Pickups Carry Detroit Three’s Fight to California

LOS ANGELES – Jeff Steves, owner of Steves Chevrolet Buick, is having a good year. Silverado pickup sales are up about 12% at his dealership in the central California town of Oakdale, and the high-margin luxury trim models, which can go for $65,000, are the most popular.

“They want high-shelf,” he says of his customers, who include a lot of almond farmers.

The California new-vehicle market long has been dominated by import brands. But the Detroit Three automakers have started to make inroads. Rising pickup sales are the driving force behind those gains.

The Detroit Three “never had losses in pickups,” says Tom Libby, manager-loyalty solutions and industry analysis at IHS. “They don’t have the challenges they have in cars, (because) their customers never shifted to the Asian brands.”

Based on California New Car Dealer Assn. registration numbers for the first six months of 2015 – which do not include fleet transactions – Ford-, General Motors- and FCA-brand vehicles rose 14.4% compared with the same period in 2014. Import-brand registrations, including German, Japanese, and Korean nameplates, rose 10.4%.

Topping registrations in the light- truck segment, which includes SUV and CUV models, was the Ford F-series, which handily defeated popular import models such as the Honda CR-V.

Chevrolet’s large-pickup sales in California are up 27% through July, including an 11% rise in top-of-the-line LTZ models, according to GM.

Chevrolet is “really capitalizing” in California on its four Special Edition Silverados – the Midnight, Custom, Rally and Blackout, says Dale Sullivan, regional director-Chevrolet for the Western Region. “Everything we produce right now goes in and goes out.”

Both the fullsize Silverado and midsize Colorado pickups are conquesting Toyota owners at significantly higher rates in California than nationally, Sullivan says.

He credits the “Shattering Perceptions” advertisements with boosting awareness of the Chevrolet brand in California.  Dealers here also are more supportive of the Chevy brand than they used to be, says Sullivan, and are down to less than 60 days’ supply.

Luxury trims also are driving F-Series sales in California, says Doug Scott, truck group marketing manager for Ford. “It wasn’t an accident that we did the reveal for the F-150 Limited in California,” he says.

The Limited launch, held in the swanky coastal enclave of Newport Beach, highlighted the model’s standard quad-beam LED headlights, technology package including lane-keeping system, 360-degree camera system and dynamic trailer hitch. Oh, and a laser-engraved VIN plate on the center console.

In other trims, Californians buy more V-6 engine-equipped F-150 models and more diesel heavy-duty models, plus a higher mix of super-crew models than the national average, Scott says.

At Galpin Ford, the world’s largest Ford dealership, the highest percentage of its pickup sales carry the top-of-the-line XLT package, says Eric Ragland, the dealership’s sales manager. Those can carry a $48,000 price tag.

His customers are just using the pickups as a family car, he says. “For the most part, people are just throwing some plants in the back, taking their kids to soccer games and stuff like that,” he says.

FCA Ram-brand registrations are up 20.3% in the first half of 2015, according to the California New Car Dealers Assn. FCA credits the industry-leading fuel economy of its Ram 1500 EcoDiesel as helping drive its California sales. Diesel is lower-priced in California than gasoline, so “Ram offers a lot more value with a truck purchase,” Kevin Metz, head of Ram pickup marketing, says in an email.

The trend of the Detroit Three gaining market share in California through pickup sales is likely to continue.  Employment is rising and, with it, income growth. Housing starts are strong.  All of that bodes well for pickup sales.

“When you see housing bounce back in California, you see pickup sales go up,” says Ian Beavis, chief strategy officer at AMCI Global, a marketing consultancy.

Of course, the import brands aren’t standing still. Toyota and Nissan both plan new pickup model launches this year, says Beavis.

But the domestics have their own import-crusher plans.

Ram recently launched the Ram 1500 Rebel, which comes standard with larger tires, air suspension, a factory lift kit and “unique” interior package, Metz says. “It will be a hit in California,” he predicts.

Chevrolet will introduce a diesel version of the Colorado later this year, and “that will gain us a little more attention,” Sullivan says. As for the Silverado, he adds,“We are not going to stand still.”