Wall Street Journal Looks at Luxury

SD F-350 DRW Platinum
At a time when so much attention from the mainstream media focuses on hybrid and electric powertrains and the smaller cars they'll inhabit, it was nice to find this quick piece in the Wall Street Journal online edition (subscription may be needed to view) about the growing niche of luxury-package heavy-duty pickups and the buyers who love them.

The highlight of the article is a point made by Ram chief Fred Diaz. He said that 9 percent of all pickup sales had trasaction prices above $40,000 in 2010, and in 2011 that number jumped to 13 percent.

From our point of view, with the addition of the Laramie Limited from Ram Trucks and the Platinum edition for the Super Duty, there's no reason to believe that number isn't going to jump again at the end of 2012. If interior comfort and convenience is done well, without the sacrifice of capability and performance, it makes perfect sense this will be a strong place for truck makers to make big profits.  

GMC Sierra Denali HD II

 

 

Comments

I really don't know. One of my local Ford dealers has an awful lot of King Ranch Super Duty's on the lot, and they look like they have been there quite some time. GMC dealer has plenty of Denali's too. $5.00/gal. diesel? This economy isn't getting any better.

The way these trucks our priced it doesn't take much to get the price over 40k and that is probably the low end on the heavy dutys. Especially with almost 10k for the diesel motor alone.

Don't worry about it WSJ, why do you guys drive luxury German? Anyways, 40K still has hand crank windows if you're talking 4X4 dually crew. Maybe you're not but alot of us are writing off the truck, luxury or not, as a business expense. We're obviously in the black so why give it all to the IRS? Fuel can also be a write-off. See where this is going? But then, why can't I just skip German luxury for something 'a little more country'? ...as in USA...

is bad ford just look tough,and big,,,and so fragile..

is bad denlai just look tough,and big,,,and so fragile..

This isn't anything we didn't already know. High end trucks and SUVs are where the automakers make their money. Not on small cars. It's been that way for a long time and will continue to be that way for a long time to come.

Buyers of these vehicles don't care what gas prices are. Most people want to drive what they want to drive. If they can't afford the gas, they'll just buy less food and clothing for their children. Or go without health insurance. Or put their other expenses on a credit card. Or cut back in other areas that keeps the economic recovery from happening.

As a buyer of the lower end models myself, I'm more concerned with the fact that a fairly basic full size pickup now MSRP's for like 28-29k.

Sure I'm going to write it off as a business expense. But I still have to be able to afford the doggone thing. I'm not big on taking out loans anymore.

I see tons of luxury HD pickups in industry (forestry,mining, construction). I also see many 1/2 ton luxury trucks. If 13% of Ford's sales are luxury trucks that is 73,000 high end pickups. Huge profits.
GM is missing the boat by not offering competitive packages in the Chevrolet line. Chev sells almost 4 times as many trucks compared to its sister Sierra. Tell me again why the Denali is only in the Sierra line?

I have brothers in Construction and they have a lot of trucks for the business, none of which are decked out in luxury. Even their personal trucks are more utilitarian than luxo.

If people really put their trucks to use for what they were designed for, they would have the luxury tore apart in no time.

When I was self-employed I never kept my trucks more than 5 years. Once fully depreciated I traded them. It would tear me a new one to scuff up a pretty truck, or damage the luxo interior with muddy boots or equipment.

People who buy these pretty trucks buy them for show.

@DeBinder Dundett I saw this today in Sydney not far from where I was having Coffee. He must live locally as I have seen it on the highway. My Question is why? This extravagance has a 12.9 Litre Cummins according to a plate on the side of the Bonnet. It is just an attraction like an extended Limousine Hummer.
http://farm8.staticflickr.com/7007/6693463521_49fb7a7185_z.jpg

His local website:
http://www.f650australia.com.au/


Don't worry about it WSJ, why do you guys drive luxury German? Anyways, 40K still has hand crank windows if you're talking 4X4 dually crew. Maybe you're not but alot of us are writing off the truck, luxury or not, as a business expense. We're obviously in the black so why give it all to the IRS? Fuel can also be a write-off. See where this is going? But then, why can't I just skip German luxury for something 'a little more country'? ...as in USA...

@DenverMike- Yep, we write off all of our work trucks. All King Ranch Ford's except for the 4500/5500's. Seriously, why work all day in a piss poor enviroment when you could have a nice one that's deductable anyway? Trucks are our offices and tools and we buy the best.

@Lou- I agree. I never did understand that about GM. We always bought Chevy's years ago. The Ford's are just nicer now though. We have no real reason to switch back but if we ever did or even I did as a personal owner, it would be back to Chevrolet not a GMC.

@ Lou, Spot on. Chevrolet is missing out on a ton of money to Ford on this one.

I have to say I'm very interested in the Platinum SD. I can't wait to see one on the dealer lot and have a good look at the details. I'm in the same boat as many others here. Once my retirement funds are fully maxed for the year and my fuel and other expenses are accounted for I still end up in the black by a large margin. So either you give that money to uncle sam to you give it to Ford. I know which one I'd rather support. I've expensed out top trim trucks for years in my business. Why spend all day every day in a bad work enviroment?

This article is hardly surprising to most truck guys. Nearly every farmer and trucker I haul grain for has a SD King Ranch. I'm sure with the Platinum available they will have those now too. I have an F-150 with the King Ranch package myself. And why not? Life's too short to drive a crappy truck. Besides, I'm pretty sure OSHA wants everyone to be in a nice work enviroment right?

Now that ladies and gents is a fine looking Ford Dually!!

Those who can afford the truck, can afford the gas to put in it.

I hope Government Motors files for bankrupcy again.
I'll be the first to get the shovel. RIP.

Chevy doesn't get a high end luxury packages because GM can't afford to keep their two trucks updated.

GM to get another government bailout...in Australia.

Prime Minister Julia Gillard said the national and two state governments would inject A$275 million into GM Holden in the latest hand out to the country's struggling auto makers

http://finance.yahoo.com/news/gm-invest-1-billion-australia-051310556.html

@Dave,
It's pretty easy to do business when you get govn't bailouts all over the place and don't have to pay an income tax.

Something is very wrong at Government Motors.

GM may have restructered some of there vehicle development ad wrote off bilions in debt to make the books look good. But GM is still managed by incompetent people just like this conuntry has a incompetent President. Not a clue how to run a Business or Country. That is wht they go hand in hand.

Unless these trucks start getting much better mileage, or the prices of fuel comes down, I wouldn't expect sales to remain very strong too much longer.

Chevy doesn't get a high end luxury packages because GM can't afford to keep their two trucks updated.

GM to get another government bailout...in Australia.

@Dave, that is so sickening. I can't even stomach the GM company anymore. GovtMoCo is right. Why anyone would even want to be seen in a truck with those initials plastered across the front like it's something to be proud of is beyond my comprehension. I find it extremely embarassing.


But GM is still managed by incompetent people just like this conuntry has a incompetent President.

@Jugger, so true on both accounts.

Nice to see the Super Duty getting the Platinum package. We've had our F-150 platinum for almost 2 months and it is hands down the nicest truck money can buy.

@Lou, you are correct. I bought Chevrolet trucks and cars for over 30 years. Never a GMC. I bought the Ford Platinum because Chevrolet doesn't have anything this nice. We also bought a new Ford Fusion instead of the new Malibu as a result. It was a big mistake demoting Chevrolet trucks. GM lost out to me twice this year.

These interiors aren't designed for work. The luxury editions GM puts out have consoles between the seats. Unlike the center seat setup with large locking storage holds for laptops, binders, commercial size checkbooks and extra passenger room in a pinch. I think if I had one of these, I wouldn't get any real work done.

@Tim: So the US would be a better place if the largest auto maker in the world (regained from the Japanese) didn't exist? Seriously? Job killing isn't the road to success. GM hired back all the laid off workforce and recently hired thousands more. I like to think I helped a little on that front. Try to focus on the future. GM has scruples. They will pay back the govt. w/intrest. I just wish I could say that about the banks who got more bail-out $$ that they won't loan out, have no tangable product and profit from the misery of American Citizens.

Steve, Why do you make the false claim that GM has to take government bailouts or not exist? Are those the only options? No. Why couldn't GM go through bankruptcy like everybody else? The truth is GM would have been better off if they went through Chapter 11 and normal bankruptcy court. They need to stop and take a look at what they are doing and stop taking government bailouts if they want to succeed. GM can't keep relying on government handouts and be successful.

All these GM bashers might get their wish. Let's not give any loans to anyone except big banks and the Wall Street brokerage houses. Let's eliminate all government loans and grants to all auto companies including Ford for developing more efficient vehicles (they all take grants from development of electric, hybrid, and more efficient diesels). Let's eliminate all tariffs on all imported goods and allow Chinese trucks in duty free. After all we should have a true free enterprise and capitalistic society with no government intervention. Maybe we should eliminate child labor laws, labor unions, and do away with 40 hour work weeks. Allow only the strongest companies to survive and eliminate all anti trust laws.

If this is what you want then you need to be willing to give up all your benefits that your employer gives you and work for less money. Ok maybe GM should not get anymore government support and the same thing with Chrysler. See how long Ford lasts after it is the only domestically owned corporation (Chrysler is now Fiat) and there are no longer GM or Ford around to bash. Ford does not manufacturing all their parts but I guess they could share more parts with Toyota and maybe even buy more parts from the Chinese since the Chinese will have a door open to compete in the US auto and truck business. Also would it be cheaper for the US taxpayers to pay more unemployment benefits to unemployed auto workers who pay taxes and spend money in the local and national economy?

Most of you probably are not aware that for years the Japanese auto industry gets loans and subsidies from the Japenese government. The Chinese government does the same thing as well as a lot of the rest of the world. Many of you espouse free enterprise and capitalism in the same sentence but they are not the same. True capitalism there is no government intevention of any kind and you eliminate all competition by undercutting competition on price and then once you have done that then you can charge whatever you want. Be careful what you wish you might not like what you get.

I do not like government loans or bailouts but I also don't like multinational corporations get tax breaks and subsidies for importing Chinese made goods (Home Depot and Chinese made ceiling fans). I also don't like able bodied young people getting Social Security. I would rather support people working than not working. It also appears to all you Ford supports that bash GM that GM is doing well and the better GM does the more likely we the taxpayers are to get paid. I have driven new GM and Chrysler products and I think they are vastly superior to what they were even 5 years ago. The same for Ford. I think that Chryser, Ford, and GM should all be commended for the progress they have made and they are all making world class and world competitive products. Maybe Chevy will make a more upgraded version of their Silverados once the redesign is released. I am sure GM is reading these blogs as well as listening to customer feedback. I will remain positive for now and see what GM does in the near future.

@Dave,
Not a Bailout of GM. We give them $200 million, they will be investing $ 2 Billion.. It is more giving a boost to manufacturers in the supply chain. It is the high Australian Dollar and no tariffs on imported products(No Chicken type Tax here) that have done the damage. If the Australian Dollar went down everyone is happy.

It is a bailout. GM loves taking corpate bailouts and welfare from as many companies as it can: US, Canada, Austrailia, etc. A bailout is giving money to a company to save it from closing. GM had considered closing operations before this handout. GM is like a vampire who doesn't want to stay in business unless the tax payers keep them going. GM will be investing $1 billion in it's own operations.

It is a bailout. GM loves taking corporate bailouts and welfare from as many COUNTRIES as it can: US, Canada, Austrailia, etc. A bailout is giving money to a company to save it from closing. GM had considered closing operations before this handout. GM is like a vampire who doesn't want to stay in business unless the tax payers keep them going. GM will be investing $1 billion in it's own operations.

"GM will be investing $1 billion"

*Forward-Looking Statements

In this press release and in related comments by our management, our use of the words "will be," “expect,” “anticipate,” “possible,” “potential,” “target,” “believe,” “commit,” “intend,” “continue,” “may,” “would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planned significant investment in new technology; the ability of our suppliers to timely deliver parts, components and systems; our ability to realize successful vehicle applications of new technology; and our ability to continue to attract new customers, particularly for our new products. GM's most recent annual report on Form 10-K and quarterly reports on Form 10-Q provides information about these and other factors, which we may revise or supplement in future reports to the SEC.

Robert Ryan, there are a few similar to that 650 here in Southern California as well, but they are really show trucks.

I saw an F350 that was customized and extended with 8 doors, four on each side. A novelty, but probably useful for the Mormon who owned it who had several wives and kids to transport, as a family.

@DeBinder Dundett I took a few shots on my phone camera as well. A fellow on the walkway up to the Railway station said" Looks impressive, must be a lifted and stretched US Pickup, F350 or something" He had never heard of a F650. Yes it is a show truck, but we have F250/F350's being driven around as well ,doing nothing. This was as big as a Dump truck ,but a fair bit smaller than the Council's ACCO /LCF Garbage compactor.

@Robert Ryan - Cool truck.That was for a limousine service? I've seen 1 International CXT and 1 MXT. Both looked real cool.

@ Jeff - I think there does need to be a ballance when it comes to bailouts, tax incentives, "loans" or what ever one may chose to call government intervention. My concern over the GM "bailout" was that they still defaulted on 100 billion and needed roughly another 60 billion from the USA taxpayer. I think Canada bailed out GM Canada for at least 6 billion which was paid back by USA taxpayers.
The debate should be whether or not it will help the economy in the medium and long term. The "bailout" gets used to rub GM fanboi noses in the huge turd that is the bailout. That is rather unfortunate. I think that if the USA government would not of intervened, GMC would of been chopped up and sold piecemeal to the highest bidders. Some parts of GM would of been lost like Hummer and Pontiac ( Funny how that happened anyway). Other parts like Cadillac and Chevrolet most likely would of ended up being owned as separate companies. Mahindra Silverado, Jianghuai(JAC) Oldsmobile, VAZ: Volzhsky Avtomobilny Zavod (ВАЗ, Во́лжский автомоби́льный заво́д) Cadillac, but better known to the world under the trade name Lada Cadillac.
All kidding aside - It most likely would no longer be a USA company. Chrysler got bailed out and was handed over to the Italians. I find it odd that rarely does any American bailout bashers complain about that fact.
In the short term it would of been really hard on the USA auto industry but the survivors would ramp up production in the short term and open new factories in the intermediate and long term to fill the void left by GMC.
There is a 20% automotive over capacity in the world. I'm not trying to stir the pot with this comment " but would GMC really had been missed?"

@Lou,
I think he is using it as a promotional device. I was impressed by the 12.9 litre Cummins, as far as I know the production F650 has a 6.7 diesel. I have seen two white F650's displayed as 5th Wheel towers. It would have to be the biggest Pickup I have seen.

@Lou,
From this side of the fence,both GM and Ford are having a hard time. They have very little to sell Globally. BMW and Mercedes are making smaller cars and Hyundai is making a name in Europe., then of course there is VW and the PSA group fighting for the same territory. In Asia they are really not making it, contrary to the rather rubbery "sales" figures GM has released that included a Chinese Mini-Van manufacturer that they have a non-controlling 31% of shares. Chrysler has a huge worry about the state of Fiat cars, they are a small manufacturer in Europe and are under a lot of duress.
As it stands the US Pickup sales are saving Ford, GM and Chrysler. If they weaken you have a lot of problems.

As it stands the US Pickup sales are saving Ford, GM and Chrysler. If they weaken you have a lot of problems.

Well GM really needs to get their Chevrolet truck line back in order then. When 8 out of 10 trucks sold are Chevy Silverado's they can't be doing these half assed Silverado efforts just to justify the Sierra's existence. Ford and Dodge own Chevrolet in this department anymore. If we gave them all of this money to get back on the right track you'd think they'd get a clue and get their biggest money maker Chevy Silverado back on the right track as well. Quit dinking around with the Sierra. When I looked at both trucks last year I was in shock how far Chevrolet had really fallen compared to Ford. I just decided to wait and see how the new Silverado turned out before jumping ship. No way was I buying the current Chevy truck over a Ford truck. And I've never been able to say that before.

@Lou not in total disagreement with what you said but there is so much harping done about government loans (bailouts) that it is getting tiresome. I agree that long term that "bailouts" will not help a weak company survive. Neither will Chapter 11 Bankruptcy. Look at K-mart since they emerged from bankruptcy and bought Sears. Both are going down. Probably when it is all said and done Ford will end up the only domestically owned auto manufacturer but if you think that Ford is so strong that it can resist any foreign competition you are wrong. Not only the Japanese and the South Koreans but you will see the Chinese enter the North American market and they will compete fiercely. I am not ready to throw the towel in like many who hope that GM goes out of business and only Ford is left. The only trouble with that as that where there is a void someone will fill it. That someone will be the Chinese. Some are ready to bury GM before the launch of its new trucks. I say lets wait and see and then pass judgement. Maybe GM will come up with a great truck and pay every penny back.

Ford does not make flawless vehicles either. As I said in an earlier blog that 2004 thru 2008 Ford 150s, Expeditions, and Explorers have spark plugs that break off when taking them out and many Ford owners are experiencing $800 to $2,000 tuneups. I guess those that can afford $40k to $60k for a new truck this is not that significant but that would sure discourage me. Ford did come up with a fix in the form of a new spark plug attachment but some of the plugs are still breaking off. It seems they should have recalled the plugs and made good to the owners. I have not heard this being a problem on 2009 and after.

I guess if you listen to Fox news all the time then you are angry and have to find something wrong. I agree that there should not be any more government loans but then the US needs to stop being the World's policeman and take care of our own country. But then there would not be as much money in lucrative defense contracts for new weapons that do not work in the types of conflicts we fight and also we need to rebuild Iraq and other countries while the good old USA has a crumbling infrastructure and high unemployment. And what about a nonexistent energy policy that the USA has carried on for almost 40 years through Republican and Democratic leadership.

I guess what I am saying is I would rather preserve some working class auto jobs than to spend money on overseas conflicts that are sapping the human and financial resources from the USA. Our troops should be commended for their service and treated better by the government but unfortunately most of the politicians are more interested in serving their contributors which are the defense contractors and big energy. Enough said on that.

As for GMC maybe they are not necessary but if I really wanted a loaded down GM truck I would consider a GMC because mechanically it is almost identical to the Chevy and it definitely has a nicer grill. I have driven Fords, GMs, Chryslers, Toyotas, Nissans, and etc and I have found things that I like and dislike on all of them. The worst vehicle I ever drove was a Ford Fairmont but fortunately they don't make that anymore. I can honestly say that in the past 5 years I have not driven any new car or truck that I totally hated.

There's that Buzzuka exhust pipe on the GM truck again. How bizarre.

Robert Ryan, when I was working for one of the largest federal Prime contractors prior to 2009, that company had several F650 Cab&Chassis vehicles. Most of them had satellite tracking gear mounted on them and used diesel engines.

I had many chances to hitch a ride to Fort Huachuca and Edwards AFB in those vehicles and I would not be interested in owning one for myself. Those are stiff-riding vehicles that will bust your kidneys whenever you take them off the beaten path. Every pothole is transmitted through the suspension and into the cab and seats.

I owned several half-ton class pickup trucks that I used to carry my professional gear and tools in but none of them were decked out in luxury. I preferred to follow the F650 satcom trucks in my half-ton pickup truck and enjoy the better ride.

The trouble with these luxury trucks is that under all that luxurious trim are the same engine and transmission as that of the cheapest trim, with the same problems manifested regardless of trim.

Maybe if Tundra came out with a super-luxo model like my wife's LS460 Mark Levinson, I might be persuaded to trade my 2009 Tundra. But that would be a purely ego-driven purchase for me.

If people want to make a social statement by buying one of these decked out trucks, that's great, for them. But for the working man such luxury trim is just pretentious.

I remember one technician I worked with who cried like a baby when he accidentally cut the leather driver seat of his King Ranch with an open box cutter on his tool belt.

@Jeff - I not hoping that GMC and Chrysler die leaving Ford. I'm not convinced that the GM bailout will be of any benefit in the long term. There isn't a single USA auto company that is out of the woods yet. Robert Ryan pointed out that Fiat is struggling. I've read that as well. Fiat needs Chrysler. Chrysler will end up being the savior of Fiat not the other way around. China and India are hungry to expand their business reach and they have the money to do it. Many predict that the USA will slip to #3 or #4 in world economic might. Japan, China, and India are predicted to move into the first 3 spots.
I do agree that the USA would do its own people a better service by backing off of the "global policeman" role. That roll will probably not have much long term benefit to anyone either. (A separate debate all on its own).
Motor vehicles have gotten considerably better. I bet that if you took the current pickup with the poorest track record and compared it to the trucks from the last 2 decades, it would be a stellar truck.
In many respects I do find the whole Chevy versus GMC truck debate interesting. I am amazed by how loyal people are to a particular brand. I have an F150 but that isn't going to determine what my other purchases will be. My wife has a Sienna. Does that mean I should of bought a Tundra? or I should ditch the Sienna and get a Flex?
I do think that GM is making a mistake by not offering high end trim levels in the Silverado. If GM needs to maximize profits to survive, that is a lucrative market that they should not ignore.

@Tim, GM was already in bankruptcy in 2009 when the Govt. bailed them out. The enonimists didn't want to let that shoe drop that you suggest would have been better for everyone. GM is now on track to pay back the bailout money before the 2015 deadline.
The President commited to make good on the vehicle warranties for the two auto makers in bankruptcy because he knew no one would buy anything from a company with an uncertain future.
We will never know how your way would have played out. Maybe GM would'nt have gone tits-up, but many of their suppliers would 't have survived the interum protracted proceedings in bankruptcy court. That would have spread to the healthy Ford production lines. The colladeral damage would have had a staggering if not devestating effect throughout the economy.
Given your stance on the automotive companies, would you agree that we should have let the banks, the mortgage companies and the hedge fund companies go bankrupt?
A Depression would be a hellofa' price to get Obama canned, but it most certainlly would have worked. Would you really want to hang that victory on your mantle?

RR, From what I see Ford is either #1 or 2 in Europe. Not exactly in trouble there.

My "little" Mazda truck is sort of luxurious, and I love it.

About the bailouts of automakers, it seems mainly the NA companies are hit the hardest, even in Europe GM is winding back alot of plants. I think GM, Chrysler (now Fiat) and Ford have gradually lost their way as innovative identities.

Even in Australia Detroit has significant input into our modelling and management. The so called Big Three (historical term) didn't make the necessary changes starting in the 70's and have gradually eroded their lead. US vehicle engineering hasn't advanced as quick as the Europeans, Japanese and Koreans. It took the Financial Crisis to show the poor management and overly unionised operations in the US.

Why is it that the Japanese, Korean and Euro factories in NA didn't have the same issues as the Big Three.

NA really needs to de-regulate and provide real freedom in its vehicle manufacturing sector to advance. Real competition provides an environment for progress.

If any NA people are offended by my above post, sorry.

But, luxury isn't adding leather, power window etc to a vehicle. The Chinese vehicles we get in Australia have all the power options as standard and they aren't considered luxury.

Prestige and luxury comes from innovation, ie, chassis and suspension performace, engine and drivetrain performance. All the electronic aids and I'm not talking about having a Bose or a Pioneer sound system, vehicle safety etc.

The Wall St. guys do drive real prestige vehicles, Euro cars. A comparison between a commercial vehicle and a luxury car is really chalk and cheese.

Most of the prestige vehicles of today will transfer much of their technology into vehicles of the future. The reality is not enough is transferred into commercial vehicles.

@Big Al from Oz - I agree with your comments.

Ford pioneered the high-end luxury truck segment in 1999 when it introduced the special-edition 2000 Harley-Davidson F-150. In 2003 the first King Ranch Super Duty arrived, followed by the 2004 Harley-Davidson Super Duty. Today, Ford sells a rich mix of high-end Lariat and King Ranch Super Duty models; the new Platinum will further meet the growing luxury needs of customers and dealers.

@Jim,

I agree.



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