Ford Confident in Pickup Path

DETROIT – Ford is unfazed by the recent accomplishments of its pickup competitors, including General Motors’ Chevrolet Colorado winning 2015 Motor Trend Truck of the Year and the Ram EcoDiesel’s new-and-improved 29 mpg (9.7 L/100 km) highway fuel-economy rating.

Doug Scott, Ford’s truck group marketing manager, says the Colorado midsize pickup is in a segment that is one of the smallest in the industry and shows no signs of significant growth. It’s for that reason that Ford pulled its midsize offering, the Ranger, in 2011.

“You have to separate awards from success in the market place,” Scott tells WardsAuto on the sidelines of the 2015 North American International Auto show here. “Success in the marketplace is sales and satisfying customers, and there are no comparisons in the volume.”

According to Scott, midsize pickups represent less than 2% of the industry, while the fullsize segment accounts for 13%.

“So I think the customer is voting every day when they walk into the showroom and recognizing that a fullsize pickup, ours and the competition, is a better value than a midsize truck,” he says.

According to WardsAuto data, in 2014 midsize pickups held a 1.5% share of the U.S. market, while fullsize pickups held a 12.2% share.

Ford has said it won’t be bringing the current version of the Ranger, now sold in international markets, to the U.S. because its price point would be too close to that of the F-150 fullsize pickup.

Scott also pours water on the Ram 1500 EcoDiesel’s 29 mpg rating. The fuel economy can be achieved on a new 1500 model called the high-fuel-efficiency package, which will be available on the Tradesman Quad cab four-door and Ram Express models.

He says the high price of diesel fuel, currently averaging $2.98 a gallon in the U.S., eliminates any cost savings associated with the higher mileage, particularly when a gallon of gasoline now averages $2.11, according to the American Automobile Assn.

“Today there is a $0.87 price difference between diesel and gas and if you take that differential and combine it with the price for that diesel model of $4,770, there’s no payback,” he says. “Twenty-nine mpg is great, but it’s not great when I have to pay $1.00 more a gallon for the fuel. I can’t cover my upfront investment or my ongoing investment in higher fuel.”

Ram CEO Bob Hegbloom disagrees with Scott’s assessment, telling WardsAuto that historically diesel fuel has been priced about 10% higher than gasoline, and he believes prices eventually will return to that level.

Additionally, he says diesels are a good value because they offer higher residual values than gasoline models.

“Resale values were 8% greater than equivalent gasoline powertrains,” he says, noting the average transaction price of a fullsize pickup is $44,000. “Today that (resale advantage) is up to 10%.”

Scott also says the actual take rate for the Ram EcoDiesel is far below the 20% Fiat Chrysler executives have stated.

“They’re talking about getting to 20%, but their actual sales rate is 7% of the mix,” he says.

Hegbloom says the current take rate is about 10%, but demand for the diesel has been so great Ram has increased capacity and the 20% take rate is expected when the additional volume is available later this quarter.

“We haven’t seen demand slow,” he says. “We’re really proud of this.”

Meanwhile, Scott says the ongoing rollout of the all-new aluminum-intensive ’15 F-150 is on track. Ford’s Dearborn, MI, truck plant is churning out the trucks at about 60 jobs an hour, and its sister Kansas City, MO, facility is undergoing equipment changeover to accommodate production of the new truck.

“Kansas City built the last ’14 model on Dec. 22,” he says. “They will begin shipping trucks by mid-March.”

Scott says the sell-down of the ’14 model will be complete in late summer or early fall, adding dealers are happy with the new pickup, which is turning in just five days.

“They’re over the moon,” he says of Ford’s dealer body.

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