For Rick Alpern, who runs the Keyes Chevrolet auto dealership in Los Angeles, few tasks are tougher than selling big trucks to eco-conscious Californians looking for just enough pickup to fit a bike, beer keg or surfboard.
Consider his recent effort to persuade the owner of a mid-size Toyota Tacoma to switch to a full-sized Chevy Silverado.
“We talked about going into a Silverado,” Alpern recalled last week. “He goes, ‘The problem is that Silverado is just too big for me for what I do.’”
General Motors Co. (GM:US) is out to change that. While the Detroit Three dominate big pickups, Toyota Motor Corp. (7203) has become the top mid-size truck seller in the U.S. with its Tacoma. GM, which stopped building a mid-size pickup for the U.S. last year, is returning to the segment with a redesigned version of the Chevrolet Colorado, betting it can appeal to Toyota buyers.
“The styling on the Colorado is unique enough that it’s going to raise some eyebrows and create some attention -- and all of the attention that we can create bringing prospective buyers back to the Chevy showrooms is vital,” Alpern said.
The Colorado, which GM plans to reveal at the Los Angeles Auto Show Nov. 20, extends an effort to offer a wider variety of pickups to U.S. shoppers than any other company. Along with the Colorado, GM will also offer a GMC version called the Canyon.
Ford Motor Co. (F:US), whose F-Series has been the best-selling truck for 36 years, only sells full-size and heavy-duty versions, as does Chrysler Group LLC’s Ram brand. Toyota doesn’t offer a heavy-duty pickup while offering full-size and compact trucks.
“We have a three-truck strategy,” Maria Rohrer, marketing director of Chevy trucks, said in September during a presentation in Austin, Texas. “We believe that we ought to have a myriad of mid-size, full-size and heavy-duty. We’re the only ones that have all three.”
GM didn’t totally abandon its mid-size truck effort after stopping production for the U.S. A redesigned Colorado, which was revealed at the Bangkok Motor Show in 2011, is sold in 16 global markets, including Brazil, Thailand and Argentina.
While the new U.S. Colorado is built on the same platform as the one sold globally, it “has been pretty much re-engineered for North America because the customer needs are very, very different than they are in Thailand or Brazil,” Tom Wilkinson, a GM spokesman, said in a telephone interview.
To take hold in the U.S., wooing Californians is key. The state is the largest market for mid-sized trucks, with 16 percent of registrations this year through September, according to Edmunds.com. The next biggest markets were Texas, with 9.7 percent and Florida, with 6.7 percent.
Alpern, the Los Angeles car dealer, said he was given an early peek at the new Colorado by GM last year. He said its styling isn’t as “radical” as the international version, though it’s aggressive enough to appeal to California buyers, especially those who will use it for lifestyle purposes such as biking and surfing.
“Lifestyle truck owners are more apt to change to something that has newer features, more styling,” Alpern said.
Ford got out of the mid-size segment in 2011, saying customers prefer larger pickups. GM, embracing one of the few areas where it won’t fight head-to-head with Ford, is taking a risk.
The market for these smaller pickups, which weigh less and are more fuel efficient than large pickups, makes up only 1.6 percent of the total vehicle market, down from 3.2 percent in 2008. It may increase only to 2 percent in 2015, according to IHS Automotive’s Polk.
“The customer can get a heck of a lot more value in terms of towing capacity, bed size, engine size” by getting a larger pickup, said Tom Libby, a Polk analyst. “The competition in that segment is hurting the one underneath it.”
The Colorado is part of the 18 new or refreshed vehicles being brought out this year and 14 next year by GM as its works to transform its lineup from among the oldest into the newest. The Chevrolet Impala was the first U.S. car chosen as the best sedan on the market by Consumer Reports, and the Cadillac CTS was picked as Motor Trend’s Car of the Year.
Chief Executive Officer Dan Akerson is counting on the new models to help boost North America operating profit as he seeks to stem losses in Europe and expand business in China. GM shares rose 0.7 percent on Nov. 15 to $38.77, the highest closing price in 34 months.
The mid-size trucks are also part of GM’s strategy to meet federal CO2 restrictions, Mark Reuss, president of GM North America, told reporters in September in Dallas. GM sees the Colorado competing against the Toyota Tacoma in markets such as California where mid-size trucks sell better, according to Edmunds data.
While GM sees the Colorado competing against the Tacoma in markets such as California, the GMC Canyon will target GM’s full-sized competitors, Reuss said.
“It’s a beautiful truck that gives you almost everything that a full-size competitor might give you but at a lower price,” he said.
Consumers paid an average price of $27,903 for a mid-size truck in September compared with an average $40,860 for full-size and heavy-duty pickups, according to Edmunds data.
The Canyon will be unveiled in January around the North American International Auto Show in Detroit, said a person familiar with the plans who asked not to be identified because the plans haven’t been released publicly. The trucks for North America will be assembled at GM’s factory near St. Louis. The U.S. market for mid-size trucks has declined because of improvements among big pickups.
“You’ve got these full-sized trucks that have just become tremendously capable vehicles and considerably more efficient than they used to be,” Jeremy Acevedo, an analyst with Edmunds, said. “It’s just kind of taken away from the market share of compacts.”
Tacoma led the mid-size segment last year with 141,365 deliveries, a 28 percent gain from 2011, according to researcher Autodata Corp. Combined U.S. sales of the Colorado and Canyon peaked in 2005 with 163,668 deliveries, Autodata said. That compares with combined U.S. sales of GM’s full-size pickups of 575,497 last year.
Mid-size trucks comprise “a segment that used to be a very big portion of the overall truck market,” Dan Ammann, GM’s chief financial officer, told reporters in August. “It’s diminished over the years, partly because in our view, there hasn’t been the kind of offering in the segment that customers were really looking for.” The Colorado is “really going to be aimed at the sport truck segment.”
Few Silverado buyers shop for smaller pickups, Edmunds’s Acevedo said. About 11 percent of Tacoma shoppers, for example, looked at a Silverado 1500, according to Edmunds data.
“It seems like the potential for incremental sales,” he said.
Since exiting bankruptcy in 2009, GM has rushed to develop new products in areas that it had let slide, such as compact pickups, as it dealt with the collapse of its business.
“During 08’, ’09, ’10, they had to pick and choose what programs made the most sense financially knowing they couldn’t do everything they wanted,” Polk’s Libby said. “This segment probably didn’t make the list.”
For Alpern, the new Colorado is “going to be a welcome addition.”
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