AOL Autos, March 14, 2010


Truck Wars: Even with Heavy Duty Trucks, the Fight Turns to Green

With Ford Super Duty Launch, It's Still Detroit vs Detroit As Japanese Can't Play

Al Peterson's 1999 Ford F-Series pickup is holding up pretty well. It's got 221,000 miles on it. But the Asheville, NC contractor is thinking of trading up this year to a Heavy-Duty pickup, especially since he picked up a trailer at an auction that will easily hold more than 10,000 pounds of building supplies. Peterson, who has previously owned both Fords and Chevys says he has been "noodling around the Internet" looking at information about both the new Ford Super Duty hitting showrooms this Spring, as well as the Silverado Heavy Duty coming later in summer. Unfortunately, for Dodge, he has already checked out the all-new Ram Heavy Duty and passed.

"This is a big deal for me," Peterson said. "I'm 50, and I want this to be the last work truck I have to buy before I retire."

It's a big decision for Peterson, and it's big stakes for Detroit. The overall pickup market was down with the whole industry, more so because the housing and new construction industries have been harder hit by the economic downturn than others; and so goes housing, so goes pickup sales. The introduction of new heavy duty pickups this year, in full marketing flower by this Fall, might turn out to be well-timed if economists predicting some economic growth by then are actually correct.

But the companies are not counting on growth. And Ford in particular sees opportunity to steal customers from Chevy/GMC and Dodge. Reputation, capability, service at the dealer and brand imagery are vitally important among truck buyers, especially heavy-duty buyers. But whether the customer is Peterson, who is buying one truck, or Claude Masters, Florida Power and Light's vehicle acquisition and fleet manager who manages thousands of heavy-duty trucks, the priority for both has changed since the last time they made big purchases. It's gone from towing, payload and off-road capability to fuel economy.

"Don't get me wrong," Masters said. "Capability is hugely important, but Chevy and Ford are so close on those things that cost of ownership, and especially fuel economy, is top of my list right now." Peterson adds, "If I can pencil out big savings on fuel over the next ten years, that's gonna factor big when I pull the trigger."
Where Is Toyota, Honda and Nissan?

Where there is a fuel economy fight, you expect to find Asian automakers in the ring. Not this time.

Toyota and Nissan made huge noise three and four years ago as they ramped up their Tundra and Titan full-size pickups respectively. The plan was to put a hurt on Detroit's hammerlock on the uber-profitable full-size-truck market to establish credibility in the light-duty segment, and then pursue the HD segment. But it hasn't gone well. Nissan has already bagged its truck aspirations, and pivoted to pursuing the commercial delivery-truck market instead. Toyota's Tundra got some good reviews and ratings. But they were heavily discounted out of the gate and saw Detroit out-flank it with a retail strategy that saw Ford and Chevy dealers working double-time not to lose buyers to Toyota. Toyota's San Antonio workers have probably built as many park benches and fences as trucks, busy. Toyota executives say not to look for heavy-duty, especially diesel powered versions, any time soon.

"Full-sized trucks is the one market where I feel confident saying Detroit will continue to totally dominate as far as the eye can see," says James Hall of 2953 Analytics.
Ford's new Super Duty rolls into dealerships this Spring. According to the specifications released by Ford, Chevy and Dodge, Ford will lead or at least edge out Chevy on most of the key measurements of capability: conventional towing, fifth-wheel towing, payload limit, etc. But it's pretty close between the two. Where Ford is hoping to create the biggest gap is in fuel economy. "Having 500 more pounds of towing capacity, or 10 more horsepower doesn't cut much ice, though it does give you a 'best in class' headline on the comparison charts," said Ford's diesel manager Adam Gryglak. "But we decided the one thing we could do that would make it really hard for the competition to match was fuel economy."

He may be right. On a Super Duty preview in Prescott, Arizona, Ford had journalists use the trucks on a rock crawl, pulling 26,000 pounds, driving through 8 inches of mud, up and down gravel, dirt roads. But the star of the demonstrations was fuel economy. A caravan of journalists drove new Ford Powerstroke diesels from a quarry 16 miles off paved road to Phoenix. The whole trip was about 75 miles. Each truck had three or four people, plus 1000-pound loads in the bed. I rode in a truck that managed 24.5 mpg, with the driver staying locked on 55 mph except for the 16-mile dirt-road bit. But a team of three who was out to win, got more than 29 mpg. Ford says it's own testers scored between 23 mpg to 26 mpg. The fuel economy was tracked on the truck's electronic system.

"I am confident that we re going to win the fuel economy contest," Gryglak said. At the Chicago Auto Show, Chevrolet general manager Jim Campbell said he expected the new Silverado HD to be best in class. But was before Ford released its own ratings, or had journalists test the trucks.

The Federal government does not certify fuel economy for trucks above 8,500 pounds, making fuel economy a raucous discussion over drafts. Chevy says its trucks will have at least a 680-mile range on a 36-gallon tank, suggesting a 19 mpg highway rating.

"No one can say who is best in fuel economy until all three companies and media outlets have all three trucks to put through the same paces," Chevy spokesman Brian Goebel said.

The Silverado HD will be available in July, Goebel said. This week, GMC released information about its new Sierra Denali HD truck, but did not include fuel economy information.

Ram spokesman Dave Elshoff agreed with Goebel, and said, "Our Cummins diesel has a tried and proven track record for performance and reliability and that is going to count for a lot with customers when they are comparing us against the new and untried." Reviews of the new Ram HD's fuel economy by journalists places its fuel economy, thus far tested, around an unofficial 16 mpg to 18 mpg at best.

It will be interesting to test, and the war of words will continue well into the Fall. Consumer Reports tested a 2008 Super Duty, and got 10 mpg in combined use. Ford says the flex-fuel version of the SD improved by 15% over the old engine. That is a long way from the 24-29 mpg journalists got in Arizona this month testing the Ford. CR had also rated the current Chevy HD pickup at 12 mpg, and Goebel says the new Duramax bests that by 11%.

Both Ford and Chevy have had to design and manufacture new diesel engines to meet Federal emissions standards. Dodge had already been meeting them with its Cummins diesel before the new version of the truck hit showrooms the last few months. As of January,1, 2010, all new diesel-powered vehicles had to meet tougher federal diesel emission standards that reduce allowable nitrogen oxide levels by 90 percent from previous standards., and 96-percent from 1994 levels. NOx is a major air pollutant that contributes to smog, asthma, and respiratory diseases. It's a byproduct of diesel's high combustion temperatures.

Ford has long relied on Navistar to supply its engines but broke that relationship over issues of quality and differences of opinion about diesel technology. An internal "skunkworks" at Ford fast-tracked a new diesel engine in-house. GM's Duramax diesel is still made in partnership with Isuzu. And all three companies still also offer flex-fuel gasoline powered versions of their heavy duty trucks.

The rivalry between the Detroit Three isn't so big any more when you look at each product side-by-side. It used to be, for example, that Ford and Chevy would race to the finish line at the end of December, prodding dealers to buy more cars or trucks so they could call bragging rights at January's Detroit Auto Show about who outsold who. That's gone now as companies are focused more on profits than out-scoring one another on slivers of market share.

But in the heavy-duty truck category, it's old school time. To demonstrate how capable a Ford 550 Super-Duty with flat-bed can be, Ford had journalists pull a Ram HD flatbed, with a giant boulder chained to it, for a total load of 26,000 pounds. It was to prove that the Ford truck could pull the entire gross-vehicle-weight of the Ram. When demonstrating a tow-truck package for the Super Duty 550, Ford had drivers hook it up to a Chevy Silverado HD. And to demonstrate all of the Super Duty's towing, trailering, tractor-pulling and rock-crawling prowess, Ford held the event at an Arizona quarry. Anyone remember Chevy's famous "Like A Rock" campaign? "I hadn't really thought about that," said Ford Truck chief Doug Scott with a grin.

Ford Super Duty marketing manager Mike Murphy said that loyalty rate among Ford Super Duty owners is 45%, meaning 45% of owners who buy a new vehicle re-up with Ford Super Duty. A chunk of the 55% actually trade down to light-duty trucks and often stay with Ford. And there is some trading out of the brand to Chevy and Dodge.

For all the talk about how the American public is moving away from SUVs and pickups, the truck market is still vitally important to Detroit. Profits per truck easily exceed $10,000 per pickup. When buyers start adding feature on top of feature, pushing transaction prices up above $35,000, the cash register really rings because each option package and feature carries its own profit margin.

True, the weekend-warrior pickup market has severely dried up. In the mid to late 1990s and into the early part of the new century, Polo shirt-wearing suburbanites were buying pickups as second cars like they used to buy sports cars. Today, the pickup market is back to being more about "need rather than want," said Chevy's Jim Campbell. "Maintaining 'cred in the heavy duty market definitely spills over to the light-truck market."

While Ford has been the leading full-size truck brand for more than three decades, Campbell points out that Chevy and GMC pickups combined typically outsell Ford. It is a rivalrous bone of contention between Ford and GM every year.

Dodge is a bit of an outlier from Ford and Chevy. Horsepower, torque and tow rating, runs at a clear deficit to Ford and GM. But Ram has its followers. A sportier, more masculine exterior design, and a first-class interior has created a following for Ram especially among recreational towing enthusiasts -- including those who pull snowmobiles, WaveRunners, dirt-bikes and off-roaders.

"We get our share of the work truck, but we are especially popular with the sporting crowd," says Fred Diaz, head of Chrysler's Ram brand.

Indeed, when Chrysler was going through Chapter 11 Bankruptcy last year, financiers eyeballed the Ram truck business as the most desirable asset to possibly buy in a sale of Chrysler, together with the Jeep brand. And it was Ram that Nissan turned to supply its future pickup trucks to be sold under the Nissan badge after the company mothballs Titan, but that deal has come unglued since Italian automaker Fiat bought Chrysler.

The big rivalry among the Detroit Three throughout the 70s, 80s and early 90s was among one another, more than with the Asians such as Toyota and Honda. But after Toyota and Honda began beating Detroit in sales of mid-sized cars, with Toyota Camry and Honda Accord leading, the air seemed to go out of the old cross-town rivalries that used to pit Mustang against Camaro and the Ford brand against the Chevy brand. But with the Japanese badly stumbling in full-sized trucks, it's back to the future to see who will win the truck wars on a battlefield that has the generals fighting over fuel economy as much as how heavy a trailer each on can pull.

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