Ford Motor Co., reacting to U.S. pickup sales that have gained momentum for almost two years straight, said it plans to add workers at an F-150 truck factory to boost production of its most profitable model line.
Bloomberg reported that Ford will hire a third crew at its plant in Claycomo, Mo., to boost F-150 output starting in the third quarter, the company said today in a statement. The No. 2 U.S. automaker is adding more than 2,000 employees at the factory for the extra pickup production and to begin building the Transit commercial van in mid-2014.
The F-Series pickup line is a juggernaut for Dearborn, Mich.-based Ford. It’s led the U.S. truck segment the last 36 years and has been the best-selling vehicle of any type in the country for more than three decades. Ford plans to make more pickups to keep up with demand after 21 straight months of increases for the F-Series as rebounding housing and energy sectors lift U.S. market share for Ford, General Motors Co. and Chrysler Group LLC.
“It’s a huge vote of confidence in our truck, our sales and what’s going on in the industry overall and the economy,” Joe Hinrichs, Ford’s president of the Americas, said in a telephone interview. “We wouldn’t be hiring if we didn’t think it was going to last. It is a strong indication of how we feel about our continued leadership in the segment.”
Kansas City Assembly will be capable of operating 120 hours per week after the third crew is added, up from the 100 hours per week that it’s been running with two shifts, Hinrichs said.
General Motors and Ford Motor Co. should see significant profit growth and gain market share in the next couple years in North America, largely fueled by new large pickups hitting the U.S. market.
The Detroit Free Press reported that GM’s new trucks are preparing to roll out this year and the expectation is Ford replaces the F-150 next year. Large pickups represent the primary tow vehicle for the RV industry.
The two domestic automakers are forecast to outperform the industry and pickups will account for the majority of volume gains until 2015, Itay Michaeli of Citi Research said Wednesday during a call with investors.
Citi expects large pickups to grow from 11.3% of the U.S. market in 2012 to 12.8% in 2015 when the total market is expected to hit 16 million sales and pickup sales will account for 2.4 million of them.
While the current average age of cars on the road is about 11 years old, the truck fleet is two years older.
GM has 41% of the trucks on the road and has the highest segment loyalty, all of which adds up to a strong potential pool of buyers for the new trucks preparing to hit the market. For GM, pickups will account for 27% of the mix by 2015 with about 944,000 sold that year. Ford is projected to sell about 920,000 pickups in 2015, representing 32% of their mix.
It’s good business. Profit margins on trucks are double that of small cars. Michaeli said GM could see a $1.1 billion earnings bump from pickups and Ford could expect $400 million once its new trucks hit the road. Before that, Ford could see some negative pricing as it improves incentives to compete with GM’s new pickups.
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Nothing stimulates automakers’ enthusiasm more than a mud-splattering pickup truck war.
According to USA Today, anyone cruising the North American International Auto Show floor at Cobo Center here this week will see the evidence: the 2014 Chevrolet Silverado and GMC Sierra, the Ram 3500 heavy duty, and an as-yet-undisclosed surprise from Ford on Tuesday (Jan. 15).
A segment known for intense buyer loyalty, robust profits and bragging over towing capacity has gotten its mojo back.
“We are calling this year the year of the pickup,” said Michele Krebs, senior analyst for Edmunds.com.
The segment is fiercely competitive and predominantly domestic, said Rebecca Lindland, director of auto industry research for IHS Automotive.
“It is the one vehicle in the global industry that is uniquely and forever American so bragging rights for pickups has a whole different meaning,” Lindland said. “It’s not just profits. It’s rock ‘n roll, apple pie American.”
While General Motors gave reporters a peak in December of the all-new 2014 Chevrolet Silverado and GMC Sierra, today at the show is their first public exposure.
“From hood to hitch, these are the most refined, best engineered pickups ever,” said GM North America President Mark Reuss. “GM has been a truck engineering leader for more than a century. I think we engineer our trucks better than the others guys do.”
The new Ram 1500 pickup has been on sale since October. The upgraded Ram 2500 and 3500 heavy duties go on sale this spring with more muscular towing capacity.
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General Motors is giving its big pickups a much-needed makeover.
The Associated Press reported that the company is unveiling new versions of its top-selling Chevrolet Silverado and GMC Sierra on Thursday. The 2014 models will go on sale by early spring or late summer.
The timing is good. The models roll into a market where truck sales are growing after a five-year slump. And GM’s current trucks are looking dated, hurting sales. The current trucks, last revamped in 2007, are the oldest on the market and have fallen behind newer models from Ford and Chrysler.
The revamped Silverados and Sierras are aimed at putting GM back in front. They look similar to the old models, but are a little more aggressive and aerodynamic-looking. The company also says the trucks will have stronger, quieter cabs, and updated steering, suspensions and brakes.
GM is offering a choice of three revamped engines: a 262-horsepower, 4.3-liter V-6 that GM says can tow a substantial trailer; a 325-horsepower, 5.3-liter V-8 will get better mileage than the current model, which gets 22 mpg on the highway; and a 6.2-liter V-8 with 376 horsepower.
Gas mileage and pricing of the trucks was not released Thursday.
The trucks should hit the market at a good time. The economy is improving and pickup trucks are starting to sell again. The housing industry, which has a direct relationship to pickup sales, is strengthening and should be in even better shape by springtime when the weather gets nicer. Plus, trucks now on the roads are aging because people kept them through the recession. The average age of a pickup in the U.S. is now 10.4 years, GM said.
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The federal government wants pickup truck manufacturers to introduce “game changing” technologies that help reduce greenhouse gas emissions, including hybrid technology, according to a proposal from the Environmental Protection Agency (EPA). And it wants to see it happen soon.
As reported by Pickuptrucks.com, under the proposal, manufacturers could get per-vehicle credits toward their corporate average fuel economy (CAFE) if they use “significant quantities” of hybrid technology on full-size pickups, starting in 2017.
What’s surprising is how fast the government wants to act. To be eligible for the credits, a truck manufacturer must use the technology on a minimum percentage of its full-size pickup production — 30% in 2017 and rising to at least 80% in 2021 for what the EPA calls “a mild HEV pickup truck.” Given that the Chevrolet Silverado 1500 Hybrid and the GMC Sierra 1500 Hybrid make up a small portion of pickup truck sales right now, it’s hard to imagine similar vehicles would make up 30% of a fleet in six years, let alone 80% in 10 years.
Pickuptrucks.com said that stop/start systems, regenerative braking, minimum battery voltage value and minimum energy storage capacity were among the technologies outlined in the proposal. The proposal also mentions that the government intends to offer a performance-based incentive credit for full-size pickups that significantly reduce emission below the CAFE target.
The proposal is part of an effort by the EPA and the National Highway Traffic Safety Administration to reduce fuel consumption and tailpipe emissions for the 2017-25 model years. The agencies want set up a national program to cut greenhouse gases by 2 billion metric tons and save about 4 billion barrels over the course of those models. President Barack Obama already announced tough new fuel-economy standards that will increase the corporate average fuel economy in the U.S. to 54.5 mpg for cars and light trucks built between 2017 and 2025.
The proposal is expected to be formally issued by the end of next month, and a formal ruling is expected by July 31, 2012.