New Small Pickups: More Than Just Fuel-Economy Play

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Back in the personal-use heyday of 1990-2006, pickup trucks captured 18% of LV sales, inspired by a “suburban cowboy” buying mentality that drove sales in both the Large and Small Pickup segments. The strong economy, with robust housing starts, also drove Large Pickups to record levels.

At the same time Small Pickups held their own and helped overall pickup sales average more than 3.0 million units annually from 2000-2006, confirming there is room for both segments. Then the bottom fell out of the market. Pickup sales were hurt significantly, with sales coming in 1.0 million units below the peak.

Unfortunately, pickup sales have continued to lag as the economy recovers. Economic growth has not been strong enough to pull Large Pickups above the 2.2 million-unit level established in 2006. To date, Large Pickups have the lowest growth among all light-truck segments, and demand does not appear to be influenced by a shortage of supply (only Ram has a days’ supply lower than 100).

Small Pickups also have suffered the same fate, but their performance also has been influenced by the number of entries that have dropped out of the market. Today, only the Toyota Tacoma, Nissan Frontier and Honda Ridgeline are in the market, leaving sufficient room for the two new ʼ15 entries General Motors just introduced, the Chevrolet Colorado and GMC Canyon. These two models alone are enough to push the segment’s sales performance above 350,000 units next year.

GM’s strategy goes way beyond fuel-economy standards. Given the overall competitive position of the new Colorado and Canyon, there is a strong potential to reinvigorate competition in the segment – and generate more sales. Additionally, the export potential of GM’s small pickups could be significant, most likely dependent upon the dollar exchange rate. Overall, the 2-segment strategy will be a win-win for GM pickup sales.

Competition won’t ignore this chess play. Look for Ford to follow suit with a new Small Pickup in two years, supplementing a light-truck fuel-economy strategy driven by the new F-Series fullsize pickup. Additionally, the Japanese manufacturers already in the sector are here to stay, and their products will improve.

Moving forward, each company’s pickup strategy will be influenced by fuel-economy standards, but of equal importance is the ability to generate additional sales, and that comes only with innovation and diversification.

It’s working in the SUV segment and will work in the pickup sector as well.

Warren P. Browne is president of WP Browne Consulting and has extensive experience in the global automobile industry. During the past 20 years, he has held senior executive positions at General Motors, including in Brazil, Poland and Russia. He currently serves as an adjunct professor of economics at Lawrence Technological University.