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Report: Gas Spurs Rethink on Smaller Pickups

Posted By RVBusiness On March 12, 2013 @ 11:39 am In Breaking News | No Comments

Rising fuel prices have General Motors Co. and Chrysler Group LLC taking a second look at peddling smaller pickup trucks — vehicles that the Detroit Three auto makers abandoned in the U.S. amid weak demand.

The Wall Street Journal reported that GM is planning to revive its Chevy Colorado and GMC Canyon in late 2014, and Chrysler is considering a replacement for its Dakota. Both see the vehicles helping them to hit higher fuel-economy targets and to regain market share from Toyota Motor Corp.’s  Tacoma, the current top-selling small hauler.

“We believe there will be a growing number of pickup truck buyers in the future that will want fuel economy,” GM North America president Mark Reuss said.”With our new trucks, we will be saying: Here is something really fuel efficient.”

A return represents a risk for Detroit’s auto makers, which haven’t been successful in convincing buyers to downsize to smaller trucks, and which carry smaller profits.

GM halted production of the Canyon and Colorado last August and had no upgrades ready due to its 2009 bankruptcy filing. Chrysler quit making the Dakota in 2011 after years of unimpressive sales. Ford Motor Co. dropped its Ranger pickup in the U.S. in 2011 and hasn’t looked back.

Barclays Capital estimates auto companies earn between $7,000 and $10,000 on each full-size pickup because they command higher prices in dealer showrooms, while midsize trucks bring closer to $3,000 to $4,000 a vehicle.

“The market is small. It is very small. So you have to be careful when you explore the opportunity to get back into it,” said Fred Diaz, chief executive for Chrysler’s Ram truck brand. “One thing we do know, we want a vehicle that has high miles per gallon to help us with our [corporate average fuel] economy needs.”

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