U.S. Loves Big Pickup Trucks, But Japanese Brands Struggle

August 05, 2016 by Tiffany Hsu, @tiffkhsu

The full-size pickup truck is a staple of Americana, representing its can-do spirit and the rugged outdoors.

What it’s often not is Japanese.

Although Asian automakers rule the sedan scene, they’re responsible for a tiny fraction of the full-size pickups sold in the U.S. and have never landed a model among the top three.

“They’ve been around for a long time,” said Dave Sullivan, manager of product analysis for consulting firm AutoPacific Inc. “But they’ve always been the afterthought.”

Nissan Motor Co.’s Titan model and Toyota Motor Corp.’s Tundra have never come close to the sales levels of their rivals from Detroit — Ford Motor Co., Fiat Chrysler Automobiles and General Motors Co. — even though both have been selling their big trucks for more than a dozen years.

Robot's assemble truck beds at Fiat Chrysler Automobile's truck factory in Warren, Mich.

Robot’s assemble truck beds at Fiat Chrysler Automobile’s truck factory in Warren, Mich. (Photo: Jerry Hirsch/Trucks.com)

That’s left a hole in the U.S. sales of Japanese brands. Through the first seven months of this year, Japanese branded full-size pickups accounted for just 6 percent of the of the nearly 1.3 million trucks sold in that segment this year, according to Autodata Corp., an industry research firm.

Japanese automakers are missing out on a hot sales trend. Sales of full-size pickup trucks have grown at a 5 percent rate so far this year compared to the same period a year earlier. Passenger car sales have fallen by 7.7 percent during the same time period, Autodata said.

Even though the Japanese brands make their big pickups in the U.S., their sales efforts are stymied by the preferences of customers who have become bonded to their truck brands through years of tradition.

“You might have a friendship, but they have a truckship.” said Alexander Edwards, president of consulting firm Strategic Vision Inc.

The vast majority of truck drivers are male, married and middle-aged, though patrons of domestic brands skew a bit older, according to industry data. While buyers of Japanese truck brands are slightly more diverse ethnically, most full-size pickup buyers are white.

“They’re more often conservative folks — from the way they do their finances to the way they vote politically — and are less likely to change when they have a good thing,” Edwards said.

Often, drivers have been weaned on American trucks for generations. Two of three people who retire a Ford truck buy another Ford. Overall, more than half of repeat owners of American pickups return to the same brand. At Nissan, that’s less than three in 10.

“These are the most steadfastly loyal customers you could ever imagine,” said Larry Dominique, an industry consultant and former vice president of product planning at Nissan North America. “These aren’t full-size pickup truck owners — they’re Ford F-150 or Dodge Ram owners who wouldn’t even consider a Chevy if they already owned another brand.”

Ford 2017 F-series Super Duty trucks tested by the automotive media near Denver, Colo. (Photo: Jerry Hirsch/Trucks.com)

Ford 2017 F-series Super Duty trucks tested by the automotive media near Denver, Colo. (Photo: Jerry Hirsch/Trucks.com)

As for the Japanese labels?

“They’re not even on these drivers’ radar screens,” Dominique said.

Take Dick Caley, who bought his first half-ton, two-wheel-drive Silverado in 1967. The Long Beach real estate agent, 65, has also owned one Ford and one Dodge truck but, for the most part, is a Chevy guy.

His love of pickups stems from repeated moves when he was younger and the truck’s ability to haul and tow camping gear, bicycles, boats, signage and more.

“It just fits my lifestyle,” he said.

He said he’s occasionally looked at Japanese trucks but each time decided he “didn’t need to take a risk.”

His daughter drives a hand-me-down Silverado with 350,000 miles on the original engine and transmission. He’s getting ready to swap out his current Silverado, which he purchased in 2007.

“Unless there’s something really spectacular with the Ram, I’ll probably just go back to Chevy,” he said. “I drive them a lot of miles, and with just minor, normal maintenance and repair, why would I want to change?”

Pickup trucks are a coveted business for automakers. Even Tesla Motors Chief Executive Elon Musk wants in, revealing recently that he plans to add pickups to the suite of vehicles the electric car company already produces.

Like passenger cars, the trucks require substantial investment — raw materials, equipment, factories, labor. But less competition means that automakers can charge much more for pickups.

“The full-size truck segment is more than 2 million units a year,” Dominique said. “It’s too big of a market, too profitable a segment to ignore.”

US Pickup Truck Sales Jan-July

Demand is only rising. The housing market is strong and fuel prices are down.

And now, there’s a bit of pickup pushback coming from Asia. Nissan, which currently holds less than 1 percent of the full-size market, is aiming for a 5 percent share, which would require it to sell roughly 100,000 trucks a year. The company has barely sold 7,000 Titans so far this year.

By comparison, Ford sold 460,901 F-Series trucks from January through July, according to Autodata Corp. GM sold 327,768 Silverados and Fiat Chrysler Automobiles sold 271,232 Rams.

Nissan is currently partway through an extended Titan and Titan XD launch that will introduce two chassis, an additional V6 engine and an extra single-cab alternative.

The half-ton Titan, which will compete with the F-150, Silverado, Ram and Tundra, will go on sale later this summer, said Dan Bedore, a spokesman with Nissan North America Inc.

“When our full lineup is available in the market, we’ll be in a strong position to make inroads in [full-size pickup] market share,” he said.

There’s one area where the Japanese have made inroads – midsize pickups.  Entries from Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. controlled 68 percent of that market through the first seven months of this year.

One reason is that the Japanese invest heavily in midsize trucks due in part to their popularity abroad. In emerging markets such as Africa and South America, roads are better suited to smaller trucks, and demand for amenities is overtaken by a more utilitarian mind-set.

The Asian automakers benefited from competitive weakness. In recent years, Ford and Chrysler abandoned their respective Ranger and Dakota lines in the U.S. to focus on the more profitable full-size category. Only recently has GM reentered the market with its Chevrolet Colorado and GMC Canyon midsize siblings. The trucks have helped GM claw back about a third of the segment.

Ford 2017 F-series Super Duty trucks

Ford 2017 F-series Super Duty trucks tested by the automotive media near Denver, Colo. (Photo: Jerry Hirsch/Trucks.com)

To better compete in full-size pickup sales, Nissan and Toyota need to grab sales from other slices of the auto market, analysts said.

The Japanese “haven’t made massive technology improvements the way Ford or GM have — it’s still not the core of their market,” said Stephanie Brinley, an analyst at IHS Automotive.

Nissan, for example, could try to convert an Altima driver with a small business or a penchant for camping into a Titan owner.

Marketing by the Japanese brands should target the coasts, where perception of Detroit isn’t as rosy as it is in the heartland. Toyota and Nissan have “almost no market share whatsoever” in the center of the U.S. — so-called truck country, Edwards said.

Toyota’s San Antonio, Texas, factory was initially dedicated to Tundra construction, which helped the truck some gain traction in what remains Ford-dominated turf. But now, the facility also churns out Tacomas.

The idea, analysts said, is to replicate the successful sedan strategy by slowly growing a reputation for quality and consistency.

“Nobody thought the Japanese would be able to take over the car market, and they did,” Sullivan said. “They have a very long-term look at things. They stick it out.”


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