The fast-moving light truck market

Nation's Business, Oct, 1985

An estimated 400,000 Americans are trading in automobiles for new light-duty trucks or vans this year, continuing a five-year trend that has made light trucks the most dynamic segment of the motor vehicle market.

John D. Rock, manager of the GMC Truck & Coach Operation, reports that roughly 3 of 10 new vehicles sold in the United States today are trucks, the highest truck-to-passenger car sales rate in history.

Paced by light-duty truck popularity, truck sles last year exceeded 4.1 million units, an all-time record. Rock projects the 1985 figure at 4.3 million, with 93 percent in the light truck segment.

The Motor Vehicle Manufacturers Association also projects a good year in its quarterly report, "The Motor Vehicle's Role in the U.S. Economy." The association puts truck retail sales in the second quarter of 1985 at an annualized pace approaching 4.5 million--10 percent above the same quarter of 1984. Light trucks sold at an annualized rate of 3.4 million units, 7 percent above the equivalent quarter of 1984.

Light pickups and vans are particularly good products from the manufacturers' standpoint because they use automobile componentry, allowing tooling costs to be amortized across a broad passenger car base. This also makes many of them excellent consumer buys; sticker prices are competitive with autos.

Other reasons for their popularity with consumers: economical four- and six-cylinder engines, a short wheelbase for easy turning, better visibility and comfort, four-wheel drive, durability and constancy of style.

Ralph Kramer, public relations director for General Motors' Chevrolet Motor Division, says that in the showroom, "the buyer is looking for a vehicle--car or truck--that fits his needs. That vehicle is increasingly a pickup or van."

Kramer notes that Chevrolet light trucks and vans have set sales records for two years and will likely set another this year.

"We are pulling heavily from the passenger car market," he says. "A lot of these buyers would have gone for a station wagon a few years ago."

Says GMC's Rock: "Manufacturers are now building light trucks with new production technologies. Our GMC Safari vans are a typical example. Although they are built at a Baltimore plant that dates back a half-century, it has been converted to a factory of the future with unsurpassed computerized high tech processes, including use of robots."

The Safari is a minivan, a vehicle positioned somewhere between a full-size van and a passenger station wagon. There are two Safari models--a "people-mover" setting up to eight and a commercial "cargo-mover" with up to 151 cubic feet of cargo space.

Ford's en try into the minivan market, the Aerostar, seats seven passengers "in luxurious comfort" and has maximum cargo space of 175 cubic feet. In addition to families, Ford expects the Aerostar to be used by small businesses, corporate sales people, utilities, taxi companies and van pools.

Dodge has both full-size vans and minis in its product line, but the Dodge Ram pickup continues to outsell all other models. It was, in fact. Chrysler Corporation's top selling nameplate--autos included--for the 1985 model year. Pat Keegan, general manager of Dodge Truck Operations, says a number of optional packages will be available on the Ram pickup in the 1986 model year, which will "make it easy for the buyer to tailor his or her truck to today's lifestyle."

Keegan explains that "we are seeing pickups used more and more as a second car. Dodge's options for 1986 allow buyers to obtain an interior more like a passengers car's while retaining functional Ram work features."

Isuzu, Mazda, Mitsubishi, Nissan and Toyota have been formidable competitors for U.S. manufacturers in the light truck field.

One reason: There have been restrictions on sales of Japanese autos here, but not on Japanese trucks, so the manufacturers have pushed trucks among their dealers.

The Japanese import share of the light truck market was 17.9 percent in the second quarter of 1985, according to the MHVA. That was 1.6 percentage points above 1984's second quarter penetration of 16.3 percent.

Curt Von Zumwalt, Toyota Motor Sales U.S.A. product news manager, says Toyota is No. 1 in sales of trucks in the half-ton load capacity category. He says many small business people, like plumbers and carpentry contractors, "find they don't need large trucks and turn to ours for cost benefits."

On the other hand, the full-size vans and pickups traditionally used as delivery and service vehicles by a variety of businesses frequently do not provide the flexibility, cargo capacity or durability that many businesses need. Distribution and service companies increasingly are turning to Class 3 to 5 trucks, with carrying capacities from 5,000 to 10,000 pounds. Last year 6,563 of these trucks were sold, a 528 percent increase over 1983.

Iveco Trucks of North America manufactures a full line of diesel-powered trucks in this size range and leads in it. Iveco's Z-Range diesels can be equipped with a wide variety of cargo bodies, making them easily adaptable to any kind of business. In addition, the trucks have a long service life, and their engines, which carry a 100,000-mile warranty, boast an average efficiency of 17 miles per gallon.