THE HEAVILY competitive, and highly lucrative, truck market is likely to be a bit more competitive this year. New truck platform rollouts by GM and Toyota are being watched with great interest. And although these new vehicles aren't likely to gobble up Ford's leading share of the half-ton truck market, there's a good chance these new entries will take a big bite out of the truck market pie.
The heavy-duty truck market is one of the more stable vehicle segments. Approximately 2.5 million trucks in the half-ton, three-quarter-ton and one-ton categories are sold each year — a total that varies only slightly on a yearly basis.
“For working truck buyers, there isn't any substitute,” says Alex Rosten, manager of pricing and market analysis for Edmunds.com. “That's why we see this segment remaining very stable from year to year.”
And along with SUV production, heavy-duty trucks have high profit margins for manufacturers.
This year should be especially interesting, with long-time leader Ford (and its highly popular F-series trucks) getting a serious challenge from new Silverados and Sierras from GM and an all-new Toyota Tundra.
Brand-loyal truck buyers should keep the Big Three automakers among the sales leaders. But Toyota's goal of selling 200,000 of the 2007 Toyota Tundras, double its 2006 goal of 100,000, while bold, isn't out of reach, analysts say.
Haig Stoddard, automotive analyst for WardsAuto.com, says, “There will be enough interest in the new Tundra to move buyers from a traditionally brand-loyal segment. Toyota has slowly built its reputation for quality products over the years. Even though previous generation Tundras were not competitive with the Big Three, Toyota always made its sales projections.”
In a steady market, there will be losers. Analysts agree that Dodge Ram and Nissan Titan have the most to lose. “The Dodge Ram platform has been around for awhile, and there's nothing new on the horizon,” Rosten says. “In this market, the newest product gets the most looks.”
Stoddard doesn't see any major shifts in market share but agrees that Dodge Ram could be a big loser. “Ram is well along in its current production cycle,” he says.
He also doesn't paint a rosy picture for Nissan's Titan, “partly because it does not have the name recognition and partly because someone considering a Titan is also likely to be strongly considering a Tundra.”
Truck buyers in this segment also are becoming more savvy buyers, looking for the most value and most options for the money, regardless of brand. “That's where Toyota could pick up some additional sales,” Rosten says. “The Tundra is offering a lot of truck for the money. And Toyota's reputation for quality and fuel economy could sway fleet and commercial buyers.”
Stoddard says that 2007 should be a buyer's market, but don't look for any blowout deals. “Total industry demand is expected to be flat. You're likely to see some discounting, but not as much as we've seen in years past,” he says. “The Big Three automakers are seriously weaning themselves from relying on incentives and are using production cuts to control inventory. Ford has already slated production capacity cuts for the F-series.”