon a Car. The shadow emperor Shoichiro didn’t wait as long, reacting to internal quality and cost data, and data on their increasing reliance on aging repeat buyers in the US and on a weak yen. But Shoichiro also had the memory of his family losing their stake in Toyota in the firm’s de facto 1950 bankruptcy, and a temper that led to him screaming at the Board. No such disruptions were permitted at meetings of GM’s board.

The larger point is that these strategic dilemmas are, well, dilemmas, and all of the leading firms face them on a regular basis. It doesn’t mean that GM didn’t have horrible management. It does mean that in the face of such dilemmas all management looks terrible. Just some look less terrible – perhaps Ford? – than others. For a while.

So … if GM launches a smaller pickup, what of Ford? Chrysler? others? The Chicken War tariff provides insulation from competitors from India and elsewhere [remember Mahindra?], but it’s a small market. A pyrhhic victory is all too likely: the Colorado does well and others enter, and all GM sees is red. There’s another downside risk, too: even if others don’t mimic GM, if the does Colorado too well it can cannibalize fat-margin Silverado sales. The only way around is to not refresh too quickly any small truck too quickly, to keep costs fixed costs from escalating. That strategic response holds its own dangers, as comments on TTAC of the Colorado pointed out.

To the second issue, the cost structure. Car companies have a hard time separating “fixed” from “variable” costs, and they have a hard time allocating those to a specific vehicle in a specific market – when two model cycles of multiple vehicles can come off a platform, how much should you be charged for development, engineering, tooling and general overhead? This requires a large measure of guesswork, between marketing and logistics and incentives, as ex-factory costs run 25% of the retail price. Purchased parts add perhaps another 45%, and only a modest part of that will change with vehicle size. Direct factory costs add 15%, and while a luxury vehicle may need extra steps, a small car and a large car all require brakes, and window molding, and so on – so assembly costs change little. My sense is that including the various upfront and overhead costs, 25% of the OEM total consists of fixed costs [and a portion of the price of purchased parts is likewise hides a big slice of fixed costs]. When sales fall, they sweat and then bleed, then bleed profusely. When sales rise the cash just keeps rolling in – and the temptation to dip into it, to fritter it away on acquisitions and perks and vanity projects typically becomes irresistible.

Perhaps the fixed costs of a small pickup platform can be leveraged on a global basis. But we are living in flush times, with a 16+ million SAAR and (for GM, a Chinese market where they can do no wrong). So my gut feeling is that for GM small pickups are one such a vanity project – as was for Toyota the Tundra, which loses money in big-truck-sized quantities.

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161 Comments on “A Reflection on Niche Vehicles...”


  • avatar
    RobertRyan

    @Mike Smitka,
    “Perhaps the fixed costs of a small pickup platform can be leveraged on a global basis.” No not at all as the global pickups are different to the US versions I.e. Chevrolet Colorado

    • 0 avatar
      Lou_BC

      @RobertRyan – GM likes to say that the USA Colorado is significantly different but how much is it really? Companies do say that meeting different regulations can cost around 25%.

      • 0 avatar
        Big Al from Oz

        @Lou_BC
        The US Colorado/Canyon appears to have a lighter chassis, different skin and interior design. The US variant will have a lighter suspension/drivetrain as well.

        I can’t really much more than that.

        Why would GM invest $2.5 billion into a vehicle, then spend big to alter it?

        I bought a new 1986 Nissan Navara King Cab. This pickup had the US style Hardbody, not the global body and it was a 1/2 ton not a 1 ton like the globals.

        When the gearbox let loose I had to replace it. The King Cab gearbox was a lighter gearbox, the global box and clutch fitted with no alterations. So I put one in.

  • avatar

    This is the issue that no one ever picks up.
    What does it really cost to build a car or truck ?

    Small pickup-still needs engine, electronics, and lighting.
    Big pickup-the same.

    Only material costs are different, so how much more is a hundred more pounds of steel ? Not the $15k difference in price.

    Look at motorcycles. The small bike for a kid is a $2000 cycle. The big bike for dad is a $6000 cycle. I can’t imagine they make much on the kid’s dirt bike-or that material costs are too much different.

    Why do you think everyone wishes they could build the next A4/3/Class darling ? You get 50K for a small car . Even with the clearly better content, slightly higher quality seats and better gadgets (all of which are expensive options) it can’t cost BMW that much more to build a 3 series than it costs to build, say, a Cruise or Avalon. A bit more, maybe, but not double the cost.

    Years ago, stories said the cost between building a Pinto and Lincoln were a few hundred dollars…for a car that was thousands more. Likewise, there was a study that showed that a $4000 Pinto had over $16,000 in total cost by replacement parts. Having nursed an old BMW into dotage, I can say that the OE brakes aren’t made of gold, they just cost that much-so for the repair side, you also have a huge difference in cost.

    Pricing is all marketing driven, not cost of production plus reasonable profit. Why do you think that (insert car here) with options you want is always just a bit more than you want to pay ? They are very good at this. (See:Porsche, or spend any tine with a car configurator on any website)

    If you lived in a cheap gas area (check) and sold pickups that pretty much are the same cost to you to build and market, then why sell truck that retail for $15k less ? You wouldn’t. This is the same reason why for so very long, cheap=small=cheap in the US. An expensive small car still confuses a lot of the market.
    So, what does it really cost to build a car, before non engineering overhead ?

    • 0 avatar
      Vulpine

      Better look at your bikes again, SL; big bikes for dad are running in the $15k – $20k range nowadays. And I’m not talking custom choppers, I’m talking Gold Wings and Harleys.

      You are right about one thing though, the car companies — or rather the OEMs building the big, BIG trucks — would rather make huge profits than sell a truly popular one. It almost sounds like the argument between Samsung and Apple, where one makes all the profits while the other has the most popular smartphone in the world.

    • 0 avatar
      28-Cars-Later

      Well put, speedlaw.

    • 0 avatar
      Zykotec

      After all the planning, designing, testing, computerprogramming, platform setup, dies and presses are set up and ready, suppliers have been checked out , and risks have been calculated ,the actual production costs for each single car is hilariously low. In fact so low that I believe they wouldn’t want us to know, and we wouldnt believe it anyway. (for a mass produced car, with not to many options offcourseIt’s all the other stuff that happens before production, and between production and the customer that cost money. And meetings offcourse…

      • 0 avatar
        krhodes1

        @Zykotec

        The FIRST car off the line costs billions. But every one after that just gets cheaper and cheaper and cheaper, and the more you can sell the cheaper they get. But if you can’t get the volume to pay those fixed and amortized development costs, you will bleed red ink. This is where that $1500/employee legacy cost disadvantage just KILLED GM – you either have to make $1500 more per car to pay it (and they couldn’t), or you need to take $1500 of cost out of the car (which is why they couldn’t get a decent price for their cars).

        The real profits are in the options. Whether it is a base 2wd work truck or a base 3-series, there is not much profit in a stripper. But you can add $20K+ in options to either one of those vehicles, and it is all but pure profit.

        • 0 avatar
          Zykotec

          Yes, the volume is offcourse important for the cost of each car, but the number of parts and material that go into producing each car is a negligible cost. I was making a generalization regarding popular cars. As for options, the base model/stripper may not be the most profitable, the best selling model is, regardless of how many options it has (if the manufacturers management is not completely incompetent, or really unlucky). If a fully loaded car is not very common, it will cost the factory/deler more to put that car together (this will vary with labour cost wherever that car is built offcourse). Which is why manufacturers like Honda and Toyota has spent years (decades) making a simple tier system instead of the single options that the big three used in the 50’s/60’s (and that the Germans still use to a certain degree today)
          Ideally you would want to produce as many similar cars as possible, with as few variances as possible.

    • 0 avatar
      bunkie

      Most “kid bikes” have powerplants and frames (and other running gear) that were amortized decades ago. More “adult” bikes are on much shorter development cycles which is why they cost so much more. The new “low cost” Hondas leverage older powerplants to help hit their price points.

      Interestingly, the new low-cost Harleys are clean-sheet designs which shows their commitment to risk-taking.

      • 0 avatar
        Lou_BC

        @bunkie – Harley has no choice by try to attract younger buyers. At the rate they are going Harley will die with us Boomers.

        • 0 avatar
          Hummer

          Idk I’m seeing a lot of young people on 883s and soft tails lately.

          • 0 avatar
            Lou_BC

            @Hummer – the Japanese have come out with 125 cc and 250cc bikes that look and feel a lot like their larger bikes and they are selling very well. We have seen a resurgence in the bike market.
            Harley has positioned themselves as the “badboy” manly man’s bike. The 883 and 1200 cc Harley’s with the exception of the V-Rod line are viewed as “girlie” bikes. That hurts sales and tends to remove entry level sales.

            I’ve seen an interesting trend when it comes to traffic accidents. It used to be mostly young men on sport bikes getting seriously hurt or killed in crashes but now we are seeing 50ish men getting hurt or killed on big cruisers. Ego and Harley marketing doesn’t encourage entry level bikes.

            One can argue that the same phenomenon exists in the USA for small trucks. Why by a small truck, “it doesn’t sound very manly to me Bill” to quote George Carlin.

    • 0 avatar
      pragmatic

      I seem to remember reading in Business Week (late 1970’s) that a study at Ford (possibly done by Hal Sperling) showed that it would be significantly cheaper for Ford to build all of their cars with power windows, steering, brakes etc, since they would only have to design one system, construction would be simplified and parts inventory cost (both at the factory and future replacement) would be reduced.

      The resulting loaded car could be sold at the price of he old stripped model and profit margins would be higher than the former loaded car at the higher price. The main thing preventing it was risk aversion and the marketing department.

      • 0 avatar
        krhodes1

        This is how it is done today. A/C, power windows and doors locks are almost universal, there are very few vehicles in the US market that don’t have them standard. Same with automatic transmissions in many cases. I would bet that Toyota actually loses money on those few super-stripper 4spd auto Corollas they still sell here. But they see a marketing value in being able to advertise that super low price to get folks in the door that makes up for the loss.

      • 0 avatar
        Zykotec

        This is certainly true, and is the reason why I can’t remember the last time I saw a Honda with window cranks, while the Europeans still sell new cars with window cranks in the rear…

  • avatar
    stingray65

    Because of historically low fuel prices and large geography of the U.S., the vast majority of Americans have evaluated cars on cost per pound or price per (length)inch basis, rather than on technological capabilities or objective quality. In such an environment, it is most profitable to focus on relatively low tech large cars (and trucks under CAFE), which only becomes unattractive to the US mass market when fuel prices spike (1970s and 2007) and/or cars get so crazy big they are difficult to drive (late 1950s). But cars made for the American market tend to be unattractive to the rest of the world, where high fuel prices and crowded conditions are most common, and is the reason foreign cars have tended to be more fuel and space efficient and technologically advanced. To some degree this means US brands such as Cadillac have little hope of competing successfully with BMW, MB, or Audi because they don’t have the global sales that would allow them to finance the technologies and platforms necessary to be competitive outside the US. In other words, the US is the world’s largest niche car market.

    • 0 avatar
      319583076

      Americans tend to evaluate housing in much the same way, i.e. – desiring the largest square footage they can afford before all other criteria.

    • 0 avatar
      DenverMike

      Even if the US is a niche to the world, the top 3 ‘most profitable’ cars in the world are US born and raised. The rest of the top producers make the list thanks to US sales.

      There’s a learning curve to building quality small cars and Detroit has been just as happy surrender that market to import brands. That’s slowly changing, as Detroit sets its sights on the global market. I’m sure Detroit is happy the US is the friendliest meaningful market to import OEMs.

      Luxury cars is another weak market for Detroit, but the words Luxury and Detroit don’t really go together. Not for Americans nor most of the world. For the world, the Raptor is the most attractive luxury car from “Detroit”.

      • 0 avatar
        Lou_BC

        @DenverMike – US car companies have not learned to build smaller cars. They just imported global models re-skinned to appeal to our tastes.

        • 0 avatar
          geeber

          If that approach works, then great. The average buyer doesn’t care whether the car in question was engineered in the United States or in South Korea. If the badge on the hood says “Ford” or “Chevrolet,” then that is enough for them.

          Ford used a Mazda platform for the second-generation North American Escort. The result was a competitive car for the times with good reliability. Several of my relatives had one and liked it. They always said that FORD made a good small car. They didn’t know or care about the Mazda connection.

          • 0 avatar
            Lou_BC

            @geeber – I tend to agree. If you were to frequent truck blogs we see many “Buy American” types sh!t all over the Tundra but drive around in a Ram HD’s.

            As long as it has a “Murican” badge on it all is well in the world.

      • 0 avatar
        RobertRyan

        The “imports ” are now Number 2 in the US, the US has been struggling to beat the imports since the early 1970’s with absolutely no luck whatsoever

      • 0 avatar
        krhodes1

        @DenverMike

        I assume you mean the big trucks? It is easy to make big money when you take something that has historically had a tech level mired in the ’60s and sell it for $30-60K. As trucks are forced to the same tech level as cars those profits are going to go away. Or they are going to get even more expensive, and the sales will eventually drop.

        I have to think we are going to see a drop in casual truck sales – my anecdote is that most of my friends that currently own trucks
        (suburban warriors all), are not planning to replace them with new trucks.

        • 0 avatar
          Lou_BC

          @krhodes1 – I fully agree. 1/2 of USA pickup sales are lifestyle choices.

        • 0 avatar
          DenverMike

          @krhodes1 – Can you expand on what “tech” is missing from pickups? They might have been a couple years behind most passenger cars for fuel injection, overdrive, airbags, ABS, or whatever you’re referring to, but now trucks may be a couple years ahead (of the mainstream) when it comes to 10-speed trans’, all-aluminum bodies, and who know what else they’ll lead in with.

          If your friends are about to abandon FS trucks, it won’t last too long. Once you own an open bed truck, you can never go back to closed body whatevers. I’m sure they’ll miss trucks more than trucks will miss them though. You can’t beat ‘em!

          • 0 avatar
            krhodes1

            I agree – light trucks are catching up – they HAVE to, CAFE mandates it. BUT, there is no way the aluminum F-150, complete with turbo engines and 10spd transmissions, and all the other tech necessary to get the fuel economy that they are required to provide, will not cost considerably more to build. So either the margins are going to drop, the prices are going to rise, or both. Prices in the truck market have proven pretty elastic, but there has to be a breaking point, and I have to think we are reaching it. Cars have pretty much tracked inflation over the past 25+ years, but trucks are MUCH more expensive than in the past. A lightly optioned XLT 4×4 supercab is entry level BMW money these days! That is relatively 2X what they cost back in the mid 80s. They currently have the margins to provide big incentives to keep sales up – I don’t see how that will continue. The days of 30% margins are OVER.

            On the other hand, they actually make real money on CARS now, so they don’t necessarily need the big margins on trucks to stay in business anymore – so maybe prices won’t rise much. Or maybe they accept smaller sales for the big margins? Will be interesting to watch, I have my popcorn ready. They had better hope for some reasonably stable gas prices for a while too.

            Around here, the solution to not buying a new truck is to buy a car to commute with and keep a cheap older truck as a beater. Which is why I have an old Range Rover in the garage. Mighty handy, even without the built-in porch (a trailer is much handier, for me). But I would never commute in the thirsty beast.

          • 0 avatar
            DenverMike

            They’re more expensive because they CAN be! But I don’t see why the trend would slow down. Fullsize trucks still offer tremendous value, before rebates, especially SLTs/XLTs and below. And they’re the last cars you can still get as a true stripper. It doesn’t hurt, pickups hold ridiculous value, 20 years down the road, if you take care of them. What’s a low mileage, clean 95 Taurus or Camry worth, compared to the similar condition F-150? It certainly helps that Mexico devours up our used pickups, probably about half of those produced. That creates a vacuum not seen in cars. That definitely helps push new pickup sales.

            But “D3″ Fullsize pickup OEMs can certainly pickup the tab for rapidly increasing tech. And spread out over several million units per generation, should be no problem. Have I mentioned they’re the most profitable cars in the world yet?

  • avatar
    Jeff S

    The Colorado/Canyon are similiar enough to the global version. It is not as if GM had to design the American version from the ground up. GM had a bssis to design the Colorado/Canyon and these trucks share just enough components with other GM products.

    The argument of a midsize truck taking sales away from the larger trucks is the same agument that was made 40 to 50 years ago that compact cars would take sales away from the full size cars. Those that want a smaller size don’t see a large size as an alternative.

    • 0 avatar
      05lgt

      Those that want a smaller size are usually willing to cross the street. Just because company A doesn’t cannibalize it’s sales with a smaller alternative doesn’t mean company B wont.

    • 0 avatar
      RobertRyan

      Jeff S ,
      A lot more changes than you would expect apart from the bodies I.e. US version has lighter frame, suspension and other parts

  • avatar
    Vulpine

    First off, Mr. Smitka needed to proofread his article before submitting it. The paragraph beginning with, “So … if GM launches…” has a couple of very serious grammatical errors that shouldn’t have passed even a cursory read-through. But that’s beside the point.

    Secondly, in the final paragraph when discussing the Toyota Tundra, I can only reference my father in law who lives in a farming community when he says, “I don’t know what’s going on, but I keep seeing more and more of the Toyota Tundra around here and the people who are driving them say they love them.” Maybe they are still a “niche” vehicle for Toyota, but they must be doing something right because farmers and contractors appear to be buying them in increasing numbers.

    • 0 avatar
      Shane Rimmer

      Nissan is hardly selling Titans, so they must be selling nearly every one of them around where I live. I see more of them on the road than Tundras in my area. Neither truck begins to compare to the number of Ford, Chevy, and Ram trucks I see, though.

      • 0 avatar

        Nissan is perpetually offering generous incentives on the Titan – currently $3000. If you need a big pickup and aren’t picky about it, it’s probably a pretty good deal. Especially if you are a fleet buyer.

        • 0 avatar
          Shane Rimmer

          madanthony, I understand. I guess I was just trying to say that the plural of anecdote isn’t data. A fair number of Tundras in an area is no more indicative of an overall trend than the number of Titans I see around my area.

    • 0 avatar
      celebrity208

      Anecdotally your father-in-law might just be conditioned to notice them since they’re not the establishment big 3… BUT, the numbers do bear out his observation since the Trundra market share is slowly increasing: March 2014 = 6.2%, October 2013 = 5.9%, March 2013 = 5.6% (sources: http://www.thetruthaboutcars.com/2014/04/cains-segments-q1-2014-full-size-truck-sales/ & http://www.thetruthaboutcars.com/2013/11/cains-segments-october-2013-truck-sales/)
      But it’s still only ~6%. That’s not much.

    • 0 avatar
      guevera

      Back home — Humboldt County, California — I’m seeing more and more Tundras all the time. One friend, and my sense is that he’s fairly representative of the market there, told me he went with the Tundra once he’d heard enough to be sure the Tundra wasn’t going to be another T100.

      The T100 destroyed decades worth of credibility and brand loyalty among truck owners in my part of NorCal. All of a sudden, die hard yota drivers were buying F250s.

      • 0 avatar
        Carlson Fan

        Exact same I4 and V6 engines that they offered in the compacts. That is what I remember about them. I bought a new compact in ’93, I never considered a T100 for even a second.

  • avatar
    Mike Smitka

    It’s an empirical question whether smaller pickups will be substitutes for large. Certainly with small cars the answer appears to be “no” – for example, the VAR [\"voluntary\" export restraint] of 1981 that drove up the price of subcompacts didn’t lead US consumers to substitute for them by buying more Detroit 3 vehicles. But I’m not sure that will prove the case here. That still begs the question of what segment declines if the market share of smaller pickups rises.

    As to typos, the editor decided to approve my draft before I formally submitted it, so I was unable to proofread it. There are a few such kinks that I need to work out in the blogging process, so please bear with me. I hate editing on-screen, but I have no printer at home and am only heading to the office today for the first time in a couple weeks.

    • 0 avatar
      Vulpine

      Heheheh. Guess it’s time to edit the editor, hmmm? Won’t put all the blame on you since he at least did a read-through before it went up. He should have caught that.

      And now I understand why everyone makes sedans with so few coupes–they’re afraid that by having only two doors they’ll be considered cargo vehicles–in other words, trucks. Personally, I have no need nor desire for exclusively 4-door vehicles. This legislation crap has GOT TO GO!

    • 0 avatar
      DenverMike

      Niche market. There’s too many better/trendier/cheaper choices for consumers to seriously consider smaller pickups with commercial-truck suspension and poorly equipped, gadgetry-wise. That’s unless they’re ready to spend 30 to 40K on a well equipped 4-door smaller pickup. Most would rather stick to CUVs, shoe box Cubes, and the like.

      It was a different story when the ’80s mini-truck craze took fire. What else was there to buy for super cheap? We didn’t expect or need much, and mini-trucks over delivered.

      • 0 avatar
        DenverMike

        @Loi_BC – Since Japanese import pickup OEMs passed on all costs to the consumer and were still undercutting US small pickup prices, how could the Chicken tax have possibly caused the end of the mini-truck fad/dynasty? And why did Detroit small pickup sales also drop dramatically after ’84? All small pickups were still the cheapest new cars around (except for Yugos and such) considering skyrocket inflation.

        And weren’t all import pickups made in America before their OEMs ran screaming from US cheapskates and fleet???

        • 0 avatar
          Lou_BC

          @DenverMike – ha ha . That is reaching even for you or Pch101.
          A 6% difference is easily made up on the sales floor.
          “Imports” went up 23% and “domestics” went up 29%.

          And what happened to the small truck market…… fad……… invasion that you always refer to?

          23-29% price hike killing the market does fit into your cheapskate market theory.

          I’ve thrown you a bone.

          Finally……evidence tha fits your cheapskate theory.

          In your case “tis better to be lucky than good”.

          • 0 avatar
            DenverMike

            @Lou_BC – You still won’t explain why domestic small pickup prices jumped a larger amount AND got locked in the same death spiral as import pickups???

            And why did all car prices rise by a similar amount during the same time period? And why are you still rock’n the mullet and where are you still finding parachute Pantz????

          • 0 avatar
            DenverMike

            Small pickups were just another Hot trend in pop culture that faded away. The trend’s demise was hardly a gov plot. The JFK thing? Now that I can believe!!!

          • 0 avatar
            Lou_BC

            @Denver Mike – “You still won’t explain why domestic small pickup prices jumped a larger amount AND got locked in the same death spiral as import pickups???”

            Ummm………. re-read your post a couple of hundred times.

            Alex – I’ll take non sequitur for 500 please.

            Try greed……

          • 0 avatar
            DenverMike

            @Lou_BC – Greed? Wtf? The price of import mini-trucks shot up, but so did everything else. Domestic mini-trucks, all cars, fuel, milk, KFC… They all went up the same percentage or more!!!

            Now get back on topic and explain how the tariff ruined it for import pickup trucks. This despite the simple fact the rules never changed, from 1979 and ’89, when the BRAT loophole ended.

            The ’80 VW Rabbit was $4,285, while the ’84 VW Rabbit was $6,994… That’s some crazy inflationary times! Just 63% more!!!

            That’s GREEDY???

            The base ’84 Chevy S10 was $6,993 but the’84 Datsun Pickup was $5,634. That’s a huge difference!

            Import pickups had every advantage to outsell all domestic small pickups. No, most EVERYTHING on the market!!!

            thepeoplehistory.com/80scars.html

            thepeoplehistory.com/1980imports.html

          • 0 avatar
            Lou_BC

            @DenverMike – you and Pch101 keep trying the inflation angle. Is there some repressed problem lurking there somewhere?

            “Import pickups had every advantage to outsell all domestic small pickups. No, most EVERYTHING on the market!!!”

            Back to that Chicken Tax – 25% tax to Uncle Sam sounds like a monster advantage.

            Keep fishing – you gut lucky on that cheapskate angle.

          • 0 avatar
            DenverMike

            @Lou_BC – Since mini-trucks were cheaper than all else on the market at the height of the mini-truck craze/fad/explosion, that blows your little Chicken tax theory out of the water, as to why the segment hit the skids. Especially since a good percentage of them were domestic small pickups (S10 and Ranger) and others were already made in the US and Chicken tax exempt. In fact, all the bigger players were made in the US, while the small pickup segment was still going strong. So what the heck are you going on about???

          • 0 avatar
            Lou_BC

            @DenverMike – it isn’t my theory. Read the article I posted.

            Here is another one for you:

            “U.S. Imports of Japanese Automobiles
            • Under the VER, the average price of U.S. cars rose very rapidly—43% increase from 1979 to 1981.
            • This was due to the exercise of market power by the U.S. producers, who were sheltered by the quota.
            • The quality of U.S. cars did not rise by as much as the quality of Japanese imports seen in figure 9.5.

            http://dept.econ.yorku.ca/~lileeva/_3150/ft_2e_ch09.pdf

            The Department of Economics at York University appear to have the belief that trade barriers have helped the USA auto industry and screwed consumers.

            I can keep going……….

            Pch101 – care to continue to criticize my ability to do research?

          • 0 avatar
            DenverMike

            @Lou_BC – You’re simply dancing around, somewhat proving a point that has absolutely nothing to do with the topic. Americans got screwed and payed a little more for cars, over an above extreme inflationary times. Got it.

            OK. So how did Chicken tax cause the demise of the mini-truck fad/dynasty, especially those pickups already made in the US, not counting the Ranger and S10?

            Mostly you’re forgetting Japanese OEMs were more than a little PI$$ED about the VAR and opened the dump valve on cut-rate mini-pickups exported to the US, as fast as they could build them and put them on a boat, since there were zero limits on pickups.

            Americans fell in love with them and it was perfect timing too. Just what we needed. Style, utility, sporty, fuel efficient, reliable, high quality, very affordable, trendy. Mini-trucks sold in record numbers. But it was an artificially strong market.

            We were finished with gas guzzlers of all sorts, including molester vans, muscle cars, huge Starsky/Hutch coupes, etc. And of poor quality. Mini-trucks hit the spot, but the fad couldn’t sustain that crazy momentum. Something had to give. And for Japanese OEMs, mini-trucks were a temporary ‘stop gap’, until the Accord, Camry, Civic, 626, Stanza, Maxima, etc, assembly lines in the US could start pumping out cars, obviously unrestricted.

            All good things have to come to an end. No conspiracy. Japanese OEMs put mini-trucks on the back burner, and cooled production until they could be built in the US. They put the focus back on cars, and introduced us to smaller, sporty SUVs that COULD be built in Japan and imported without any restrictions. The VAR was dead at that point. So Japanese OEMs opened the dump valve on compact and midsize SUVs. Samurai, Tracker, Trooper, Rodeo, Pathfinder, you name it. A whole new trend was started. American consumers started moving away from mini-trucks and that included the S10 and Ranger. And so what? What government plot killed off your parachute Pantz???

          • 0 avatar
            Lou_BC

            @DenverMike – opinions are like assholes, everyone has one.

            I’d like to see some proof backing your side of the debate produced by experts in the field.

            “Dancing around”???????????????

            I’ve posted my evidence.

            Where is yours?

        • 0 avatar
          FormerFF

          I must be missing out on this chicken tax thing. I worked for a Mazda store during the early and middle 80’s, and we sold the hell out of Japanese made Mazda pickups. I understand the way they got around the chicken tax was to import the cab and chassis without the bed, since the tariff was specifically on pickup trucks, and installed the bed at the port.

          Now, the carmaker could build the entire vehicle in Mexico with no tariff issues, so I don’t see production as the issue.

          • 0 avatar
            Vulpine

            A good question, FF. The issue is no longer production itself, but rather whether it’s worth the effort to bring a smaller truck into this market. Some insist that a smaller truck would be an abject failure–unlikely to sell 100,000 across all brands entering that market. Others, like myself, believe that one or two players in the true compact range would carry a healthy market, though at the cost of other types of vehicles. My personal opinion is that the compact/midsized CUV/SUV market would take the hit–at least partially because the market is getting stuffed with too-similar vehicles; it’s getting hard to tell one brand from another today.

            But Mazda in specific has a different issue at hand, they’re still very tightly connected to Ford for several of its models. As we’ve heard from Australia, the Mazda BT-50 and the Ford Ranger are virtually identical and even here in the US we saw that the Ranger and the B-5000 (post ’84) were twins. I doubt that Ford would let Mazda bring in the BT-50 unless the Ranger itself joined the market–flooding what may be a too-small market with too-similar models.

            Now, if Ford were willing to let Mazda ‘feel out’ the market for them, I could see the partnership working still, but I also think Ford doesn’t want to miss out on that early rush. Rather, they’re letting GM take the risk and will use the Colorado’s success/failure show the direction of any Ford/Mazda effort. Personally, I think this is a mistake because the new Colorado is bigger than the compact truck market wants, so I don’t see it doing as well as GM’s South American “Montana” would do.

    • 0 avatar
      Lou_BC

      @Mike Smitka – “Voluntary” import quota’s along with tariffs ended up costing the US consumer billions. The price of small cars climbed because the USA based companies did not use the restraint program as an opportunity to gain market share but to pad the bank accounts. The Japanese did the same thing.

      When we look at the profitability of niche products and small trucks definitely fit that description, production costs in the USA make them almost as expensive to build as more profitable big trucks.

      That begs the question, why not import them from countries with lower production costs?
      We can thank the Chicken tax for keeping low cost IMPORTS out of the USA.
      I’ll repost what I put on another thread as it is completely relevant to this discussion:
      “In 1980, the United States “applied” the “chicken tax” tariff to imported Japanese trucks and cab chassis, which then became subject to a 25% tariff rate. 8 In 1984, the Japanese automobile industry challenged the United States classification of lightweight trucks and cab chassis as finished trucks because the new classification significantly increased the tariffs on Japanese imported lightweight trucks and cab chassis.’ The Court of International Trade upheld the cab chassis classification and the 25% tariff and the Court of Appeals for the Second Circuit affirmed the decision.’ Once again, the cost to consumers was dramatic: over the next three years, this tariff led to more than a 23% increase in imported truck prices while the price of American-made compact trucks increased by 29%.” Ironically, the Japanese auto industry remains the principal target of this tariff despite the chicken tariff’s rather limited purpose and even though Japan imports more United States poultry products than any other country.”
      http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1443&context=auilr

      If the Chicken Tax is ineffective at curbing imports then why would they want to reclassify minivans and even import SUV’s as trucks?

      Niche markets that are price sensitive cannot be served well by domestic manufacturing that puts them on an assembly cost that is on par with larger more profitable vehicles.

      The chicken tax forces domestic production of small trucks. Ford has said why bother. Ram has said the same. GM is taking the chance. Toyota was a small truck builder first and foremost.

      The obvious solution to serving more “specialized” markets is through homogenization of standards, in other words the removal of technical barriers to trade (emissions and crash standards) and the removal of tariffs.

      Ford wants a FTA to be signed with the EU. They state it is not to open trade for high volume vehicles but to facilitate serving niche markets. That would mean the Mustang for the EU and the Ranger for the US.

      • 0 avatar
        Pch101

        I already explained to you that consumer prices increased by 21% between 1980 and 1983. That was a period of high inflation, which is easily verified with a quick check with your friends at Google.

        I also pointed out to you, with a link to a document from the federal government, that showed that steel prices increased by 25% over the same period.

        I also noted that if you review new car MSRPs from the era (which are available from NADA) that you will see that all sorts of passenger cars also shot up in price during that era, due largely to inflation.

        I noted these things to you more than once. This leaves me to conclude at least one of a few possibilities:

        a) You are functionally illiterate

        b) You don’t know how to use a search engine to find or confirm basic information, such as the inflation rates between 1980 and 1983

        c) You don’t understand what inflation is

        d) You are trolling

        e) Some or all of the above

        I’m not sure what the answer is. All I do know is that you’re either not very bright or else you do a very good job of feigning stupidity.

        • 0 avatar
          Lou_BC

          @Pch101 – is that all you got?

          Insults and stuff collected to support your own view of reality.

          You remind me of a belligerent beat up drunk I has to deal with in an ER Suture Bay.

          He kept bragging how tough he was and how superior he was to everyone else. He’d usually finish a tirade with “yeah….. you should see the other guy”.

          Just as he finished his “other guy” rant I relied ” Yup, I’m sure your face made a real mess of his knuckles!”

          Your whole drunken bully routine isn’t working.

          Quit while you have some dignity and credibility left.

          BTW, you are bleeding on my shoes.

          • 0 avatar
            Pch101

            This would be much easier if you would just admit that you don’t understand what inflation is.

          • 0 avatar
            Lou_BC

            PCh101 – like I said, stop bleeding on my shoes.

            Try finding some professional help sorry I mean profession paper that backs your claim that the Chicken tax has no effect on the market.

          • 0 avatar
            Pch101

            You really ought to take an economics class. The professor could explain inflation to you.

            Have you found the Bureau of Labor Statistics website, or is your Google broken?

          • 0 avatar
            Lou_BC

            @ph101 – “You really ought to take an economics class. The professor could explain inflation to you.”

            “Take an economics class”- I did on my first degree.

            “The professor could explain inflation to you”…..

            No need to, the experts on Trade Law did all of the heavy lifting for me…..

            “Cladouhos, W. Peter. “The Multi-Purpose Vehicle Reclassification and Minivan Dumping Disputes Between the United States and Japan and Their Consistency with United States Obligations Under the GATT.” American University International Law Review 10, no.3 (1995): 1109-1166.”

            Yawn – I’m surprised you haven’t bled out.

            any more insults?

            Those last few were real good.

            Here is a rule for doing research – go to reputable sites.

            Google just provides a ton of unverifiable junk.

            Maybe you need to look up “Grey” Literature or “Grey” Research.

          • 0 avatar
            Pch101

            If someone gave you a degree, then you should sue them for malpractice.

            Your ginormous, astonishing 23% increase was consistent with the overall inflation rate at that time.

            And I have some bad news for you: the base MSRP of Mazda, Toyota and compact Ford pickups increased at below the inflation rate at that time, while Datsun (Nissan) had price growth that matched the inflation rate. Your chickens are coming home to roost, as it were.

            You really ought to do some research so that you’d know these things, but that’s obviously too much to ask.

          • 0 avatar
            Lou_BC

            @Pch101 – that 23% was in three years.

            “If someone gave you a degree, then you should sue them for malpractice.”

            I’m crushed.

            “You really ought to do some research so that you’d know these things, but that’s obviously too much to ask.”

            I did.

            Finding credible verifiable documented evidence is called research.

            Here is a piece of my research:

            “Cladouhos, W. Peter. “The Multi-Purpose Vehicle Reclassification and Minivan Dumping Disputes Between the United States and Japan and Their Consistency with United States Obligations Under the GATT.” American University International Law Review 10, no.3 (1995): 1109-1166.”

            I’ll repost it since you must of missed it last time.

            Due you want sutures or glustitch for that head wound?

          • 0 avatar
            Pch101

            Doubling down on obtuseness isn’t doing you any favors.

            Inflation. Go Google it.

          • 0 avatar
            Lou_BC

            @Pch101 – “Doubling down on obtuseness isn’t doing you any favors.”

            bazinga!………….. another good one.

            Try posting a scholarly article that proves I’m wrong.

            Here is more reseach to prove I’m correct.

            http://dept.econ.yorku.ca/~lileeva/_3150/ft_2e_ch09.pdf

            I got another for you………

            http://www.brookings.edu/~/media/Projects/BPEA/1987%201/1987a_bpea_crandall.PDF

            “In the automobile industry, real profits have risen steadily since 1982 despite sharply lower domestic sales of vehicles. Profits per unit in 1983-85 were nearly 40 percent above those in 1974-76, when industry output was similar but the dollar was 30 percent lower (table 6).”

            “The restraints produced an estimated increase in cash flow of some $6-$8 billion, before leakages into other factor suppliers’ rents.13 Thus, between 33 and 45 percent of the 1984-85 auto industry cash flow may be attributed to the restraints, even assuming no effect upon unit sales.”

            So much for your inflation theory…..

            You keep telling me I don’t know how to reseach…….

            This is fun………

            Care to continue?

          • 0 avatar
            Pch101

            Typing more doesn’t make you look any smarter, it just digs your hole deeper.

            Law school papers are written by law school students who are studying the law. Not economics, trade or business, but the law.

            Hanging your hat on that is foolish. But it’s even worse to do that while ignoring inflation data from the government agency that calculates it and car pricing data from the national dealer association that compiles it. The BLS knows more about inflation, and NADA knows more about car sticker prices than your law school student, yet you refuse to look at actual data from authorities in their respective fields.

            (Presumably, you won’t read it because you wouldn’t understand it if you did, so no great loss, I suppose.)

          • 0 avatar
            Lou_BC

            @Pch101 – ha ha ha ha ha ha .

            Those other articles are done by experts in the field. The Law Paper was also done by experts.

            All you have done is post insults….

            and I have buried them with scholarly articles from experts in the field of law and economics.

            Lucky for you most people have short attention spans and will not bother to read anything I have posted.

            Many have fixed views on the topic unsupported by any expert proof.

            Here is a simple question that requires a yes no answer……….

            Do you own a truck?

          • 0 avatar
            Pch101

            Your law school student clearly didn’t study economics, as he failed to note the distinction between real and nominal price increases.

            Once again: a 23% price increase over a three-year period that consumer prices rose by 21% and steel prices rose by 25% is not exactly a shock. Even if we take your figure at face value, it tracked the inflation rate.

            And if you were to look at the increase in asking prices of those imported trucks, you would see that they didn’t exceed the inflation rate. In effect, Toyota, Mazda and Ford actually reduced their prices after accounting for inflation, while Datsun’s prices essentially matched the CPI.

            If you actually figure out what I just wrote, then you’re going to start feeling embarrassed. Fortunately for you, I’m sure it’s above your head, so your pride can remain intact.

          • 0 avatar
            Lou_BC

            @Pch101 – steel was also subject to protective tariffs at that time.

            This one covers steel and cars.

            http://www.brookings.edu/~/media/Projects/BPEA/1987%201/1987a_bpea_crandall.PDF

            Still grasping at straws.

            You got nothing…………

            well………………….

            you got piss poor insults……….

            other than that………………

            you got nothing.

          • 0 avatar
            Big Al from Oz

            @Lou_BC
            Well, there you go, how do you feel after dealing with Dumb and Dumber.

            After reading the content that these two guys present you can’t but not help yourself thinking that they are being paid to disseminate inaccurate propaganda, I would have thought that TTAC staff would have identified this trend.

            But, who? I wouldn’t hazard to guess some union group affiliated with the auto industry. I’m not going to name which union, though ;)

          • 0 avatar
            Lou_BC

            @Big Al – never under estimate a person’s ability to exist in a complete state of denial.

            In one case we see Exceptionalism facing the fact that the domestic auto industry was (is?) mediocre and in the other case……….. the need to be a ginormous sphincter without any muscle tone spewing its fetid content on anything within diaper range.

          • 0 avatar
            Pch101

            The irony here is that you don’t even realize that your little factoid actually disproves your point.

            If the tariff impacted truck prices, then one would have expected a couple of things to happen:

            1. Truck prices should have increased more than other vehicle prices

            2. Truck prices should have increased by the inflation rate, plus by the amount of the tariff

            The fact that neither of those things occurred indicates that the tariff had no effect at all. But again, you’re too unintelligent to realize how unintelligent that you are.

          • 0 avatar
            Vulpine

            “1. Truck prices should have increased more than other vehicle prices”
            — They did.

            “2. Truck prices should have increased by the inflation rate, plus by the amount of the tariff”
            — Not necessarily, since the imports effectively disappeared after ’84 when the cab/chassis exemption was eliminated. From that point on, those trucks being built IN the US had no outside competition so they had no reason to raise their prices above the inflation rate–yet they did. Sure, base model prices tended to stay at or below the average price of most cars, but the trucks still had the advantage–especially the big trucks–of attaining ridiculously high profit margins and until the new, grossly over-engineered Fords hit the market, still retain profit margins well over 50%, as evidenced by the fact that the OEMs and dealers are promoting their trucks with “rebates” up to 30% off their MSRP and they’re STILL the most profitable vehicle they sell by far.

            In essence, by eliminating foreign competition, they’re able to price their trucks as high as they want, knowing they have a captive market.

            You also forget that with the advent of the Ranger, S-10 and later the Dakota, the American OEMs no longer needed to import the Japanese models, which effectively cut Japanese imports by 50% or more. In other words, there was no ONE factor that killed the compact truck, but the Chicken Tax combined with true American entries into the market were the main players. Add to this the CAFE regulations which required trucks to get no worse fuel mileage than cars of the same size and we see how the compact truck grew into the mid-size truck while the full size truck grew into the RoadWhales™ we see today.

          • 0 avatar
            Pch101

            I’m starting to think that there is an inverse correlation between passion for small trucks and intelligence levels.

            One more time: If you look at the base sticker prices of Ford, Mazda and Toyota compact trucks during that time, they increased less than the rate of inflation. In real terms, their prices fell.

            The Datsun trucks kept up with inflation. In real terms, their prices stayed the same.

            NADA tracks this stuff. Maybe you guys should get your Google fixed, go look at the NADA website, and learn something for a change.

            Imposing the tariff obviously had no pricing impact at all. The OEMs must have absorbed the hit instead of passing it on to their customers. That sort of thing happens in the real world.

          • 0 avatar
            Vulpine

            NADA is biased and always has been. If the law review says American truck prices jumped 29% even though the inflation rate was only 24%, I’m much more inclined to believe that. They don’t have any money riding on the outcome of the review.

            Again, there were many factors that came into play and you cannot designate any one and say “THIS is why small trucks went away”. However, when you consider that the vast majority of those factors were legislative in nature, then we CAN see your facetious “government conspiracy” theory in a different light. Not an intentional conspiracy by the government itself, but an accidental one through many unrelated rulings combining into an overall problem.

          • 0 avatar
            Pch101

            The Larry, Moe and Schemp of TTAC must have all been dropped on their heads as children.

            The NADA data to which I am referring is simply a collection of historical sticker prices. There’s no bias, it’s just MSRPs.

          • 0 avatar
            Lou_BC

            @Vulpine – the first article I posted I found a long time ago the first time this debate surfaced with DenverMike. At that time I actually did not have a definitive opinion on tariffs. The research I did back then clearly showed a correlation between tariffs and import restrictions and what occurred in the market place.

            I found multiple scholarly articles on the subject in minimal time last night. There were more articles on VRA’s but both pointed to those factors having significant effects on the market place.

            I have yet to find a published paper that says tariffs and VRA’s have had zero effect on the market place.

            I have found opinion pieces that state that in the present time there isn’t much need for the continuation of tariffs but I did not cite those pieces as they are just opinions.

            Ford does not want FTA’s with Japan, the UAW does not want the lifting of tariffs, many congressmen on both sides of the isle do not want them lifted.

            The consumer has paid the price for trade barriers in the sum of billions. The fact that USA auto industry collapsed once again in 2008 is evidence that they squandered away any advantage gained.

            Some experts have said that these barriers have made them more susceptible to economic changes due their dependence on large SUV’s and large trucks. A false sense of protection has made them complacent. GM’s current recall woes indicated that bailout did not change their culture and SOP.

            We have seen the vulnerability of recent US auto industry practice with the anti-large SUV movement where the Hummer became the poster-child of wretched excess. The fuel spike we saw at the time of the economic downturn saw pickups and SUV’s offloaded for more economical vehicles.

            Someone had said that 90% of Ford profits globally comes from full sized North America pickup sales. That is a very vulnerable position to be in.

          • 0 avatar
            DenverMike

            @Lou_BC – Now you’re just being silly. You can find plenty articles on the existence of Bigfoot, but those that don’t believe won’t bother writing a paper.

            Yes the price of cars did see a substantial increase, but the article never minds inflation in to prove its premise. They sort of forget to mention Japanese OEMs piled on and forced excessive option to make their quotas worthwhile. Only X amount of cars could be imported, so they made sure they were loaded with maximum options and luxury. That made the price Americans paid rise dramatically. But American got a lot for the extra cash.

            They also invented Acura, Lexus and Infiniti in that timeframe. Again to make quotas worthwhile. High end Japanese sports cars came to be for no other reason. Then went away.

            So the VAR had little impact on the market except it encouraged more options/luxury. Including on domestics. That’s another reason mini-truck sales soared. They could be had as strippers all day long.

            So it wasn’t like Americans suffered hardships in new Supras, Cressidas and Maximas…

            But you’re still dodging the question, how exactly did the chicken tax injure import pickups when they sold for less than everything else, including the Ranger and S10? And why did Ranger and S10 sales torpedo just the same???????

          • 0 avatar
            Lou_BC

            @DenverMike – “evidence of bigfoot?”

            Experts in trade law as well as statisticians/economists that publish papers in renowned peer review Journals do not make shit up.

            Pear review……..

            That means every other expert has the opportunity to review and critique the study or report and post any contrary evidence.

            I deal with that sort of thing professionally every day.

            Evidence based……….. look that up.

            Everything I have posted has been backed up by experts in the field.

            All I get from you are weak opinions based on observation, observations made by unskilled eyes.

            I’m getting really bored with you two.

            I didn’t expect much from you.

            I expected a bit of a challenge from Pch101.

            Lame ineffectual insults from him made me loose any ensemble of respect for the guy.

            I pity the guy just like the beat up drunk in my ER.

          • 0 avatar
            Pch101

            It would seem that they don’t teach basic arithmetic in Canada. Weird how that works.

            Between 1979 (the last full year before the chicken tax cab-chassis ruling) and 1983 (the last year of three year period cited in the aforementioned law student’s review paper), US consumer prices increased by 37.2%. (Yes, kids, the US had double-digit inflation back then.)

            During that same period, the base MSRP of a Toyota pickup increased by 26.3%, below the rate of inflation.

            During that same period, the base MSRP of a Mazda B2000 pickup increased by 23.4%, below the rate of inflation.

            During that same period, the base MSRP of a Ford compact pickup increased by 29.4%, below the rate of inflation.

            During that same period, the base MSRP of a Datsun compact pickup increased by 37.8%, about the same as the rate of inflation.

            The MSRP of a base Chevy Impala sedan increased by 37.2%, matching the rate of inflation.

            The MSRP of a base Ford Thunderbird increased by 49.9%, well above the rate of inflation.

            The MSRP of a base Pontiac Firebird increased by 58.7%, well above the rate of inflation.

            It’s funny how real world data never seems to correspond to anything that you have to say. In Lou’s universe, 2+2=47 when emotions are on the line.

          • 0 avatar
            Big Al from Oz

            @Pch101
            I do realize you don’t like to converse with myself.

            But, here is a couple of facts;

            1. How can you state that subsidisations for EV is designed to influence consumer behavior and then state that the 25% Chicken Tax is the opposite??

            2. If the Chicken Tax is so useless and has no effect on the US light commercial market, why is the US government, UAW supporting this tax??

            3. Just recently Ford in the way it managed it’s Transit Connects raised some hackles in Washington DC.

            With the amount of research and documentation on the effects of this tax completed by people with far more knowledge than you, how can you deny and refute the existence of this information??

            Instead of attempting to re-interpret data to suit your paradigms, whether they be paid or you are doing this for free, why don’t you put forward links and credible proof to support your arguments. Not skewed and disconnected data.

            I do think you are on screwed up loser. I’m politically inappropriate at times, par venu (French).

            But you are a totally obnoxious person, with little respect for anything or anyone.

            In any debate, especially supporting your paradigms there must some basis for this support.

            What we want is credible, valid and verifiable information supporting your arguments.

            Go back to your UAW research assistant and fire them, or provide proof, real proof.

          • 0 avatar
            Lou_BC

            @big Al – I continued on with this debate considerably longer than I probably should.

            But with that being said, DenverMike and Pch101 are both highly predictable in their behaviour.

            I continued on knowing full well that the stupidity would continue. My hope is that any “normal” person will read this blog and see them (especially pch101) for what they are…. non-contributory belligerent fools.

            Like the saying goes: “Tis better to be silent and be thought a fool, than to speak and remove all doubt.”

            Pch.101 and Denver should of STFU right after I posted my first scholarly article.

            It was highly entertaining to watch them dig their own graves and lay down in the holes.

            Who needs reality TV with those 2 bozo’s around?

          • 0 avatar
            Scoutdude

            @Vulpine, there is ONE reason that compact pickups went away and that is simply because people stopped buying them NEW in sufficient numbers to support as many players in the game as there were during the mini truck boom.

          • 0 avatar
            Pch101

            I see that some people are still struggling with the concept of inflation.

            The news that the real price of compact Toyota, Ford and Mazda pickups fell in the three years following 1980 produces only confusion and drama. It must be disturbing to see your religion torpedoed with a few basic data points.

            It probably wouldn’t aid your emotional state if you learned that the same could be said of the Dodge-badged Mitsubishi pickup, the Subaru BRAT and the Isuzu pickup (which was sold as the Chevy LUV until 1982). Same thing — their prices all increased below the inflation rate.

            In other words, real prices of these trucks actually declined during this timeframe. The truth is a wee bit inconvenient.

          • 0 avatar
            Vulpine

            Sticker prices are not necessarily MSRPs. I know this from personal experience having sold cars out of a new car dealership myself. There is a reason they call it the North American Dealer’s Association. They DO have money in the game.

          • 0 avatar
            Pch101

            The information reported by NADA is the MSRPs.

            I realize that you aren’t smart enough to go look it up yourself, but someone with average intelligence could have looked at the NADA website and confirmed this in less time that it took you to write your inane comment.

          • 0 avatar
            28-Cars-Later

            A simple observation: if it were possible to bottle the amount of energy expended on various discussions about “small trucks” on this website, it could power a factory to build small trucks.

        • 0 avatar
          Vulpine

          Ummm… Pch? Where, exactly, did you get your 23% figure from? Your numbers appear LOW according to BLS figures. Between ’80 and ’84 I get 26% and between ’79 and ’84 I get 43%. This is using BLS’ own inflation calculator ( http://www.usinflationcalculator.com ) based on a $5,000 purchase on the first year of that period and coming back with a $2,156 (rounded) increase in ’84. BUT–even taking that into consideration, you always ever so conveniently ignore that the 25% tariff goes ON TOP OF whatever the Japanese sales price of the vehicle may have been AFTER inflation is taken into consideration. That is effectively why we saw no more Japanese imported pickup trucks in ’85–not only had their three biggest customers quit buying from them, but they were effectively priced out of the market because of the tariff.

          Once the Japanese trucks were taken out of competition, the American OEMs were free to do what they could to dodge ever-increasing fees for having such poor fuel mileage in their vehicles which meant making their trucks bigger so that their cars saw proportionally greater fuel economy improvements.

          As long as the trucks were somewhat isolated from “fleet wide” requirements, they could stay at mid-’70s fuel economy by creeping up in size. Conveniently, they were able to realize significantly more power by using their fuel more efficiently–but at the cost of not improving their real fuel economy proportionately. Now that CAFE rules are including trucks in the fleet-wide calculations, the cars are being forced to counterbalance the trucks’ poor economy and by the end of 2025 there’s simply no way they can do it unless they all go BEV. Not even an all-hybrid automotive fleet would garner enough range to counterbalance the current truck economies and THAT is why the American OEMs are scrambling so hard to drag truck economy up to automotive levels.

          But aluminum bodies and exotic alloys won’t be able to pull the trucks out of their gutter–they’ll have to do something else and I think GM’s new “mid-size” trucks are only the first step in a three-step process. First, bring the half-tons back down to 1990 size and weight. With modern 4-cyl and 6-cyl engines pushing old 5liter and 6+liter horsepower and torque, their performance should remain capable across the board AS half-ton trucks. Meanwhile, the ¾ and 1-ton trucks will rise into a new medium-duty class that are already Class 4+ in capability which may also help exempt them from CAFE again. But that doesn’t *quite* get the half-tons out of the woods. They’ll still need something that can drag the light trucks back up into the permissible range and that’s likely to be a much smaller entry using much the same engines as the half-tons. With the half-tons running still in the 4500#+ range, the new engines’ economy will reach the high-20s mpg, but they need to crack the 30 and take it as far over as possible. Only another, more aerodynamic and even lighter body can do it–maybe with help from hybrid technology. Those same engines pulling a 3500# body will be able to loaf along when empty and not even show a strain with an added 1,000# of cargo aboard. And of course, if they’re governed to stay below red-line, then high fuel mileage is eminently possible.

          • 0 avatar
            Pch101

            “Where, exactly, did you get your 23% figure from?”

            From your friend Lou, who gets his information about cars from law school students and who never learned the connection between high inflation and price increases.

            “Between ’80 and ’84…”

            Since the chicken tax began to apply in 1980, I used 1979 as a chicken-free base year.

            Since Lou’s law school student was measuring price increases through 1983, I did the same.

            The inflation rate in 1979 was in double digits (or close to it, depending upon the data source), as it was in 1980 and 1981.

            Between 1979 and 1983, only Datsun managed to keep its small truck prices up with inflation. The others fell behind.

            I really shouldn’t have to explain how ignoring inflation is foolhardy when assessing these price hikes, yet here I am, pointing out something that should be obvious even to those who know little about economics or trade.

          • 0 avatar
            Vulpine

            “From your friend Lou,”
            Ah. So you didn’t bother to do your own research either.

            “Since the chicken tax began to apply in 1980, I used 1979 as a chicken-free base year.”
            Which is why I used ’79 as my base year to get that $2156 figure at 43%.

            “The inflation rate in 1979 was in double digits, as it was in 1980.”
            I believe I already said that. The difference between 43% in the ’79-’84 year space and 26% between ’80 and ’84 shows that ’79 to ’80 had 17% inflation.

            However, that inflation REALLY isn’t the issue since the compacts would have had to be priced at that 43% PLUS 25% tariff to stay in the market and as you’ve so clearly pointed out, the only foreign brands that stayed in the market already had full assembly capability here in the States, either through their partnership with the D3 (Mazda specifically, through their partnership with Ford) Nissan and Toyota. Isuzu and Mitsubishi effectively vanished.

            I will acknowledge however, that the sudden gross inflation rates were PART of the conditions that saw the death of compact trucks. Not ten years earlier I had purchased a “personal luxury car” for less than what a base S-10 sold for in ’84.

  • avatar
    Pch101

    “if the Colorado does too well it can cannibalize fat-margin Silverado sales.”

    In light of the existing trend, that isn’t likely to happen.

    The small truck segment was in decline prior to the recession.

    Unlike the large truck segment, it has not recovered any share since the bottom of the recession. It has continued to trend downward even after the overall vehicle market bottomed out.

    If you compare 2005 (the market peak) to 2013, a few things are evident:

    -The overall passenger car market (which excludes light trucks, i.e. pickups, vans, minivans, SUVs and crossovers) is basically flat

    -Small trucks, large non-premium SUVs and minivans were hit badly

    -Large truck share is down to a lesser extent, and the buyers who remain became much bigger spenders

    -The small and medium size non-premium SUV/CUV market are up substantially

    -The luxury SUV/CUVs market is up at a level similar to the simultaneous decline of premium sedans

    The small truck market largely didn’t move to larger trucks; it almost certainly migrated into crossover and regular passenger cars. It was doing that prior to the market crash and continued to do so since the crash.

    The recession and leap in oil prices have effectively knocked some people out of the large vehicle market altogether; they presumably downsized. That has resulted in the remaining large vehicle buyers being part of a higher income demographic than before. In essence, pickup buyers now include a large segment of what are de facto luxury car buyers.

    If the Colorado is going to succeed, then it will almost certainly need to pull buyers away from dissimilar segments, such as crossovers and mainstream sedans. These are the segments that helped to clobber the smaller trucks in the first place, so the question is: what possible reason would buyers have to do a 180 and go back to a segment that they bailed on years ago?

    • 0 avatar
      danio3834

      “so the question is: what possible reason would buyers have to do a 180 and go back to a segment that they bailed on years ago?”

      They need to haul some gravel, but not too much gravel.

      • 0 avatar
        Pch101

        With all of the gravel, mulch and refrigerators that need hauling, only a government conspiracy could explain the falling sales.

        • 0 avatar
          Lou_BC

          @Pch101 – play the “conspiracy card”. The domain of the paranoid or desperate.

          Occam’s razor dictates that the simplest of competing theories be preferred to the more complex.

          Chicken tax – that is much more simple an explanation then all of the theories you’ve pushed forward.

          Cue another condescending rant from our resident expert on denial.

          • 0 avatar
            Pch101

            Maybe I should have been a bit more blunt.

            You’re just exceptionally dumb. You’re actually baffled that truck prices went up during a period when the price of everything was going up.

            If truck prices had shot up 23% during a three-year of period of low inflation, then you might have a point. But when you fail to understand that double-digit inflation rates lead to substantial price increases for almost everything, then you’re simply a dull knife in the drawer.

            Instead of replying with another one of your inane comments, you could just type “inflation rate 1980″ or something into Google. Having some research skills might do you some good.

          • 0 avatar
            Lou_BC

            @Pch101 – yawn. The acts of a desperate man.

      • 0 avatar
        Fred

        I could only haul half a yard in my half ton Silverado and my back is still aching after all that shoveling and raking. I could use another half yard to complete the job. I should have paid the extra couple of hundred bucks to have it delivered and get some day workers.

        • 0 avatar
          danio3834

          For sure. Light duty trucks just aren’t good at hauling gravel. A half yard weighs about 3/4 of a ton, and that amount of gravel won’t accomplish much. Heavy, nasty loads are best delivered by the supplier.

          • 0 avatar
            Lou_BC

            @danio3834 – 1/2 tons and small trucks aren’t much good for heavy cargo. In some respects one can argue that a small truck is safer in the hands of the typical wannabe truck owner because the cargo area sets an artificial limit to what can be carried.

            It is the same theory that is used for dieting. We are conditioned to fill our plates so if one uses a smaller plate we train ourselves to eat less.

            Maybe we need to train ourselves to realize that with a big 1/2 ton we do not get big capabilities.

    • 0 avatar

      Maybe having a decent entry in the field will help pull some of those buyers.

      Part of the reason that small truck sales were so dismal is that manufacture’s were selling dismal vehicles, and spending nothing on marketing them. I bought an ’06 Ranger new, and while it was the most reliable vehicle I ever owned, it was also pretty obvious that Ford didn’t really give a shit about them. Stupid cost-cutting things like not having a mirror on the driver’s side sunvisor, only on the passenger’s.

      Having a decent small truck, along with some advertising so buyers know they exist, may help get some buyers to take a look at them instead of, say, a small SUV or crossover. Will it be enough? I don’t know.

    • 0 avatar
      pragmatic

      Small trucks are easier to load (lower bed height), maneuver, park and possibly use less fuel. I would never own a full size (now that they grown so large), but my 28 mpg Ranger does fine with hauling items back from the Big Box stores. Though I realize my marketing niche is quite small.

    • 0 avatar
      krhodes1

      The Colorado is not exactly a small truck. It is the size that big trucks were when I was a kid – except better, as most of those were single cab. I have to think that a “smaller” but not impractically small truck (and I consider a Ranger pretty much impractically small) with an American nameplate and up to date tech will have a lot of appeal to a large swath of truck buyers. It will be a little cheaper, but it is also only a little smaller. But maybe enough smaller to be a better fit for a lot of people? It’s enough for my buddy with the F-150 that won’t quite fit in his garage to want to look at one.

      I said it in another article – I really think that trucks the size of the Colorado will be the future of the “1/2 ton” market. Need more truck? That is what the 3/4 and 1 tons will provide, at current big truck sizes and prices.

      • 0 avatar
        Lou_BC

        @krhodes1 – We’ve seen Ford embrace “One Ford” Global strategy. As long as factors favour full sized trucks we will see the current line of 1/2 tons continue onward. As you pointed out, many are lifestyle choices and that is always subject to whim. Ford could easily bring the Ranger to the USA. The engines going into the Transit are used globally in the Ranger.

        • 0 avatar
          krhodes1

          I would expect that under “One Ford” the Global Ranger and the F-150 will meet in the middle eventually. One will get a bit bigger, the other will get a bit smaller than the current “super-size” truck. The HDs will stay what they are now, probably a lot less high-tech since they are exempt from CAFE for the most part.

  • avatar
    Fred

    I think the big problem is smog and safety regulations. I’m hoping European and Amercian standards can be aligned so that we can share some models easier.

    • 0 avatar
      Onus

      Read up on What the EU is proposing in the Transatlantic Trade and Investment Partnership. They [ EU ] have on their website. On the plus side it seems most sides are pushing to at least recognize each others vehicle standards and actually work together on developing future standards.

      • 0 avatar
        Fred

        Okay, now I know more about trade agreements than I really wanted to. Guess I’m thinking like an engineer, get the technical issues solved and go. Why does politics have to be such a pain?

    • 0 avatar
      thelaine

      +1. Also “carbon” and fuel economy regs should be eliminated.

      • 0 avatar
        Drzhivago138

        Right, because LA was so much better when you felt like you had to wear a gas mask just to go outside.
        And 12 MPG cars were so much better than 30 MPG.

        • 0 avatar
          danio3834

          “1. Also “carbon” and fuel economy regs should be eliminated”

          Those have little do to with the air quality in LA.

        • 0 avatar
          Pch101

          Smog emissions and carbon emissions aren’t directly related.

          Smog can be reduced with pollution control devices such as catalytic converters.

          Carbon emissions contribute to climate change. The only way to reduce carbon emissions is to burn less fuel; there’s no equipment that can be bolted to the exhaust system that will help.

          • 0 avatar
            Big Al from Oz

            @Pch101
            WFT?

            Burning less fuel is reducing BOTH all emissions, and carbon (which is also an emission).

            There is a direct connection to fuel consumption.

          • 0 avatar
            Lou_BC

            @Pch101 – Carbon monoxide as well as hydrocarbons are found in smog. Smog and carbon emissions are related.

          • 0 avatar
            guevera

            Sure, less fuel means less emmissions, ceteris parabis.

            But you’ll see much less smog from a 12/mpg full size pickup with today’s emmissions controls than you would from a 34/mpg subcompact running with no smog controls or even the sort of equipment we had in the 1980s.

            For carbon, that’s not true, the old school ride that gets 34/mpg will put out much less carbon than the 12/mpg ride — the smog equipment does nothing for that.

          • 0 avatar
            krhodes1

            Want to reduce CO2 output? Stop breathing.

          • 0 avatar
            Pch101

            “But you’ll see much less smog from a 12/mpg full size pickup with today’s emissions controls than you would from a 34/mpg subcompact running with no smog controls or even the sort of equipment we had in the 1980s.”

            It’s nice that one person on this thread understands this stuff.

            Smog reduction is a function of technology. But carbon is carbon. Very different animals.

      • 0 avatar
        krhodes1

        @thelaine

        I agree with you – the correct way to regulate the auto/truck market is through gas taxes and/or registration taxes – i.e. on the demand side of the equation. Forcing suppliers to cram change down buyers throats is a route to our current madness. You need to change the demand side. Will probably never happen in the US though.

        This is, of course, completely aside from the question as to whether the Government SHOULD be regulating supply demand at all. Though certainly gas taxes should at a minimum be set at a level to support the road infrastructure, which they are certainly not currently.

  • avatar
    PrincipalDan

    Every dog has his day and then he fades away. Such is the car market for various niches and specialty vehicles. Some declines are long and slow others are more dramatic, some turn on a market (station wagons) and some turn on regulation (hardtops).

    What will be, will be.

  • avatar
    geeber

    I’m confused by this statement regarding the Big Three’s decision to enter the small-car market when it has peaked at various times since the mid-1950s:

    “Each led the Detroit 3 to consider their strategy: enter or not. Or rather, not.”

    GM, Ford and Chrysler did enter the small car market, or roll out much-improved models, when sales in that segment experienced a spurt in growth.

    The sudden growth of Rambler and import sales in the late 1950s spurred the introduction of the Chevrolet Corvair, Ford Falcon, Mercury Comet and Chrysler Corporation Valiant (badged as a Plymouth in 1961) for 1960. They followed up those cars with the Dodge Lancer, Buick Special, Oldsmobile F-85 and Pontiac Tempest for 1961.

    The growth of import sales in the late 1960s resulted in the introduction of the Chevrolet Vega and Ford Pinto for 1971.

    The growth of small car sales after the first fuel crunch led to the introduction of the Chevrolet Chevette for 1976, the Dodge Omni/Plymouth Horizon for 1978 and Ford Escort/Mercury Lynx for 1981.

    After the growth of small-car sales in the early 21st century, both GM and Ford introduced much-improved small cars (Chevrolet Cruze and revamped Ford Focus), while Chrysler reentered the segment with the Dodge Dart. GM and Ford also rolled out the Chevrolet Sonic and Ford Fiesta, which have been slotted below the Cruze-Focus-Dart segment.

    • 0 avatar
      Mike Smitka

      Thanks for the details. I guess in the back of my mind, when the time came that I was old enough to actually make a purchase decision, I really didn’t consider a Chevette or a Lynx competition for a Toyota Tercel or Honda Civic. Now my parents had a Chevette; I helped drive a Pinto to/from Detroit and Boston a couple times. So at least some sold, and I knew they existed. At this remote point I can’t recall specific reasons for not giving them any consideration.

      So I should rephrase my claim: the “don’t enter” strategy would have been better rather than the “all enter” one. I don’t have access to historic sales data, so I can’t hazard an answer, but my hunch is that in each of these cycles the me-too entrants made no money.

      As to whether small pickups will fit these models – including comments that the niche is disappearing – well, I’ll try to remember to revisit this topic one place or another when the Colorado is in its fifth year.

    • 0 avatar
      krhodes1

      They introduced small cars, but they were crap for the most part up until this latest go-round. And this time, they are really just selling “foreign” cars here. There is nothing “Chevrolet” at all about the Cruze, Ford’s small cars are effectively European, and Chrysler’s small cars are based on Fiat platforms. Now I have no problem with this at all, the big 3 truly are GLOBAL companies today. Very different than in the past when they mostly tried to sell scaled down half-baked version of the big cars, like the Chevette, Pinto, and Vega. NIH seems to finally have been banished by Detroit, and good riddance!

      • 0 avatar
        Pch101

        The Chevette was based upon the Opel Kadett. And judging from the Vauxhall variant that I drove for a day, the European version wasn’t anything to write home about.

        • 0 avatar
          krhodes1

          The European version was not a small car, in Europe. It was a *cheap* mid-size car. And it was considered pretty much crap over there too. Then they brought its underpinnings over here and made it CHEAPER. But it was an improvement over the home-grown disaster that was the Vega. Call it a half-step on the way to the Cruze.

  • avatar
    S2k Chris

    There are an impossibly large number of variables and factors to consider. For instance, what is the cost of idling a plant versus keeping it running? What are supplier volume agreements? How much of a vehicle is truly new versus just slight incremental costs? How much of the tooling and other capex has been paid off/depreciated to nothing? And on and on and on. There are likely a lot of vehicles that exist solely because the incremental cost to produce them is minimal, and selling them is hugely profitable relative to other vehicles.

    • 0 avatar
      DenverMike

      The Tundra and Titan are basically what you described, and the only reason they survive are the shared platforms and assembly lines. The Tundra and Tacoma share very few parts, but run down the same assembly line. The Titan and Frontier are very different, but share the same aging chassis.

  • avatar
    Jeff S

    If sharing platforms, components, and even assembly plants means that a manufacturer can provide a midsize truck then I am all for it. Manufacturers have to reduce costs and if reducing development and production costs means that they don’t have to sell as many as the full size then that is good. If cutting down on the number of variations, exterior colors, interior options, and cab choices then that is ok as well. So the Colorado/Canyon only come with power windows, power locks, and come in extended or crew cab at least they are another midsize offering.

    • 0 avatar
      DenverMike

      They’ll probably force a well equipped 4X4 crew cab midsizer, just to stay in the game. But it’s the lack of a true stripper that’s killing the segment’s original mission. Bidding an Adios to fleet, cheapskates and other bottom feeders might be a good thing. Or bite them in the A$$…

      • 0 avatar
        Big Al from Oz

        @Winnipeg Dim or Spanish DiM or LA DiM,
        Can you provide a link supporting your comment.

        It appears even in the US most midsizers are mid to high end that are being sold.

        I could very well state that the purpose of the full size pickup was to provide a ‘basic’ and cheap vehicle for work.

        But, alas, the world has changed.

        All pickups have become SUVs. Who wants a stripped down SUV?

        • 0 avatar
          DenverMike

          @Missing Link BAFO – In my travels, base strippers are most of the midsizers I share the road with. Anecdotal as that is, I don’t see your “link” showing most midsizers are high end, insane as that sounds… That plus all the plain white midsize strippers parked behind industrial buildings, dozens at a time.

          It’s a bit different for fullsize trucks that don’t really attract the cheapskates and bottom feeders that love midsize strippers, all looking for the lowest common denominator of “pickups”. At least on the retail level. With fullsizers averaging around $40K, fleet buyers must me a minority.

          Yes the world has changed, and the chapter is closing on the small truck craze. Except for niche buyers.

  • avatar
    Lou_BC

    @DenverMike – same old song and dance. Like I told Pch101, I’d like to see 3rd party expert proof on your claims.

    The majority of trucks sold by large truck makers and Toyota slot in the mid-level trim crew-cab truck. Those are hardly the domain of cheapskates.

    It will be interesting to follow Toyota sales next year since they are dropping the regular cab truck but those sales may drop not because of the lack of a regular cab cheapskate special but because of the new kid on the block, namely Colorado/Canyon.

    • 0 avatar
      DenverMike

      @Lou_BC – You’re showing the same amount of concrete proof, minus the common sense. With most fullsize trucks selling for about 2X their base price, after rebates, what does that tell you? Hint: All OEMs would be PI$$ING themselves to get into the midsize pickup market if the same was true for midsizers, even at low volume. And low volume is irrelevant with high profits. The OEMs that were in it would’ve certainly stayed in it, if you were right. Don’t cha think???

      • 0 avatar
        Lou_BC

        @Winnipeg Mike –

        “You’re showing the same amount of concrete proof”…. I’d like to see concrete proof from you or Pch101.

        Common sense is just that common.

        Try critical thinking – the results will be superior.

  • avatar
    Jeff S

    With the average transaction price going up on full size pickups you will see less businesses use them as well which maybe in the long run is a good thing. Why buy a loaded half ton pickup for work when you can get a 3/4 to 1 ton pickup for a little more. When you use the comparison of a midsize pickup to a full size half ton for the non business consumer you might as well use the comparison of a half ton full size to a HD truck when you are talking about work trucks. You can also use the argument for buying food in bulk as compared to smaller packages. It depends if you are a consumer buying by the pound or buying what you need which can be the same but not always and not for everyone.

    The days of trucks being an inexpensive and utilitarian vehicle are for the most part over. Trucks have less in common with cars than they have in the past in that most cars are front wheel drive and have smaller engines. Also the profit margins on trucks are much more than many vehicles which was the opposite years ago. As Big Al has stated before trucks are not selling as well as they did a few years ago and their percentage of vehicle sales has actually declined slightly and will continue to decline as the prices rise due to material costs and maintaining larger profit margins. Manufacturers will not have to sell as many to make money.

    For many of the cheapskate businesses as Denver Mike calls them they would be better off going with some of the new vans on the market because they offer more value for the money than even the full size pickups. Most half ton full size pickups have become a recreational vehicle and many see them as another alternative to a V-8 powered muscle car or a full size V-8 powered sedan.

    • 0 avatar
      Lou_BC

      @Jeff S – there is a place for 1/2 ton trucks in the work world. Vans tend to be a better fit for service businesses with multiple “little bits” like Electricians, HVAC, and plumbing. I don’t tend to see many pickups in those fields. Trucks still tend to be the domain of workers who need to carry bulky cargo.

      Car companies have moved pickups to the luxury and family end of the market because pickups as a work only tool is a limited market. That market continues to grow so they will exploit it as long as possible.

      I see a large number of loggers in 80k crewcab diesel HD trucks. Many are not sub-contractors so do not have the same right-offs as a contractor. They chose these trucks because as you said, they aren’t that much more expensive but have more “real” capacity and durability.

      1/2 tons like vans tend to be more suited to urban light duty work.

  • avatar
    Littlecarrot

    @mike Smitka,
    I would add another wave to your historical analysis; the early ’70s. This includes the introduction of the Vega, Pinto, and the Gremlin in “reaction” to the Corolla, Datsun 510 and 1200 and even the Beetle.

  • avatar
    Jeff S

    @Lou BC–Yes there is a place for half ton full size pickups but if we are talking about work trucks for heavy duty use then an HD is a better choice. Trucks are no longer an inexpensive vehicle and the cheapskates that DM refer to are not going to be a truck buyer. Yes you have an open bed in any truck which is good for hauling bulky items but to get in a bragging contest as to which half ton full size pickup can out haul and out tow another is not that important to most. If you need a truck for those purposes and you are going to use it mostly for those purposes why bother with a half ton and just go up to an HD. My nephews have a farm truck that they jointly own and take care of which is a 4 wheel drive F-250. They all have half tons for their urban vehicles but they bought an HD truck for the farm which they use as a farm truck. I have two midsize trucks but if I were living on the farm I would probably have a HD truck as well. There is nothing wrong with any size of truck and you should buy which ever one best suits your needs but to say that one is better than the other just because it is bigger is not accurate. If bigger were better then why not own a big rig tractor diesel. Isn’t a big tractor diesel even more capable than an HD? I am tired of hearing the cheapskate argument. What is a cheapskate? Do cheapskates buy new trucks? Maybe a real cheapskate would not even own a truck but borrow his neighbor’s truck for free. Why pay for something that you can mooch off of someone for free.

  • avatar
    petezeiss

    I’d like to thank Lou_BC for stepping up and giving Vulpine a breather on this thread. That was nice.

    I just hope Vulpine is actually resting and not out there shoveling more gravel.

    • 0 avatar
      Lou_BC

      @petezeiss – I’ve owned every size of truck. I buy based on what closest fits my wants and needs. I’ve owned small trucks, 1/2 ton and HD trucks. I had an F250 for 15 years.

      I don’t agree with everything Vulpine says and he obviously can speak for himself.

      The chicken tax is a factor in shaping the USA truck market especially the small truck market.

      There are some who do not chose to see that and labeling me as a small truck Jihadist is a convenient out.

      The excerpt I posted and the Law Review paper that it came from clearly explains how the Chicken tax affected the small truck market.

      What I have posted isn’t driven by a desire to drive around in a tribute to the 1971 Ford Courier.

      Whether or not you like it, tariffs have shaped the market. Changing needs and desires, lack of R&D, excellent large trucks, price, fuel economy, culture, fuel prices etc. all have shaped the market.

      I have no problem with any of that but some are afraid to admit that protectionist measures have shaped the USA landscape.

    • 0 avatar
      formula m

      @petezeiss +1, well said!

      • 0 avatar
        petezeiss

        Thanks… I was just recognizing extraordinary effort from a couple of … er… stalwarts. Yeah, stalwarts :-)

        • 0 avatar
          Lou_BC

          @petezeiss – Not going there cuz I just don’t care.

          Apathy is why we have shitty government.

          “Tarr and Morkre (1984) estimate annual costs to the U.S. economy of $12.7 billion dollars) from all tariffs and from quotas on automobiles, textiles, steel and sugar.
          Their cost estimate is a net measure in which the losses of consumers are offset partially by the gains of domestic producers and the U.S. government.
          Estimates by Hickok (1985) indicate that trade restrictions on only three goods – clothing, sugar, and automobiles – caused increased consumer expenditures of $14 billion in 1984. Hickok also shows that low income families are affected more than high-income families. The import restraints on clothing, sugar and automobiles are calculated to to equivalent to a 23 percent income tax surcharge (that is, an additional tax added to the normal income taxi for families with incomes less than $10,000 in 1984 and a 3 percent income tax surcharge for families with incomes exceeding $60,000.”

          http://msuweb.montclair.edu/~lebelp/CoughlinTrade1985.pdf

  • avatar
    Jeff S

    @Lou BC–Not only would the cheapskate want to borrow my truck at 3:00 am but would expect me to help him carry his junk off.

    You are correct in that if the customer is going to choose the full size pickup anyway then why do we need a Chicken Tax to protect a market that does not need protecting? I think the manufacturers still want the extra protection that this tariff gives them to protect their market. A true free market should be able to handle more than one size of pickup just as it can handle more than one size of car and cuv. If the only way a smaller truck can be cost effective and competitive is to import it then let the market determine that without any protective barriers.

  • avatar
    Duaney

    Good grief, such comments! The evidence is when small trucks were available, they sold like hotcakes. Today a very good condition Isuzu Pup diesel will sell for $5-$8 thousand, a beater sells for $1500-$2500. The demand is there. I drive a Chevy Luv (same as Isuzu Pup), get 35 MPG, it’s easy to park, steer, handle, why do I need a gargantuan beast to haul my small loads? I’m certain that little trucks would sell and could sell profitably.

    • 0 avatar
      matador

      I don’t know about new sales, but I have a 1992 Dakota. I’ve owned it for four years. My thoughts:

      It’s a regular cab long bed 4×4 with the 3.9 V6 and 5-Speed manual. I’ve hauled 1500 pounds in it a few times. That’s the same amount that my F-150 and Chevrolet R10 can haul. The Dakota does it well. I’d love the 318 for heavy loads, but the 3.9 is a great engine in that truck. With the gearing in there, the Dakota will run the same pace as my 1/2 tons.

      It’ll get 23 MPG on a good day. I usually expect about 20 while loaded. That’s better than my other truck’s will do.

      It’ll drive much nicer. My F-150 handles terribly, and the Chevrolet is actually a comfortable vehicle to drive. The Dakota is better, though. It feels as comfortable as a car. I can park it easily, and it doesn’t feel like I’m at the helm of a ship. It’s nice.

      That’s what I want. A truck that can do “truck stuff”, and that doesn’t have the handling characteristics of a Carpenter school bus.

      Somebody go make that! I bet there’s a market for it. With the EcoDiesel or similar, it could be a cool vehicle.

  • avatar
    matador

    Niche markets can work well… for the first and maybe second player.

    You’re catering to a small crowd. Once they’re pleased, you have problems. I think it would be a giant risk to play the “Me Too” game.

    “If you are the sales leader, or the number two player, you’re usually fine.” That’s a rephrasing of a quote from the leader of Allis-Chalmers, an agricultural and industrial company that was usually third or fourth in sales. Ask a farmer how they turned out. Don’t know a farmer? Look at Chrysler and American Motors. AMC was too weak to stand. Chrysler’s been bought out many times.

    Sales are the key. Why sell to a select few? You can propose a car to get people in the showrooms, but you need volume movers or you’re dead.

    I’m glad that Buick made the 1995 Riviera. Buick’s accountants should be glad that they made the LeSabre.

    Same thing here. Wow us with your Riviera. Show us what you can do. Make our jaws drop. But, count on us to buy a different car. If you’re lucky, it may be one of your models.

  • avatar
    Jeff S

    AMC’s problems were not from making smaller cars, their problems were from trying to make a larger car that was competitive with the Big 3. AMC did well with the Rambler American but not so well with the Matador or the Javelin. AMC spent a lot of money on developing the Pacer but in the end could not get the GM V-6 that it planned to use and the car was not the success it had hoped it would be leaving AMC with less funds to develop newer products. A smaller manufacturer that could import a smaller truck and some smaller utility vehicles might do well enough especially if their costs are low and they could price their vehicles competitively.

    The safety and fuel standards make it much harder to produce a compact truck similar to those of the 80’s and early 90’s. For now at least the midsize trucks are closer to the compact trucks of the past than the large half tons.

    As for Allis-Chalmers again they could not compete with IH or John Deere on the larger tractors and combines. Its harder for a smaller company to go upstream in a field dominated by larger competitors unless they have a unique product. It would be harder for Tesla to compete with GM, Chrysler, MB, and BMW if they came out with a rear wheel drive V-8 powered luxury sedan than with their electric vehicles which even then is hard enough.

    • 0 avatar
      matador

      The Pacer was designed for a rotary engine that the plug was pulled on. It could have been a contender with the rotary, but who knows?

      AMC’s large dinosaur-killers went south with OPEC real quickly. Money was spent to make the Ambassador larger- just in time for OPEC sanctions. The Matador sedan was neutered with its awful front styling. The police version failed- Plymouth outdid it. The coupe was cool-looking, though- at least in my eyes. The Eagle was ahead of it’s time, but the bodywork was basically a Hornet Sportabout. Compared to an Audi 5000 wagon or a Subaru, it probably looked out of date (Though I never liked the slab-sided Subarus, either).

      —————————————

      Amen on the safety standards. They seem to bloat things up. Look at the Toyota Tundra, though. The first ones in 2000 seemed to be Dakota-sized. The new ones are larger than my F-150 is. I think there’s a demand for something that’s Dakota-sized.

      Allis Chalmers didn’t really fold, though. Deutz sold them back to the management, renamed “AGCO”. AGCO then went on a buying spree- White, New Idea, Massey Ferguson, Challenger, and others. Allis-Chalmers was just “another brand”, though. I’ve used a Gleaner, and thought it was a nice machine- and easier to fix than our Deere 6600. But, more 6600s were sold. That’s the nature of the beast. It wasn’t different enough to most people.

      Niche stuff can work well, or it will fail big time. But, the “Me too” strategy doesn’t often work too well. I’d like to see more specialty companies filling niches. Tesla can’t compete with the Volt or Prius plug in too well, but the niche for fast electric cars- they own it.

      • 0 avatar
        NoGoYo

        I don’t think AGCO still sells orange AGCO tractors in the US any more, so I guess in America at least Allis-Chalmers is dead.

        At least Case still calls the tractors Case-IH and paints them in a dark red color that both Case and IH used in the 80s. I’m not a fan of them buying Steiger and not keeping the classic Steiger “neon” green though.

        • 0 avatar
          matador

          The orange AGCO tractors were phased out in the USA by 2011 according to Wikipedia. I don’t know about elsewhere.

          IIRC, they shared a lot of parts with Masseys, though, so they may not have been a “pure” Allis. I think it was kind of like the White tractors- the late 90s ones looked a lot like a Massey with light grey paint! They were a lot different than our 2-105.

          ——————

          John Deere has really been the only tractor manufacturer that I can think of to have avoided a buyout at some point. Kudos to them. I can’t afford the green paint, though.

          —————–

          I always liked the Eagle. It just seemed kind of cool- a station wagon on steroids, if you will. Some day, if I ever end up with money to lose (Yeah, right!), I’d like to work on an old AMC. Any of them would work for me- they seemed so fun and quirky if you will.

  • avatar
    Arthur Dailey

    Now that China is the world’s largest market for new cars. And with the rise of ‘global platforms’ based largely on European specs, can we not say that the American market is becoming a niche market?

    The recent demise of North American full sized, light duties vans may be indicative of this.

    Most of the rest of the world does not want a full sized 1/2 or light duty pick-up or an SUV the size of a Suburban. European spec vans are now becoming the norm in North America.

    Will the U.S. in upcoming years see their market flooded with the small wagons, luxury hatchbacks and diesel engine autos that most of the rest of the world buys?

    • 0 avatar
      Lou_BC

      @Arthur Dailey – with the exception of GM, vans have all gone Euro. Most domestic cars are European as well. Trucks and muscle cars are the only bastion of US based design and style left with the caveat that the Mustang has been tweaked to appeal globally.

      We will see harmonization with the EU through FTA’s and eventually we will see it with Asia.

  • avatar
    Occam

    “A pyrhhic victory is all too likely: the Colorado does well and others enter, and all GM sees is red. There’s another downside risk, too: even if others don’t mimic GM, if the does Colorado too well it can cannibalize fat-margin Silverado sales.”

    And this is why generic, mass market cars will always succeed, and niche vehicles are prone to failure.

    There’s really only room for so many soft-top 4x4s. The Suzukis, Geos, Isuzus, and even Kias of yore are gone, and only the Wrangler remains. The S2K, Sky, and Solstice are gone, and there’s only really room for the Miata. The toaster box market swelled with the likes of the xB, Element, Cube, and Soul… it looks like only the Soul will remain.

    If automakers would stop rushing to coopt their competitors niches and build out their own… what a world of vehicle choices we’d have. So far (other than the short-lived Rondo), nobody has really tried to jump in the Mazda5 Micro-van fray. If all the autmakers had jumped into that market, they’d all have fallen short of their goals, and all likely have scrapped them because “they just don’t sell.”

    Even the small-midsize coupe/entry level sports car field seems to suffer the same. Ford cranks out Mustangs year in and year out. Honda does the same with Accord and Civic Coupes. Other small two-doors seem to just fade away, with automakers complaining that nobody wants them.

    • 0 avatar
      Vulpine

      I am 100% behind this concept, Occam. Let each brand build what it does best and stop trying to horn in on another brand’s successes. Sure, sometimes it’s the later one that ends up with the better product, but it’s not all THAT common. The different brands need to stop trying to be all things to all people and stick to whatever they do best for their customers.

  • avatar
    Arthur Dailey

    “The short lived Rondo” is alive and kicking everywhere else in the world except the USA. Other ‘micro vans’ sell reasonably well throughout the world including the C-Max.

    The US market is an anomaly, a niche that has lost its pre-eminence.

    Automakers have demonstrated that they can exist comfortably and profitably without having a US presence.

    Eventually as Lou-BC noted the US only models may go the way of Australia only models.

  • avatar
    Lou_BC

    @Arthur Dailey – HD pickups are unlikely to change but we may very well see an evolutionary change where global and domestic light duty pickups will merge into one.
    The Mustang is evolving to a globally accepted platform.
    The Camaro is a reverse engineered Holden product.

    C

    • 0 avatar
      RobertRyan

      Lou_BC,
      First new model Camaro was engineered in Australia,some design alterations done as well, Remember Dale Earnhardt Jrr drove it around roads in Victoria, before it’s official US release

  • avatar
    Jeff S

    @Lou BC–That is exactly what will happen. The full size half ton trucks will get shorter in the front and the global trucks will grow. All of the sudden you will have the new American full size truck, sized for the World.

  • avatar
    Jeff S

    @matador–My grandfather was a big Allis-Chalmers fan. The last two tractors he had were a 1952 which was smaller and the front wheels could be adjusted out to the same width as the rear wheels (great for tobacco cultivating) and he had a 1962 Allis that was larger to pull combines and other equipment. My grandfather got one of the last tow behind Allis-Chalmers combines in 1967 which was originally destined to go to Europe (he had a hard time finding one because most combines had already gone to the large ones with their own power). I also remember bailing hay and straw with his New Holland square bailer. As for the Pacer you are correct I remember the Wankel and GM was planning on using it but they decided not to use it or share it with AMC. The Eagle was a pretty good vehicle but by the time it reached the market it was too late for AMC. The picture of the AMC wagon above is the same green color of my college roommate’s 68 Rambler American station wagon just add a white top. I knew a few guys in college that had old Rambler Americans.


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