It seems like just a few weeks ago at the North American International Show in Detroit that automakers and industry analysts were proclaiming the market sputtering and full-size pickup trucks ho-hum. But at this week's Chicago Auto Show, visitors might get the idea it's the year of the truck.
Among the dozens of new vehicles likely to be introduced at the show, trucks and big SUVs will take center stage. General Motors (GM) and both Ford Motor's (F) Ford and Lincoln divisions are showcasing new designs of their full-size SUVs and luxury trucks. Chrysler (DCX) is launching an additional midsize SUV into its Dodge lineup, and even International, the big Warrenville (Ill.)-based truck maker, is showing off a new heavy-duty truck that it says ranchers, farmers, and the truly truck-obsessed will want for work and fancy customization.
KEEP ON TRUCKIN'. The big news at this show, which will be open to the media on Feb. 8 and 9, and to the public Feb. 10-19, is expected to be Toyota's (TM) redesigned Tundra full-sized pickup. The Japanese company is betting that the new truck finally puts it on the map in that cut-throat category still dominated by Detroit (see BW, 2/13/06, "Toyota Builds A Truck Even Bubba May Love").
Lincoln -- amidst a repositioning of its American luxury brand in the hopes of being a more substantial challenger to the resurgent Cadillac, as well as the Asian luxury brands to which it has lost ground -- will unveil the newly designed Lincoln Navigator. It is also planning to unveil a special edition model of the burly luxury SUV.
It's rough timing for a new Navigator, which has been somewhat overshadowed the last several years by the hip-hop favorite, Cadillac Escalade. Navigator sales were off 29% in 2005, to 25,844, as full-size, gas-thirsty SUVs took a big sales hit while gas prices flirted with $3.00 per gallon. The new Navigator, which prices out between $49,000 and $56,000 before incentives, is joining a rapidly changing Lincoln lineup that includes the new Zephyr entry-level luxury sedan and the MKX crossover SUV introduced in Detroit last month.
Lincoln also has a new flagship sedan in the works to replace the dated Continental, which it stopped building a few years ago (see BW Online, 1/12/06, "Why Carmakers Are Crossover Converts").
SHRINKING MARKET. Ford executives estimate that the large SUV market, already down from more than 1 million to 800,000 last year, will continue to decline and level off at 650,000 units. "No question that the full-size market is going to decline from the levels we saw, but it's still an important segment we plan to be best in," says Ford CEO Bill Ford (see BW Online, 1/12/06, "Bill Ford on Turning the Corner").
The other reality is that auto companies have to commit to redesigning and refreshing models three, four and five years in advance of them hitting showrooms. Ford, GM, and Chrysler executives have said that the escalation of gas prices to the point of cooling SUV sales happened much faster than they anticipated even after the current conflict in Iraq began.
While the market is shrinking, it certainly isn't going away. There is a healthy-sized army of Americans who need burly SUVs to pull boats, recreational vehicles, horse trailers, and snow-mobiles, even if there are a dwindling number who aspire to have them merely for their once-fashionable bigness. The task for automakers, especially those in Detroit, is to manufacture them more efficiently so that they can still clear much-needed profits on a smaller sales number.
EXPANSION TEAM. Ford also will be showing the new version of the Ford Expedition, which is built off the same vehicle platform as the Navigator, but without as much bling. The new Expedition, whose look somewhat mimics the F-Series pickup redesign, includes an extended version, the new 2007 Expedition EL. With 14.8 inches of additional overall length,the Expedition EL has 130.8 cubic feet of cargo space -- including 24 cubic feet more behind the third-row seat than the old Expedition.
The Expedition EL rides on a 131-inch wheelbase -- 12 inches longer than the standard Expedition -- to preserve the base model's superior ride and handling. When it comes to the muscle in this SUV, the 5.4L Triton eight-cylinder (good for 300 horses and 365 pounds-per-foot of torque) is now tied to a standard six-speed automatic. Properly equipped, the Expedition can tow in excess of 9,100 pounds.
General Motors, which introduced a new Escalade last month and gave one away to the Most Valuable Player of the Super Bowl this past weekend before 90 million TV viewers, will introduce a new version of the Chevrolet Avalanche. The sport utility/pickup truck combo is built on the new-generation full-size truck platform it shares with the Escalade. Avalanche sales were off 21% last year, but GM managed to sell a respectable 63,186 vehicles. Avalanche prices range from $34,000 to $39,000 before incentives.
CROWDED LOT. One of the more puzzling entries of the show is the launch of the Dodge Nitro. In what could turn out to be the answer to a question no one was asking, Dodge will add a competitor to the Toyota 4Runner, Ford Explorer, and Chevy Trailblazer. Analysts, so far impressed with Chrysler's financial comeback and development of a few crowd-pleasers like the Chrysler 300, believe the Nitro will have a tough time breaking through Chrysler's crowed lineup. "They [Chrysler] seem to be piling SUVs on top of SUVs in the dealerships," says James Hall of AutoPacific.
Indeed, just as the market is softening, Chrysler is launching the Nitro, which shares engineering with the Jeep Liberty SUV. And it comes after the company launched the Jeep Commander, an up-market SUV, to a mediocre reception last year. It also introduced the full-size Chrysler Aspen SUV last month at the Detroit Show.
International, maker of professional trucks, is launching an all-new model, the RXT. The company says it is not just for the professional hauler, but for the "truck owners who demand...everything." If a super-duty Ford F350 or Dodge Ram isn't enough power and brawn for you, the RXT offers a payload of 4 tons to 6 tons, with towing capacity of 7.75 tons. The truck boasts as many as 300 horses, depending on the choice of engine. It features a 4x2 Crew Cab and an eight-foot pickup bed. The price hasn't been announced yet.
TEXAS-SIZED. It will be tough for any domestic or European automaker to upstage Toyota, which promises to make a big splash Thursday when it takes the sheets off its 2007-08 Tundra full-size pickup truck. Toyota has made two previous attempts to make it big in pickups, but hasn't reached the major leagues with trailer-pullers and ranchers.
But the automaker has made a big investment in a new San Antonio (Tex.) plant to build its latest truck, which dealers have said is bigger than the standard versions of the Ford F-Series, Dodge Ram, Chevy Silverado, and Nissan (NSANY) Titan. The criticism of the current Tundra, which increased sales last year by 12.5% to 126,500, is that it is too light, small, and wimpy for the serious truck market.
Toyota has devoted four years to exhaustively researching the market, though, and executives say they have learned from their mistakes. With the new plant, and the existing manufacturing lines in Indiana turning out the current Tundra, Toyota figures to be selling some 250,000 Tundras a year by 2008. Production begins next fall and it will go on sale about a year from now.
Kiley is BusinessWeek's Marketing editor in New York
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