IMPORTS EYE LAST U.S.-RULED AUTO NICHE: PICKUPS

Ford Relaunches F-150; Toyota, Nissan Quicken Own Efforts

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NEW YORK (AdAge.com) -- As Ford Motor Co. relaunches its vaunted F-150 pickup, it should check the rearview mirror: Import brands are on track to pick up share in the
Saatchi & Saatchi has created a new campaign for the Ford F-150's competitor, the Toyota Tundra.
The Tundra campaign evokes the spirit of daily workplace heroism and American grit.
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last category ruled by Detroit.

It appears to be a lopsided battle. Ford's F-Series is the top-selling vehicle in history and No. 1 seller for the past 21 years, and Ford is betting the farm on the flagship F-150. Owner brand loyalty for big pickups is the highest of any category. The Big 3 have 96% market share in large pickups; Toyota, the only import brand available, has just 4%.

In the near future
But five to 10 years out, import brands' big-pickup share could be "somewhere between 20% and 25% -- and that's probably being fairly conservative," said Fred Suckow, director of Nissan marketing at Nissan North America, which in December releases its own brawny entry, the Titan.

Toyota also has clear ambition to expand in the sector, albeit that the manufacturer does not want to overplay its hand. Ernest Bastien, Toyota corporate manager for vehicle marketing, said domestics are "clearly in command" of the big-pickup segment. Mr. Bastien added, "Our aspirations are really somewhat modest by comparison." But not subtle: Toyota in 2006 opens a Tundra factory in San Antonio, the heart of truck country.

"San Antonio economically probably did not make the most sense for Toyota, but from a marketing standpoint it made perfect sense," said Stephen Cavender, who runs a Toyota dealership in the city. "The plant is easily expandable."

Bigger, fancier, more expensive
It's no surprise more players want to join the ultimate pickup game. Sales doubled over the past decade to 2.2 million pickups, and models got bigger, fancier and more expensive as the market shifted from work trucks to personal use. While new entries are appearing, category growth has stalled. Analysts don't expect much growth going forward; the use of rebates and other incentives is increasing, and it will be a market share game.

Toyota and Nissan together should command 8% to 10% of the big-pickup category within two to five years, said Jeff Brodoski, an analyst with consultancy J.D. Power & Associates.

Yet Mr. Suckow's longer-term view is plausible. Nissan's first-year sales target is 100,000 Titans. By 2007, Toyota will have capacity to build 250,000 Tundras. Meanwhile, Hyundai Motor America and American Honda Motor Co. are rumored to be preparing pickups; neither would comment for this story. In five to 10 years, Mr. Suckow said, Toyota could get 10% share, Nissan may snare 7% to 8% and Honda and Hyundai might split 3% or 4%, giving import brands a big-pickup share roughly even with Japan's 22% share of the overall U.S. light-truck market.

Marketing advantage
Big pickups have been an anomaly, a segment where Detroit faced almost no competition. The big pickup is a uniquely American product; customers, especially in the core work market, have tended to be loyal to Ford, Chevy or Dodge in particular and domestic products in general. Barriers to entry are high: Customers expect numerous varieties of engines, cabs and beds; a 25% tariff on truck imports means a foreign company needs to assemble in the U.S. to be competitive. Domestic brands have a marketing advantage: a long reputation for selling tough trucks communicated with hard-hitting truck campaigns.

But Mr. Bastien noted one-fifth of domestic big-pickup owners already have an import vehicle in their garage. Nissan's Mr. Suckow said "the modern truck guy," who uses the pickup for personal use, is more likely to consider an import truck. Japanese companies aren't new to the overall pickup market, having sold small pickups for decades.

Still, to compete import brands need strong products -- and advertising. Rosario Criscuolo, chairman of the Toyota Dealer Council, expects Toyota to do a separate truck campaign. Said Toyota's Mr. Bastien: "We are looking very carefully at what type of communications we should have to support our trucks," though "we don't want to be in the position where we subrogate our car brands to a truck brand."

No one suggests the Japanese will take over the big-pickup category. "It will take 25 or 30 years before there is parity," said Mr. Criscuolo, a Lansing, Mich., Toyota dealer.

27 million sold since 1948
General Motors Corp. is the biggest seller of large pickups if its Chevrolet and GMC sales are combined, but Ford's F-Series is the top-selling vehicle brand. Ford has sold 27 million F-Series since the line began in 1948. F-Series sales last year (813,701) were nearly double those of the top car, Toyota Camry (434,145). Merrill Lynch auto analyst John Casesa said F-150 is Ford's largest single profit contributor with an estimated margin of at least $6,000 a truck.

Ford, recovering from financial losses and other setbacks, is laboring to avoid quality glitches that beset its recent product launches. The new truck is getting good reviews -- and the old F-150 led its segment in J.D. Power's initial-quality and vehicle dependability studies. Said Todd Eckert, F-150 marketing manager: "There are going to be viable competitors in the market, but we believe we have the product ... to meet them head on."

Follow the leader
Japan is following the leader. Toyota's first big pickup, the 1993 T-100, was underpowered. Its replacement, the slightly undersized Tundra, is solid but not fully competitive with Detroit's best, said Jim Hossack, a consultant with researcher AutoPacific Group. Mr. Hossack said the brawny Nissan Titan is a strong contender, and he said Tundra will get more competitive with a redesign down the road.

All of this is reminiscent of minivans: After their early models fizzled, Japan redesigned the vans to meet needs of American buyer -- and took Japan's U.S. minivan share from 9% in 1995 to 30% today. Likewise, Japan was late to embrace sport utilities, but it's since taken about 30% -- and is looking to take more.

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Jean Halliday contributed to this report.

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