Automakers Reap Profits in Luxury Truck Sales
The growing niche of $50,000 pickups – replete with polished wood trim, custom leather interiors and 20-inch wheels – is becoming increasingly important to automakers.
“We don’t know where the top in this segment is,” said Fred Diaz, chief executive of the Ram brand.
According to a report by the Dallas Morning News, these high-end city-slicker pickups – at least 14 models are now available – represent far more than just some glitzy industry anomaly. They can generate $15,000 or more in profit, boosting revenue in a segment whose sales have dropped more than 25% since 2008.
Ford planted the seed for the niche more than a decade ago with its first four-door, crew-cab pickup, which then led to the specialty Harley-Davidson edition of the F-150 in 1999.
Crew cabs provided room for a family or five adults, making pickups more practical as well as more carlike. They also opened the door for a vast array of comfort features.
The company’s latest bruiser in a tux, the Super Duty Platinum, can easily cost more than $60,000 – twice the price of a base Super Duty, which includes the F-250 and F-350 models.
Luxury trucks get snapped up by successful contractors who use the plush haulers as offices and want to convey a well-heeled image to potential clients. Affluent horse people buy them as flashy, comfortable tow-vehicles for $100,000 trailers and $20,000 horses.
And then there are the lawyers, doctors, executives and entrepreneurs who trade their BMWs and Mercedes-Benzes for luxury trucks on the weekend so they can tow big boats, recreational vehicles, classic cars and racing vehicles.
“All you have to do is go to a horse show and see how beautiful those trailers are,” said Mark Williams, editor of PickupTrucks.com online. “You need the right truck to pull them, so a $60,000 pickup towing a $150,000 trailer doesn’t seem unreasonable at all.”
When Ford introduced the Platinum model of its light-duty F-150 pickup in 2009, it expected the truck to account for about 3 percent of F-150 sales.
“It’s now running at 6 to 8 percent of our sales, and we’ve already got more orders for the (larger) Super Duty Platinum than we had anticipated,” said Doug Scott, Ford truck group marketing manager.
In fact, pickups that cost more than $40,000 account for half of all Super Duty sales and 30 percent of F-150 transactions, Scott said.
“I don’t personally think there is a top end” to the niche, Scott said. “We saw the need. These were guys who didn’t want to compromise on refinement or capability.”