Could Global Competition Lower Pickup Prices?

2014_Toyota_Tundra II

It makes sense: If you have more competition, pricing among the competitors will be tight and as low as the various manufacturers can afford. Just look at the compact and midsize car segments. There are as many as 15 to 20 competitors thrashing it out against each other, cage-match style. For the most part, what consumers get is a pretty good bang-for-the-buck proposition. 

Now look at the full-size pickup truck segment, with relatively few competitors, a strong brand loyalty component and a governmental safety net (a 50-year tariff of 25 percent on imported pickups) that practically forces any serious import truck makers to invest in expensive production plants in this country. 

According to The Detroit News, some experts think that the stronghold U.S. pickup truck makers have on the full-size truck market adds several thousand dollars to the average price of a pickup for U.S. truck buyers. In fact, the story reports that the average new-truck price for a full-size pickup has far outpaced (more than doubled) the price increases seen in all other vehicles. 

Ongoing negotiations regarding a free-trade agreement between 11 countries (including Japan, which much drop trade barriers that discriminate against the U.S. for things to move forward) and the U.S. still have many obstacles to overcome, but the possibility of removing the "chicken tax," as the tariff is called, does look like it is on the table. Clearly, brand loyalty will always play a significant role in the full-size segment, but more competition would be nice for lowering prices and getting more features on new trucks.

 

Comments

Competition is always good and it improves everyones product even if you only drive a Ford, that Truck is better because of the competition. Pickup are overpriced thats why manufacturers put so much time into them because the profit margin is killer.

Correction, pickups that are loaded with bells and whistles that you really do not need are overpriced, but when you buy a truck without all that crap? you get a vehicle that is designed and made so much better than you average automobile, is it any wonder the re-sale of trucks is better than cars? and you all know this is true, just look, you can get a 4x4 ext cab truck from either of the fine manuf. for under 30K (if you shop), but as soon as you can shake a stick at them, or fill a couple of options columns, especially HD's but 1/2t also, you can almost DOUBLE the price? but you still have the very same truck under it all! just without all the electronic stuff, or power this and that, or heated/cooled seats, no thanks, just give me a nice 1/2t, with the HD tow and service package, a nice radio disk player, and vinyl floors, and rollup widows, and I am good to go, and able to tow as mush as the guy with the 45+K truck, that has his a$$ cooled or heated, and listens to his music so loud, he will need ear-aids in a few yrs , and has the sun shining on his head while driving with his "sunroof" open, thanks but no thanks, if I wanted luxury, I would by a Caddy. That is how the manuf make all the money they do on these trucks, is they load them up with way overpriced options, just try and find a standard XL, WT, or plain Tundra on the lot.

The Only Real Competition comes from GM, Ford and Ram...

Tundra and Titan are nothing more than a Joke...

@sandman4x4
This article isn't about not optioning a truck to reduce its price, but about having the base price of a truck drop, like you stated without the options and bells and whistles.

Competition breeds more consumer lead innovation, not regulated innovation. So, you might be able to get a 30mpg truck for less than $20 000. We have them.

Unitl (and if) a diesel Colorado is released and the diesel Ram you will not have a 30mpg pickup. The best you have is that 6.5' bed, 8spd, Pentastar Ram for $27 000. It can only tow as much as our outdated Hilux and carry half the weight and still gets 5mpg+ less FE.

Even Chrysler's head for trucks in the US stated $22 000 is going to be the price for pickups.

Even here, our pickups are mainly mid to high end vehicles. But we also have loaded trucks that are the price of base model Japanese vehicles. This is forcing a rethink of the Japanese prices.

A classic example is the Toyota Hilux here that dropped $6 000 when the Amarok, Ranger, BT50, Colorado and Dmax where released in the past couple of years.

Toyota even optioned up the vehicles to try and remain competitive.

The Korean pickups and Chinese pickups all force the main players to reduce prices. There comes a point when the consumer becomes price or brand driven for a purchase.

Competition is great, you just have to convince the UAW and Big 3. Countries are now pressuring the US to remove the protectionist tariffs for trade between countries. I hope they succeed. The consumer will be the main beneficiary in the end.

How can there be "competition" with the Chicken Tax in place, courtesy of your central planners?

@MadMax - What "Chicken Tax" and where the hell was it during the '80s mini-truck craze/fad/invasion???

Chicken Tax,you mean Kentucky Fried Chicken has a new tax ?

There's an assumption mid-size and full-size truck buyers are the same group. Not so much. Global competition will not lower the price of domestic because they couldn't get any lower. And full-size truck prices didn't drop during the '80s mini-truck craze/fad/invasion, so why would they drop now?

What WILL happen is global truck will sell for less here in the states, than they can and do elsewhere. Luckily, they don't have competition from full-size to keep their prices in check, outside of North America.

And the Big Horn, King Ranch and Platinum/Limited of small trucks will never be offered here. We don't look at small truck as high end 'luxury vehicles'.

@BAFO - Everything you speak of is one gross exaggeration after another to favour global trucks. Give a REAL example (make/model) of a 30 MPG truck. Or the exact global truck (make/model) that can haul 2X the load of which (make/model) US truck? $27,000 gets you a well equipped (domestic full-size) truck, after rebates.

I hope the Chicken Tax finally dies so North America gets some more competition in the small truck segment (and maybe even a global Ranger).

Competition is always good. Yes those who want big trucks will buy from the Detroit 3 but for those who want midsize this would be good. I seriously doubt the Chicken Tax or any burdensome regulations will go away with the UAW and domestic manufacturers lobbying heavily against this. We have the best government money can buy meaning our representatives listen to those who contribute to their campaigns. Whatever happens, happens but I have little faith in either political party and our Government. I hope that I am wrong, but we have a Government that cannot pass a budget.

Midsize trucks shouldof stayed 80s size. halftons need to stop playing heavy duty(ford).

Ford, Chevy, and ram make $10,000-$15,000 profit on every full size truck sold. That's a ludicrous profit margin that rivals apples iPad.

Full size pickups have the greatest profit margin of all especially when they are loaded. When these trucks are discounted up to 10k then you know the markup is sizeable. Of course not everyone gets a large discount but when you have to move units especially at the end of the year you still make money just not as much. I would like to see some more affordable options in smaller trucks. We will see what happens.

Seems to be a long time coming.

Excuse me, but the Titan, the Tundra and the trucks from the big three are made in the western hemisphere. Technically you could even say they're made in the US. This whole discussion is about the unions and their bitching about global competition.

I want the choices that are best for me. Please don't tell me about what's best for you (unless you're buying).

The supposed experts who think competition in the full-size pickup market will bring prices down have clearly forgotten the most obvious criteria: these things aren't sold anywhere else.

The Ford Transit and Ram ProMaster (Fiat Ducato) vans are coming here because they allow economy of scale with identical vehicles around the world. There's no F-Series anywhere else but North America... and while it's the best selling nameplate here, there's very little need for a truck that size and configuration anywhere else in the world. They already have more efficient and equally effective trucks - they use van cutaways or low-cab-forward rigs with pickup-style boxes, so they have no need for a dedicated full-size pickup truck.

So there won't be waves of full-size pickup competition coming here simply because, manufacturers would have to invest in a platform that can't be sold anywhere else. Hyundai-Kia has no interest in building a Class 3 crew cab dually to compete with the Ram 3500, because there's no other market for it if they fail here. They saw what happened to Toyota with the Tundra and the big San Antonio plant... and they don't want to make the same mistake.

Roadtrip.

The Ford Transit and Ram ProMaster are coming here because they are going to be assembled here.

And by here I mean in the United States.

Rams, Chevies, Fords built in Mexico and Canada are excused from the chicken tax because of NAFTA.

The simple fact of the matter is, Detroit reigns supreme when it comes to trucks. When it seemed like Toyota was going to take over with its trucks, they didn’t make a dent. And in the current truck boom, Nissan’s Titan sales are down.

@Papa Jim
I agree with you whole heartedly. I think the Big Three will always dominate the US truck market.

But, why not allow some of the foreign (made overseas) trucks in without the taxes and protectionist measures. There are the crowd who always state we don't want them or they will never sell.

Even if only a handful of imported midsizers are sold each year in the US it gives more choice to the public.

If some are cheaper it will force the locally made trucks to be more competitive in pricing. I think its a win-win situation.

Cheaper midsizers will cut into some fullsize pickup sales, how much I couldn't answer.

Remember there are no full size pickup manufacturers outside of NA. The biggest pickup style vehicles I've seen are the Nissan Patrol and Toyota Landcruisers.

We should close all japanese made vehicles sales in the usa until we can sell our cars there.

More competition WILL mean lower prices--given time. Just as Chevy is right now offering up to $9,000 off of a '13 Silverado, we see that there is huge profit being made on trucks simply because people are willing to pay so much. Bring in competition that maybe offers an equivalent truck for $3k-$4k less or a smaller truck as much as $10K less and the US market is going to blow wide open--people looking to get "good enough" at a lower price than the existing models.

I've promised my wife I would buy her a brand new pickup truck; what I didn't promise was that I'd spend $50K or even $35K on it. In fact, I'm going to be aiming at $25K if things work out the way I expect.

@paulw: We CAN sell our cars there. They just don't happen to LIKE our cars. They're too big, too expensive and too, too thirsty.

@Papa Jim
I agree with you whole heartedly. I think the Big Three will always dominate the US truck market.

But, why not allow some of the foreign (made overseas) trucks in without the taxes and protectionist measures. There are the crowd who always state we don't want them or they will never sell.

Even if only a handful of imported midsizers are sold each year in the US it gives more choice to the public.

If some are cheaper it will force the locally made trucks to be more competitive in pricing. I think its a win-win situation.

Cheaper midsizers will cut into some fullsize pickup sales, how much I couldn't answer.

Remember there are no full size pickup manufacturers outside of NA. The biggest pickup style vehicles I've seen are the Nissan Patrol and Toyota Landcruisers.

@Papa Jim
I agree with you whole heartedly. I think the Big Three will always dominate the US truck market.

But, why not allow some of the foreign (made overseas) trucks in without the taxes and protectionist measures. There are the crowd who always state we don't want them or they will never sell.

Even if only a handful of imported midsizers are sold each year in the US it gives more choice to the public.

If some are cheaper it will force the locally made trucks to be more competitive in pricing. I think its a win-win situation.

Cheaper midsizers will cut into some fullsize pickup sales, how much I couldn't answer.

Remember there are no full size pickup manufacturers outside of NA. The biggest pickup style vehicles I've seen are the Nissan Patrol and Toyota Landcruisers.

@Papa Jim
I agree with you whole heartedly. I think the Big Three will always dominate the US truck market.

But, why not allow some of the foreign (made overseas) trucks in without the taxes and protectionist measures. There are the crowd who always state we don't want them or they will never sell.

Even if only a handful of imported midsizers are sold each year in the US it gives more choice to the public.

If some are cheaper it will force the locally made trucks to be more competitive in pricing. I think its a win-win situation.

Cheaper midsizers will cut into some fullsize pickup sales, how much I couldn't answer.

Remember there are no full size pickup manufacturers outside of NA. The biggest pickup style vehicles I've seen are the Nissan Patrol and Toyota Landcruisers.

Hmmm... looks like I was right about that satellite echo. Looks also like nobody's been able to figure out how to block the echo, too.

The "big three" are falling over themselves to teach China etc how to build cars and trucks. It shouldn't be long till the tide turns...

I agree with Denver Mike. Small trucks don't compete with full-size. Full-size truck prices cannot go much lower. Small trucks will have to go lower if they want to even have a chance to compete.

Ford isn't missing the Ranger. And despite the disappearance of all these competitors - Colorado, Canyon, Ranger, Dakota, Suzuki sales of the Toyota Tacoma have remained fairly slow. Other small trucks have fared even worse. Nissan sold 5,645Frontier trucks last month, while Honda managed to move 1,645 Ridgeline pickups.

There's an assumption mid-size and full-size truck buyers are the same group. Not so much. Global competition will not lower the price of domestic because they couldn't get any lower. And full-size truck prices didn't drop during the '80s mini-truck craze/fad/invasion, so why would they drop now?

What WILL happen is global truck will sell for less here in the states, than they can and do elsewhere. Luckily, they don't have competition from full-size to keep their prices in check, outside of North America.

And the Big Horn, King Ranch and Platinum/Limited of small trucks will never be offered here. We don't look at small truck as high end 'luxury vehicles'.

Posted by: Denver|||Mike | Aug 5, 2013 4:59:52 PM


@BAFO - Everything you speak of is one gross exaggeration after another to favour global trucks. Give a REAL example (make/model) of a 30 MPG truck. Or the exact global truck (make/model) that can haul 2X the load of which (make/model) US truck? $27,000 gets you a well equipped (domestic full-size) truck, after rebates.


Posted by: Denver|||Mike | Aug 5, 2013 5:03:33 PM

Amen!

I see a different scenario , the european cab chassis vans and mini vans Will eat away at the overall pick up market .

@Robert Ryan,
I do totally agree with your comment, the US will become more like the French, but with slightly larger vans.

CAFE will choke full size trucks, I can see a way out and that is to use 2.5 to 3 litre diesels in the full size trucks.

I read somewhere in this thread a person disputes my $27 000 claim for the price of a pickup. But that Pentastar, 8spd with the little bed is the closet full size that can be compared to our pickups for FE, not work. This pariticular style of pickup is what will be the norm for US pickups in 5 years because of CAFE. Like I also stated it can't carry or tow much.

Our best performing pickup dual cab is getting 40mpg on the highway and that's US gallons.

I'm even getting 32mpg out of my diesel which is the same diesel that's going into the US Transit. It can tow 7 800lbs and carry 2 500lbs. They are even towing 30' fifth wheelers with the BT50 now.

After using Carilloski's AUD to USD pickup price converter (thanks Carilloski) our cheapest Ranger would cost about $18 000 in the US and it is getting 35mpg on the highway.

All I can say is the US has to change the direction the UAW, Big 3 and government are heading in and adopt the UNECE regs for pickups to remain affordable in the future in the US.

As I wrote before high tech, exotic materials will price them out of reach for most, like that Ram for $27 000. I hope sanity prevails.

I don't want to see the demise of full size 1/2 ton pickups, but the UAW seems to be hell bent on destroying them.

There is a great deal of surplus manufacturing capacity in the auto industry worldwide, which explains the disparity between pricing for compacts, sedans and coupes. Crossover SUVs are headed in the same direction. Not the case with half ton trucks.

You won't soon see Korea or Thailand building anything like a RAM or a Silverado. As a result, prices for these uniquely American models will remain where it is now, uncompetitive.

@DeverMike/Paul/Tom Lemon/Greg Baird/TRX4Tom/Dave/Hemi V8/Tom Terrific/sandman 4x4/lautenslager/zveria/Bob/US Truck Driver/Glenn/Jason/Hemi Rampage/smartest truck guy/Maxx/SuperDuty37/Ken/Ron or whoever you want to call yourself.

Quit the crap, really.

It's getting long in the tooth.

You want to debate, but it has to be on your terms.

Learn to debate with good information, then we might be able to have a decent debate.

Opinions are good, but if they are only your view to support the UAW, then how good are they. Look at what you guys have done to Detroit.

Terror tactics (union tactics) don't work on me.

If PUTC wants the UAW or whatever to control this site I suppose it's their decision.

It's not kids like I've been told by PUTC.

They don't seem to care. So this will go on.

@DeverMike/Paul/Tom Lemon/Greg Baird/TRX4Tom/Dave/Hemi V8/Tom Terrific/sandman 4x4/lautenslager/zveria/Bob/US Truck Driver/Glenn/Jason/Hemi Rampage/smartest truck guy/Maxx/SuperDuty37/Ken/Ron/Alex or whoever you want to call yourself.

Quit the crap, really.

It's getting long in the tooth.

You want to debate, but it has to be on your terms.

Learn to debate with good information, then we might be able to have a decent debate.

Opinions are good, but if they are only your view to support the UAW, then how good are they. Look at what you guys have done to Detroit.

Terror tactics (union tactics) don't work on me.

If PUTC wants the UAW or whatever to control this site I suppose it's their decision.

It's not kids like I've been told by PUTC.

They don't seem to care. So this will go on.

@DeverMike/Paul/Tom Lemon/Greg Baird/TRX4Tom/Dave/Hemi V8/Tom Terrific/sandman 4x4/lautenslager/zveria/Bob/US Truck Driver/Glenn/Jason/Hemi Rampage/smartest truck guy/Maxx/SuperDuty37/Ken/Ron/Alex or whoever you want to call yourself.

Quit the crap, really.

It's getting long in the tooth.

You want to debate, but it has to be on your terms.

Learn to debate with good information, then we might be able to have a decent debate.

Opinions are good, but if they are only your view to support the UAW, then how good are they. Look at what you guys have done to Detroit.

Terror tactics (union tactics) don't work on me.

If PUTC wants the UAW or whatever to control this site I suppose it's their decision.

It's not kids like I've been told by PUTC.

They don't seem to care. So this will go on.

@DeverMike/Paul/Tom Lemon/Greg Baird/TRX4Tom/Dave/Hemi V8/Tom Terrific/sandman 4x4/lautenslager/zveria/Bob/US Truck Driver/Glenn/Jason/Hemi Rampage/smartest truck guy/Maxx/SuperDuty37/Ken/Ron/Alex or whoever you want to call yourself.

Quit the crap, really.

It's getting long in the tooth.

You want to debate, but it has to be on your terms.

Learn to debate with good information, then we might be able to have a decent debate.

Opinions are good, but if they are only your view to support the UAW, then how good are they. Look at what you guys have done to Detroit.

Terror tactics (union tactics) don't work on me.

If PUTC wants the UAW or whatever to control this site I suppose it's their decision.

It's not kids like I've been told by PUTC.

They don't seem to care. So this will go on.

Looking at the times my "single" above post was made it seems odd that there is up to a 23 minute delay.

Oh, well, I wonder how that occurs?

I just made a post and it is no longer on the site.

Google.

I don't see foreign competition competing in the full size truck market. Full size trucks are limited to the North American market and with economies of scale and sharing platforms this is not feasible for foreign based companies manufacturing overseas. I do see full size trucks becoming so expensive with the new fuel standards that many who do not really need a full size pickup will look for more affordable options. Aluminum, carbon fiber, and alloys cost much more than steel and plastic and will drive the prices of the full size up. There will always be a market for full size pickups but in 10 to 20 years it might only be half of what it is now due to increasing costs.

I agree with Robert about the global vans being a viable alternative for many truck owners, especially businesses. Also a lighter diesel pickup getting 30 or more mpgs would sell at the right price. Those that really want a full size pickup will buy an American brand and most will buy the brand that they have always bought that will not change. Even if the full size pickups become twice the price they will still sell and even if at half the volume the manufacturers will still make a large profit. A larger price difference and higher mpgs would make it possible a midsize global market which would be possible without the Chicken Tax and the burdensome regulations that we currently have which I honestly don't see changing anytime soon. I would like to see a more open and fairer market place in trucks to at least give the consumers the choice. As to whether this will happen or whether consumers will change their preferences that would remain to be seen, but with the present regulated market nothing will change.

I feel that if they want to sell trucks here, they should build a truck plant here like Toyota and Nissan did and it will add jobs here. If not then to bad stay on the other side of the Border!

@johnny doe--I understand where you are coming from, but in reality Ford, Ram, GM, and Toyota have assembly plants in Mexico and Canada. The manufacturers are global.

@Jeff S - Everything in the truck category can and do chip away at full-size truck sales. Especially SUVs, vans and mid-size trucks. Add the entire lineup of the worlds small trucks to the US market and full-size trucks would hardly take a hit. Any big changes to the market affects all OEMs in some form or another. Give us all the worlds global trucks and more than likely, sales of small to mid-size cars, SUVs, vans, cross overs, wagons and such, would get impacted the most. But then foreign OEMs don't necessarily want to bring their trucks to American. It's a very unforgiving market and rebate are the rule. America uses small trucks as the lowest common denominator of disposable utility vehicles. Fleet, cheapskates and other bottom feeders love small trucks at reduced pricing. Otherwise, there's not much of a worthwhile market for small trucks in America.

The bottom line is foreign OEMs are concentrating on selling global trucks anywhere full-size trucks are not. Full-size trucks kill the profitability and limit transaction price of small trucks. Full-size trucks control the selling price of small trucks and the opposite could never happen... The tail doesn't wag the dog...........

@Jeff S,
I must disagree with you on the issue of Foreign competition getting into the full-size pickup market in the US. In fact, three Chinese companies are already planning their arrival.

First, Great Wall announced earlier this year their intentions to start sales around 2015, with their new Wingle CL, with Foton bringing its new Tunland over shortly thereafter. Both trucks should be about the size of Toyota's old T100, which is close enough. My understanding is that both trucks are currently in the pre-evaluation stage before entering the full blown testing stages later this year. They still need to address a few hanging issues, such as emissions testing, corrosion, and crash worthiness. Especially the last one. Remember the Coda EV? They were already dealing with slow sales (only 99 cars were sold since its introduction last July) and reliability problems, but then the car pulled a Brilliance BS6 and crumpled like a sheet of paper during a crash test, putting the final nail in its coffin. GW and Foton don't want that to happen, and they are trying to avoid that problem at all costs. Plus, Foton and Toyota are butting heads over the Tunland name, with Toyota saying it's too identical to Tundra.

Second, Chang'An stepped in to help prop up Tiger Trucks, who assembles the Champ 4500 in Oklahoma. Right now, the full-size Champ can only be driven legally on local roads in Oklahoma (or in states like Mississippi, where I see a Subaru Sambar on Meridian streets with current license plates and vehicle inspection sticker), but I recently found out that Chang'An wants to update the truck to make it legal across the country. How they will manage to keep starting prices around $13,000 will be interesting.

And don't count out Hyundai/Kia and Honda. Especially Honda. I believe they're planning something big with the Ridgeline once it returns for 2016.

@imoore--Maybe you are right, except there is such fierce brand loyalty among those who buy full size half ton trucks. The full size pickup market would be a tough nut to crack as Toyota and Nissan have learned. The Chinese make a full size truck that looks very much like an F-150 down to the oval emblem on the grill. It will still take time for the Chinese to get the quality but eventually they will.

I could see a pickup the size of the T-100 doing reasonably well, it would not compete directly against the big American full size pickups. I read an article about Great Wall looking for locations in the US to build an assembly plant. I fully expect that both GWC and Futon will be in the US in the near future. The market would be open for a reasonably priced pickup that is not too big and much better mpgs. I don't think the Chinese or Koreans will start out competing in the big pickup market because of Toyota and Nissan but maybe eventually.

It *could* but it hasn't.
Cheaper imports from other countries probably won't make a dent in the sales numbers of the current offerings because its a different market.

@DM-Possibly you are correct, but if you maintain tariffs and restrictions then any possibility of competing is gone. Why not eliminate the Chicken Tax, have reasonable fuel standards for smaller trucks that do not classify them as the same as compact cars, and let these trucks compete on a level playing field. Let the manufacturers take the risk and if they choose to compete then let them. What is the risk if a business is willing to take it. In otherwords do not force any manufacturer into making a smaller truck, but allow them to take the risk if they want to. The only opponents to this would be those who have a vested interest in the American auto manufacturers and the UAW. This is what is called a free market, to allow those who want to compete do so in a competitive market not protected with unreasonably restrictions.



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