2016 Tacoma

Ford and Ram Watch as Toyota and GM Cash-in on Mid-size Truck Market Explosion

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mid-size truck market

The mid-sized truck market has more than doubled in seven months.  Ford and Ram have nothing to sell.  How could this be?

Many years ago a new auto segment arose quickly and without warning.  Minivans appeared from Chrysler, and nobody at GM, Ford, Toyota or any other automaker saw it coming.  The mistake could be explained away because the vans were really a fresh idea.  The newest market to take off is not really that new at all.

The mid-size truck market has more than doubled in size since last fall when Toyota and Nissan were building and selling about 16,000 to 17,000 Tacoma and Frontier pickups per month with Toyota enjoying about two-thirds of those sales.  Perhaps GM noticed that Toyota was selling an aging design at a high profit margin.  Maybe GM noticed that the Toyota Tacoma had the single highest resale value of any vehicle in the American marketplace.  Or maybe GM just likes to build trucks and figured it might as well bring back its Chevy Colorado and GMC Canyon in case gas prices went through the roof.  For some reason, GM decided to return to mid-sized pickups, and it is now sharing the wild ride with Toyota.

2016 Tacoma

Toyota’s Tacoma for 2015 is an old design.  That does not mean it is a bad design.  The Tacoma has one of the most passionate fan followings of any vehicle.  Owners love their Tacomas and not even two episodes of rusting frames has brought prices or demand down.  When GM revealed its new Colorado and Canyon twins a couple years back, Toyota had a decision to make.  Circle the wagons, do a light refresh and watch their ownership of the segment be diluted, or take action.  Toyota took action.  First the company made (and announced) plans to increase its Tacoma production capability by 50% by adding a third shift.  That capacity just came on line in and sales went from about 11,000 units per month to 17,500 trucks sold this May.  The second thing Toyota did was redesign the Tacoma so completely that the only parts it reused according to its chief engineer were the door handles.  That all-new 2016 Tacoma mid-sized truck goes on sale in three months.

GM came back to the mid-size truck market in early winter of 2014, so the Colorado and Canyon now have been on sale for about seven months.  In just that span of time GM has captured a quarter of the mid-size market with the Colorado alone.  Not the old market, but the newly doubled in size mid-size market that saw about 35,000 trucks sold in May.  The Canyon is just icing on the cake.  GM’s factory is now also at three full shifts, and the trucks are flying out of dealerships with an average time on the lot of 11 days.

Meanwhile, Ford and Ram don’t have a truck this size ready to go for the American Market.  How did they miss it?  Ford sells a Ranger in the International market, but it is not produced for U.S. consumption.  Ram seems to have no interest.

We reached out to experts who cover trucks on a daily basis to get some insight on this.  First we turned to Patrick Rall.  Patrick is an editor and writer who is also a big fan and owner of Ram and Dodge vehicles.  He gave us the reason why Ram (then Dodge) quit on the mid-sized Dakota pickup in the first place, saying “The demise of the Dakota came about due to very lackluster sales, with the best annual sales numbers in the final few model years coming in 2010 when just 13,047 examples were sold. Within a five year span of time, Dakota sales dropped like a rock.  The reason for these terrible sales are a matter of opinion, but what it came down to was that the Dakota had gotten too big and too expensive when compared to the likes of the Ford Ranger or even the Ram 1500.”

We asked Patrick if he had any info on a future Ram mid-size truck.  He replied,  “Since the day that the Dakota’s demise was made official, the fairly large group of devout Dakota fans have been pleading for a new midsized Ram pickup. There have been rumors of a project on and off, but the last word was that the program in question had been shelved as lower gas prices boosted Ram 1500 sales. The Ram 1500 continues to sell well, but as the midsized truck segment continues to grow, it almost seems unfathomable that the quickly growing Ram brand won’t try to get into the midsized truck game once again.”
 Ford Ranger
We also spoke to Tim Esterdahl.  Tim’s an automotive content provider making a living as a truck guru.  Tim’s take on why Ford and Ram don’t have mid-size trucks in the pipeline is strictly business-based.  Tim says, “While it is true, customers clamor for both automakers to deliver such a product, neither Ford or Ram has the production capacity to spare on mid-size trucks.”  Setting aside the capacity problem Tim seems to think that it is not a great business case, pointing out, “The fact is full-size trucks offer much more profit than mid-size and both Ram and Ford are building as many full-size trucks as they can manage. Restricting that production to build less profitable mid-size trucks doesn’t make any business sense. “
So in the end, Tim and Patrick agree that the reason for Ford and Ram sitting out this new round of mid-sized truck love is that they are just too darn busy making more money selling even bigger trucks.  A good problem to have.  As long as gas stays about $2.75 per gallon.