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Makers see life in troubled small pickups

Compact pickup sales are down, but new, more stringent corporate average fuel economy rules may be prompting automakers to view the segment more favorably.

Automotive News
The Ram brand is considering a Dakota successor.
The Ram brand is considering a Dakota successor. Dodge

The compact pickup market still has a pulse, thanks to General Motors' decision to keep building the vehicles in the United States.

And last week, Chrysler Group's Ram brand said it is still studying a replacement for the Dakota, which went out of production this summer.

Some automakers themselves can shoulder part of the blame for the segment's slide. They regularly discount their full-sized pickups, cannibalizing sales of compacts. In 2000, sales of compact pickups were nearly 1.1 million. In 2010, they had fallen to 265,278.

But new, more stringent corporate average fuel economy rules may be prompting automakers to view compact pickups more favorably.

Price has to be right
Ralph Martinez, a Portland, Ore., multifranchise dealer, says the Chevrolet Colorado and Dodge Dakota are tough sells.

With a sagging economy, Martinez's buyers are almost exclusively those who need pickups for their livelihoods, and they prefer full-sized pickups, he says. Discretionary buyers who bought pickups for lifestyle reasons have gone away.

If automakers want to succeed with compact pickups, they will need something "revolutionary," he says.

"It's got to be cool-looking. If there's not that much of a price difference, don't bring it. They're not going to spend the same amount of money for a truck that offers nothing but tighter space."

Compact pickups can help automakers meet CAFE standards, but the situation is complicated.

Consultant Jim Hall of 2953 Analytics says the investment necessary to develop a high-mileage compact may be too high given that stickers on compacts are relatively low.

That may help explain why Ford has decided against continuing its Ranger compact pickup in the United States, he says.

"Here's a vehicle you have to sell on price being made more expensive," he says.

The base 2011 Ranger with a four-cylinder engine achieves 27 mpg on the highway. But the base 2011 full-sized F-150 with a six-cylinder engine gets 22 mpg on the highway.

Meanwhile, GM plans to build compact pickups at its Wentzville, Mo., plant. Information was released last month by the UAW without a timetable for production.

The vehicles are expected to replace the Chevy Colorado and GMC Canyon, both compact pickups now built at GM's Shreveport, La., plant, which is scheduled to close by June 2012.

The compact pickup was developed on a front-wheel-drive platform and sold globally. Last March, GM unveiled the Colorado pickup concept in Thailand. This month, GM plans to begin building the next-generation Colorado at a plant in Thailand. GM hasn't confirmed the plans for the Missouri plant.

Ford says no
Ford's redesigned Ranger will be sold in 180 countries beginning this month in Australia. Unlike GM, Ford has no plans to sell that pickup in the United States. The current Ranger's U.S. production is scheduled to end Dec. 22.

Fred Diaz, CEO of the Ram brand, said last week that Ram is still studying a replacement for the Dakota and has not ruled out any Chrysler or Fiat platforms.

Asked by a journalist whether Ram might consider even the Fiat Strada, a small pickup sold in Brazil, Diaz said: "We continue to study all Fiat- and Chrysler-based platforms as a potential Dakota replacement. We have not ruled out any platforms."

(Source: Automotive News)