The prevalence of the pickup in the construction industry
Trucks have been around in one form or another since at least the days of ancient Greece, gaining in popularity as design evolution has rendered them more useful for an ever-widening scope of purposes.
Translated from the Greek “trochos,” truck actually means “wheel,” rendering every wheeled vehicle in Greece a load-hauling truck. That classification was retained in pre-industrial America, where big wagon wheels were called trucks. With the development of the combustion engine, the entire vehicle was dubbed a “motortruck,” but, as with the moniker “motorcar,” the motor, so to speak, eventually fell off, leaving just the truck remaining.
Appellation notwithstanding, it was Karl Benz who designed and built the first truck incorporating an internal combustion engine in 1895. Three years later, fellow car builder Gottlieb Daimler built his version of the pickup, followed in turn by French competitors Peugeot and Renault. In 1900, when Henry Ford designed his third vehicle, it was a truck. Seventeen years later, he revolutionized the market by introducing the Model T 1-ton truck with the first chassis built specifically for trucks.
Since then, these workhorses have transcended the role of farm and field fundamental to become daily drivers for many urbanites. “The truck is unique,” Steve Hirashiki, senior manager of product planning for Nissan, contends. “Because Americans are do-it-yourselfers, it has an appealing configuration for both work and recreation.” But the cross-over influences that introduced creature comforts to heavy-duty truck design haven’t taken away any of the usefulness or rugged dependability of these powerful four-wheeled tools. Casual observation reveals that construction fleet sizes are increasing. A recent study conducted by Grading & Excavation Contractor magazine confirms the phenomenon, indicating that the average number of pickups owned by readers is nine. Manufacturers are taking note.
“The foundation of the heavy-duty truck market is the commercial user,” affirms Rich Bame, in Toyota’s marketing department and truck operations. Toyota aims to serve that customer by providing “the best mix of fuel economy and performance” in the upcoming 2007 Toyota Tundra.
It will be “full-size in every respect,” according to Bame, with a larger 5.7-liter V8 for more power; more towing capacity—an industry-leading 10,000 pounds; three cab choices; and additional capability. Not prepared to reveal fuel mileage figures, he vows “the numbers look good for fuel economy and ultra-low emissions. We’re not certified yet, but we’re targeting U-level. This is an exciting story!”
In the works for “many years,” Bame says Toyota has long coveted the full-size pickup market, admitting that its first “full-size” pickup didn’t meet commercial demands. “It’s a big step forward from the Tundra of the late ’90s. We’re catching up. The most challenging section of the market is the commercial side. They’re demanding and discriminating. The customer wants a bigger, more capable truck. By meeting more of their needs, I think we’re going to get a lot of consideration. A lot of the commercial market has wanted to drive a Toyota but not been able to because we were lacking features.”
No more. Because the launch date is too distant, the price and features have not been made public yet. However, Toyota anticipates so much consideration, a new US factory in Princeton, IN, will produce Tundras exclusively. “We’re doubling production because the demand is there.” Citing Toyota’s reputation as a technology leader, Bame says the commercial truck market is another opportunity for the company to take the lead, and with production doubled, that appears to be its game plan.
But Toyota’s competitors aren’t going to make that easy. Darryl Harrison, manager of Nissan products and public relations, is also watching the market. “The construction industry is very important to truck manufacturers. Nissan is doing its homework, doing research, and taking a closer look at the needs in this industry.”
The need, he says, is for more variation. Although Nissan’s Titan is strong in the market, with its 5.6-liter V8 and king cab and crew cab options, Hirashiki realizes that it doesn’t fulfill the market’s demand for variation. “Regular cabs dominate the market,” he says. “We’re not in that part of the business yet.” Instead, the Titan’s “regular size and capability” are the precursors of things to come from the manufacturer. “Right now, we’re focusing on fewer variations so we can ensure the product is done right—but we want to add more options and features over time. Everyone recognizes the level of competition.”
American manufacturers are very aware of the stiff competition from the Japanese, and are upping their game to match it. “Toyota and Nissan are coming in a big way,” predicts Pat Dougherty, director of fleet operations for Daimler-Chrysler. Recalling a cab chassis dropped in 2001, he says the company is “laser-focused on getting this cranking.” “This” is a Dodge Ram 3500 cab chassis, set to launch this fall. Dougherty says it has the best powertrain in the industry, with a 4.7-liter Hemi or a 6.7-liter Cummins diesel—upgraded from the current 5.9-liter. With best-in-class features, such as the largest cab room in its segment, a new transmission, and better fuel economy, Dougherty hopes to recapture the commercial truck market. “We’re very interested in this market segment. The commercial truck business is growing rapidly,” he says.
It’s growing more competitive, too. “Japan has tried to get into the full-size market for years, but hasn’t succeeded yet,” states Rob Minton, communications director for GM fleet and commercial trucks. Aware of the new models arriving on the scene, he maintains that GM can “beat them head-to-head with our existing truck, but our new models will blow them away.”
The new models are a totally-new-from-the-ground-up Chevy Silverado and similarly all-new GMC Sierra, both available with a 4.8-liter V8, a 5.3-liter V8, or a flex-fuel model that runs on gasoline or ethanol. Other improvements include beefed-up suspension with a heavy-duty locking rear differential, in two-wheel drive or four-wheel drive.
“The Silverado and Sierra are the best-selling light-duty trucks in the country,” Minton claims. In addition, popular medium-duty Class 4 trucks from GM, the Chevy Kodiak and GMC Top Kick, are “very popular with our commercial customers. They’re easy to drive and maneuver because the design includes a steeply sloped hood to allow better visibility, and a tight turning radius.” Various body styles and engines, such as the Duramax turbo diesel with Allison transmission, make the GM offerings attractive. “They can be purchased with uplifts for a stake bed, dump body, or tow truck. Customers can get any engine/cab/chassis configuration with whatever they want on the back.”
Now Featuring …
Not only has Ford been the market leader in light- and heavy-duty pickups for a long time, according to Wes Sherwood, Ford truck communications manager, they also lead the market in offering choices, whether in cab size, engine, capability, function, or interiors. “We have five series of F150 alone—Ford’s best selling pickup—and there are literally a million ways to customize it.”
That’s a far cry from the first factory-assembled pickup Henry Ford debuted in 1925, which featured a cargo box, adjustable tailgate, and heavy-duty rear springs, all at a price of $281. Prior to that factory roll-off, Ford and Chevy produced only the chassis cowl: chassis with engine and transmission; front sheet metal including hood, front fenders, grille, and headlights; and an instrument panel, steering wheel, foot pedals, and shift lever borrowed from an automotive line. The customer was expected to provide his own cab and body. These days, customers expect a lot more.
“Once a customer gets used to features, there’s no going back,” Harrison muses. “The truck didn’t evolve for many years, but Nissan is bringing more features: interior power points, air conditioning. We were one of the first to offer Navistar and backup sensors.” Hirashiki points out that Nissan was also one of the first to offer the utilitrack system—a system of moveable tracks inlaid into the C-channel in the bed. It holds toolboxes and bed dividers, and allows the operator to change the location of the tie-downs.
Choices can make a sale. As Harrison says, the challenge is that you can’t offer a single product. “Customers have a broad range of needs; you have to be flexible.” Because Nissan understands that, they’re adding a long bed with 1 foot of extra room, and a diesel engine.
Determining what choices buyers want can be an onerous task. “We do more than the traditional market research,” claims Randy Jones, communications manager for commercial vehicles with Dodge. “We’re aggressive; we go to great lengths to reach out to the customers and industry leaders. We put all their feedback into the Ram 3500.” Some of that feedback translated into an upgraded suspension package; 10 choices of wheels and tires; and different axle ratios. The 2500 and 3500 models have a solid front axle with coil spring, but the “gentleman truck,” as Dougherty describes the half-ton pickup, retains independent front coil springs for better ride and handling. Both have the traditional longitudinal leaf spring in the rear.
In addition to accessories like toolboxes and ladder racks for customization, GM offers creature comforts that have “gone way beyond just air conditioning,” Minton laughs. “The level of luxury is amazing for a utility vehicle: XM satellite radio, Bose stereo, heated seats, leather power seats, sun roof, fancy wheels. … Often, these are work trucks during the day and personal trucks at night. Guys want the extras.” That does not mean, he cautions, that “we’re compromising the capability of the truck because it’s luxury; we’re just not compromising the comfort because it’s a truck. Our motto is ‘Work hard, play harder.’”
To do that, the toys have to be sturdy. Although Dodge is adding more options (because, says Dougherty, that’s the trend) and focusing on creature comforts—another trend—the Detroit-based manufacturer hasn’t abandoned the basics. The Ram 3500 features a six-speed automatic typically offered only on larger commercial vehicles that previously wasn’t available in the US on 1-ton trucks. The alternative is a six-speed manual, popular in combination with the diesel engine because of its low-end torque that makes hauling easier. With big engines, big brakes are a necessity, and the Ram 3500 carries the largest brakes in its segment. A Jake brake is available with the Cummins, Dougherty says. “It’s good for hilly pulling.”
Size matters in the cab, as well. Dodge spans a range from regular cab to the biggest quad cab on the market, skipping the crew cab. In 2006, Dodge introduced the mega cab. “We joke that if you’re selling it in New York, it can double as your apartment!” Dougherty laughs. Dodge isn’t the only one increasing cab size. Toyota made innovations in the regular cab. “We now have the largest middle-size cab—it’s comparable to the Dodge quad cab,” Bame boasts. A double cab provides additional space.
Ford offers more combinations of cab, bed, and engine than F-Series Super Duty Marketing Manager Robert Keller has time to list, but he claims that Ford’s big advantage is its array of options beyond cab and engine. Choices in fitting out an F Series truck abound, from a crew cab with four full doors and vinyl seats to the leather-clad captain’s chairs of the Harley Davidson edition; even the base XL’s décor package includes chrome bumpers and upgraded headlamps.
Despite a shift toward more upscale vehicles with popular creature comforts, Keller says, “We have many packages and options that are more functional, such as a snowplow prep package, heavy service suspension for towing and hauling, and a pickup box delete for after-market options and uplift.” In fact, he adds, Ford offers pre-wired switches for easy up-fitting. “Flexibility is the key,” Sherwood confirms. “People want more: more choice, more luxury, and more high-end capability.”
Capability comes in the form of adjustable spring rates, dual alternators, bigger wheels and tires, power take-off for hydraulic powerheads, and an integrated trailer brake control on their heavy-duty models. With over 80% of Ford’s heavy-duty trucks featuring this functional and aesthetically pleasing safety item, Keller marvels at the fact that two years after the company introduced it, Ford is still the only manufacturer offering it.
The Bottom Dollar
Minton is quick to point out that J.D. Power and Associates named the Sierra and Silverado among the best trucks on the market. But after all the manufacturer and “expert” rhetoric, what are customers really interested in? Of more than 30 million new car pricing reports at the Kelley Blue Book Web site in May 2006, the most popular search category was the pickup. The top-10 searches in the truck market include:
- Toyota Tacoma Double Cab and Tacoma Access Cab
- Ford F150 SuperCrew Cab and Super Cab
- Honda Ridgeline
- Toyota Tundra Double Cab
- Nissan Frontier Crew Cab
- Dodge Ram 1500 Quad Cab
- Ford F250 Super Duty Crew Cab and Ranger Super Cab
While the Kelley site includes all consumer and commercial truck searches, the heavy-duty full-size pickup still reigns in the construction industry. Reasons include a reinforced chassis, high-powered engine, and the highest towing capacity and payload of any pickup on the road. According to MSN Autos, there are eight models of full-size heavy-duty pickup trucks for sale in the US, with base retail prices ranging from around $22,000 for a Ford F250 Super Duty XL Regular Cab 2WD to more than $41,000 for a GMC Sierra 3500 SLT Crew Cab 4WD.
“More factors than just gas price go into buying,” explains Sherwood. “You have to look at long-term costs: fuel efficiency, durability. Capability is also important; you need more grunt for towing and hauling. Seventy percent of our customers buy heavy-duty trucks like the F250 and above. ‘Built Ford tough’ has been our tagline for 30 years, but it’s more than just a tagline.”
Bob Stover, vice president of business development for Summit Contracting Inc., says his fleet of approximately 40 pickups comes mostly from one Ford dealership in Evansville, IN, because the dealer “was good to our owner when he started out.” Stover says the dealer is competitive and dependable, but because the contractor is now doing a lot of work with Toyota, there is talk of integrating Tundras into the fleet this fall. For now, their estimated $6 million in “yellow iron,” or heavy equipment, features the blue oval. Project managers, estimators, and support staff receive F150s, while site operations personnel get F250s or F350s, depending on their hauling needs.
Hauling was a concern for Crenshaw & Sons, a 52-year-old grading and excavation company in Louisville, KY, that hauls a lot of sand and gravel. However, other factors more heavily influenced company owner Frank Crenshaw when he updated his fleet. He stayed with Dodge because of the price, guarantee, and durability. “We had older Dodges; they don’t rust like other vehicles.”
For Appling Brothers in Macon, GA, another grading and excavation company, the reasons are similar but the marque is different. The man in charge of purchasing 20 pickups prefers to go nameless, but said the main reason he chose GM trucks was the employee discount offered the contractor. “We got them for the same price we paid for the last ones. It seemed like a good deal.” He opted for extended and crew cabs, in 2WD and 4WD for his foremen.
Incentives and rebates often attract buyers, but Hirashiki cautions customers to be mindful of the total cost. “There’s a lot to consider,” he says. “Incentives aren’t part of Nissan’s program; we don’t go in that direction. Their MSRPs are higher—it’s a little trick.”
Other discounts apply at specific times. Historically, Minton reminds, as new models ramp up, good deals abound on older models. Bame points out that “this is the last part of the life cycle for the current-generation Tundra. It’s been a good value any way, but now there are price reductions.”
Keller says Ford’s incentives are lower than those of its competitors (by whom he means Chevy and Dodge), but he says it hasn’t hurt sales. In fact, he points out that the “vast majority” of Ford trucks are purchased, not leased. “We are the market leader. Full-size pickup customers are more brand loyal than any other segment of the industry. Why? We give them specific reasons to be loyal.” He cites more variety and recent improvements in suspension for a better ride that allows the truck to alternate between work and play as key factors in the popularity of this versatile vehicle. Sherwood believes it’s a combination of quality and an enduring bond. “We’ve had a connection with the public for a long time that is not easily disrupted by the competition. It’s hard to beat an established brand.”
Minton knows brand loyalty is strong and the need to get a good price pervades the industry, but he advises to look beyond the window sticker price. “There’s so much to look at beyond the window sticker. There are several components to cost: initial and long-term.” One long-term benefit offered by GM is an oil life monitoring system that tells the driver the percentage of oil life remaining. “With the sophistication of the engine, transmission, and components, you don’t need to change the oil every 3,000 miles or three months. This system gives an accurate gauge indicating when you do need to change it.” He says, depending on driving conditions, the average interval is 5,500 miles. As every fleet manager will quickly recognize, that’s a cost-saver. To help fleet managers keep track of this variable, GM provides the Business Vehicle Manager, which works through OnStar to generate monthly reports on the oil status of every vehicle in the fleet—another time-saving task.
Oil isn’t only one form of profit-stealing petroleum. It’s no secret that the price of gasoline has exceeded arm-and-a-leg prices. Fueling a fleet of four or 40 is a pricey adventure. Autobytel.com lists the number-one gas guzzler as the Dodge Ram SRT-10. To put that in context, the Dodge edged out a Lamborghini Murcielago. A Ferrari F430 was only 10th in the ranking. Taking only trucks into consideration, Dodge had three in the top 10 (SRT, Ram, and quad cab Ram); the Chevy Silverado SS extended cab was second; Cadillac Escalde third; GMC Sierra CrewCab fourth; and Ford placed twice in the rankings with its F150 and F150 SuperCab. Those rankings loosely matched the 2005 ratings by the Union of Concerned Scientists, which also included the Toyota Tundra in its Top 10.
The Engine Debate
“Fuel efficiency is an unmet need,” Hirashiki sighs. “In fact, it’s gotten worse. Those who may not need a truck don’t buy one. Interest in the V6 is increasing. So is interest in diesels. Customers are very practical. Diesels are more expensive initially, but they get 30% better fuel economy. The challenge to the industry is the ’07 emissions regulations that drastically reduce sulfur. It’s going to add to the cost of diesel fuel. It’s a struggle; how do we offer a diesel that makes financial sense to the customer?”
|Look for an improved combination of fuel economy and performance in 2007's Toyota Tundra.
When diesel fuel costs are on par with the cost of gasoline, diesel engines are in demand, assesses Dougherty. “Fuel economy is greater in a diesel, maintenance costs are lower, they have great torque under load, and now they’re quieter. They keep getting better.” Sure, the sticker price is higher, but, like Minton, he splits the tally into two columns: acquisition cost and life-cycle cost. “When a rep sells multiple units—10 or more—it’s easy to sell the life-cycle cost idea to a customer.” He explains that Daimler-Chrysler is the largest commercial manufacturer in the world, producing more diesel engines than anyone. Therefore, it was only logical to expand its truck line by adding a diesel model.
Marketing to a Tough Crowd
It might seem that pickups, those ubiquitous utility vehicles, are everywhere. But each manufacturer wants a bigger market share. “It’s a challenge to get people to consider Nissan,” bemoans Hirashiki. “We’re new to the game. Unfortunately, when Toyota introduced its V6, seven-eighths-size pickup, it poisoned the well. People think the Japanese can’t build a full-size pickup.” Fighting that xenophobic sales block, he contends that imports are strongest on the coasts; however, middle America is “where truck sales are strong.”
|Not only are today’s pickup trucks more functional; they also provide such luxuries as a more comfortable expanded cab.
Battling the import designation, Harrison considers Nissan a domestic product: R&D is conducted by an American staff, and the truck is built here, sold here, serviced here. “Technically, it’s a foreign brand, but I consider it truly American. It’s an image problem we have to overcome.” Hirashiki expects to overcome it with quality and service. “It’s not just a product; it’s the dealer network. When trucks go down, contractors lose money.” To reduce downtime, Nissan has added a new division specifically to service light commercial vehicles so they get back on the road more quickly.
Dodge has a similar separate area for commercial customers at select dealerships. “Our business link dealers offer better, quicker service to commercial customers,” explains Dougherty. They also provide loaner vehicles, as well as discounts on parts and service. “We’re doing a lot to grow our commercial business,” adds Jones. “We’ve expanded our portfolio; we’re doing things we never did before.”
One thing Dodge has always done, Jones says, is differentiate its product through appearance. “We separate ourselves from our competitors by design. Our customers like that. People want choices.”
People also want perks. GM’s Business Choice incentive program for qualified commercial customers benefits small business owners in particular. Existing incentives include a cash-back option for commercial up-fit ranging from $500 to $1,200, a $500 Lowe’s gift card, or a $600 credit on a GM business card that can be used anywhere and earns points toward the next GM purchase. Added incentive options include a pickup toolbox and rack, a $350 to $500 Staples gift card, or an OnStar package on commercial up-fit.
The program is “huge,” says Minton. “GM has done a good job of speaking to the professional-grade industry. We hit the nail on the head. We know what it takes to be a pro: The truck is a tool; contractors need it to make money. Our business dealers understand that. They offer all-night service hours, they have bigger bays, and they stock inventory.”
According to GM, “a recent study showed that Business Choice increased sales by 9%, and 15% of buyers increased the content of the vehicles they were purchasing. Small businesses are just as eager to earn rewards toward vehicle purchases as anyone else, and the earnings can make a significant difference in their ability to purchase vehicles.” The Business Choice program “allows small business owners to earn rewards that can provide a significant boost in commercial vehicle purchase power.”
It’s no accident that GM sells 600,000 trucks a year for commercial use. “We target the construction industry by advertising in contractor and landscaper magazines, attending trade shows, and promoting our business central dealers,” Minton announces. “Construction is an important market for us.”
It’s an important market for Ford, as well, and, as Sherwood explains, Ford is going to great lengths to “meet the customer where they are.” One way the company is doing that is by partnering with Home Depot and displaying Ford trucks during Contractor Day at the Depot. “We listen to our customers and our dealers. We’re in the field and other areas where we can reach our customers.”
Three avenues for accessing customers include racing, country music, and outdoor activities. “Truck customers are racing fans; 40% follow NASCAR.” They also follow open-wheel racing, which explains Ford’s sponsorship of the Champ Car series. The message resonates through music as loudly as through a turbocharged exhaust note, so teaming up with Ford fan and country singer Toby Keith imprints Ford into the minds of another kind of fan, while commercials featuring American Idol winner Taylor Hicks cross over to a general audience for both cars and trucks. “It’s a hugely competitive market, and we’re not getting off the gas. We want Ford entrenched in the industry.”
Entrenched, it seems to be. Ford sold 900,000 F Series trucks each of the last two years. Keller notes that Ford is aware of Nissan’s intention to enter the heavy-duty truck market in 2009, but says, “We’re not changing our approach.” With steady sales and a market share that continues to increase, Ford is able to ride out a market somewhat softened by gas prices. “People need trucks for doing stuff,” Sherwood reflects in an understatement that transcends time and tires.
Writer Lori Lovely focuses on topics related to transportation and technology.