Commentary: Could There Be More Mid-Sized Pickups?

2015 Chevrolet Colorado
Photo by Randy Stern

The 2015 Chevrolet Colorado and GMC Canyon are arriving at dealerships shortly. Can we get an Amen?

General Motors' new mid-sized pickups will join the Toyota Tacoma and Nissan Frontier as in this once neglected segment. The latter two had been holding on in the face of the rise of the full-sized and heavy duty pickup. It does not help that Nissan and Toyota offer full-sized models. Luckily, in the case of the Frontier, the Titan has been running last in sales for its segment, while the mid-sized truck is selling at a higher rate than its larger cousin. At Toyota, they sell equal numbers of Tacomas as they do the full-sized Tundra.

Now that GM has returned to segment, many analysts are watching the mid-sized truck market concluding that there is a potential for segment growth in North America. But, is that summation for certain? Or, are we going to be disappointed?

On our Facebook, V&R asked our fans whether they think the new Colorado/Canyon will succeed. We also asked that if the conditions were favorable whether they would like to see other mid-sized trucks compete against GM, Nissan and Toyota?

There were some opinions expressed towards the potential of growth and the possibility of segment expansion. Yet, there are some considerations to understand.

Based on some realistic data, the best result for the Colorado/Canyon is to sell at the same volume as the Tacoma – 10,000 units a month of Chevrolet and GMC combined. A more measurable result would be if GM's mid-sized trucks sales are actually eating into full-sized volumes. This would also include conquests from Ford, but most likely it would come from within the ranks of GM owners.

If sales reflects either conquests from full-sized truck owners or new truck owners, there would be some from of reaction from other OEMs. Possibly, Ford may have to revisit their mid-sized truck project. There were actually two – one based on the global Ranger sold in other markets outside of the USA and Canada and another that would be based off of a scaled down F-Series frame. In the interest of cost, continuity and market consideration, the short term fix would be to import the Ranger and get it to specification for the USA and Canada. The flip side of doing is do would be to import these units from South Africa and deal with the impacts from the Chicken Tax – the 25% tariff imposed on light trucks imported into the USA. The Ford Ranger is also built in Thailand and Argentina.

Expansion in the mid-sized pickup segment would also mean that Mitsubishi and Volkswagen might join in with current products they sell elsewhere. Mitsubishi could use some critical product in their North American showrooms. The Thai-built Triton pickup would be a welcomed addition to this market, if they can sell at volumes at least equal to the Nissan Frontier. The Chicken Tax is going to be an issue, but for the sake of the showroom, Mitsubishi may have to explore this possibility carefully.

The one brand that may be a bit hesitant to jump on this expansion would be Volkswagen. They have a product that would fit against the current mid-sized truck offerings – the Amarok. The specs seem right for the market, but the problem persists on dealing with the Chicken Tax and to choose which plant would supply USA- and Canada-bound Amaroks – Germany or Argentina.

There are advantages to adding Ford, VW and Mitsubishi to this segment. GM will be equipping some of their Colorados and Canyons with a Duramax four-cylinder turbocharged diesel engine. Considering the success of the EcoDiesel-powered Ram 1500, there is a business case for these mid-sized trucks to offer a diesel option. That is as long as Ford, Mitsubishi and VW would offer a choice of a regular gasoline engine to sell alongside it. Ford would have an easier time with this even if they had to ship these engines down to South Africa for installation – especially a V6.

There is a buy-in for a mid-sized truck. The growth in the pickup segment is coming from leisure or mixed-used consumers. While the modern pickup offers a lot of amenities as with regular automobiles and SUV/crossovers, there are capabilities that only meet the qualifications of owners that actually utilize their trucks for.Not to mention a concern about driving dynamics and maneuverability that an average car owner would find too cumbersome.

A recent study shows that a truck owner is ready for a good mid-sized truck, but want something substantial in feel and capability. But, can you get a Colorado with the same towing, payload and GVWR ratings as you would a Chevrolet Silverado half-ton crew cab with the 5.3 EcoTec IV V8? The truck consumer would have to look very carefully at these numbers of the Colorado, Tacoma or Frontier they are considering.

We can speculate to death on how the Colorado/Canyon could effect overall pickup truck sales. However, the proof will be on how GM and their dealerships selling these two pickups will deliver on the promises they will make on them. It is best to watch the sales numbers for pickups very closely over the next 12 months.

If it all goes well, we could see the renaissance of the "small" truck – even if they are just a tad smaller than their high volume, high profit cousins.

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