Could small pickups make a comeback?

March 21, 2013

Compact-trucks-300In terms of vehicle segments that have seemed to have withered on the vine in the last decade, one of the most obvious is small pickups. There was a time, in the 1980s and early 1990s when compact trucks were huge sellers in North America and good earners for dealers, both domestics such as the Chevrolet S-10 and Ford Ranger, and also Japanese models from the likes of Isuzu, Mazda, Toyota and Nissan. Today however, small trucks are all but gone from the market, driven away by buyer preferences for larger trucks and the proliferation of more fuel-efficient full-size models.

The last true example of the compact truck, the Ford Ranger, ceased production in 2011. And while the Toyota Tacoma and Nissan Frontier live on they aren’t really compact trucks, certainly not in the true sense. Ford has repeatedly said that it doesn’t have plans to replace the Ranger in North America, however with rising fuel prices, its cross town rivals are taking a different approach. General Motors will be introducing new Chevrolet and GMC small trucks in 2014, while Chrysler is looking at a new truck to replace its mid-sized Dodge Dakota.

One of the major issues concerning smaller trucks, much like smaller cars is the amount of money an automaker can earn on each unit. A recent article by the Wall Street Journal highlighted the fact that OEMs on average earn about $7-$10,000 on each full-size pickup they sell, while on smaller offerings its about $3-$4,000 (based on estimates provided by Barclays Capital).

Mark Reuss, GM’s North America president was recently quoted as saying that “we believe there will be a growing number of pickup truck buyers in the future that will want fuel economy.” If that proves true and gas prices continue to rise, then the resulting market conditions, in conjunction with tougher Corporate Average Fuel Economy standards, could provide the ideal catalyst to spur interest and demand for smaller trucks, much like they originally did back in the 1970s.

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