Compact Truck Market Reboot – Small Trucks Making a Comeback?
A story has come out that Chevy is considering bring back the LUV to the U.S. market. For the first time in years, we could have a truly compact truck for sale. Good or bad idea?
According to a Jalopnik journalist, several GM engineers told him that GM is working on a “new LUV project.” This was after he peppered them for a while at a press event. The off-the-record conversation has stirred up a larger conversation on the possible return of compact trucks.
Many journalists have linked the news to an idea that GM could bring over the Brazilian-built Chevy Montana. This is a compact truck is sold in Latin America and really is just an updated version of the LUV (sold from 1972-1981 when it was replaced by the S-10). It is powered by a 4-cylinder engine with a 5-speed manual. It would likely be updated with a 6-speed automatic that will be used in the new Chevy Colorado (sorry, manual fans).
Why do we say the return of comeback compact trucks? The reality with compact trucks is that they have slowly grown into a “mid-size” model. For example, a 2014 Toyota Tacoma isn’t anything like the truly compact models of the 1980s.
Pros For A New Compact Truck
Over the past decade, there has been a growing demand for a return to the smaller size. Certain customers need a truck, but don’t want the larger size that is harder to drive and is more difficult to access the bed. A great example of this customer is Orkin. They had been a large purchaser of the Ford Ranger. Ford thought they would simply move up to the F150, yet they bought Toyota Tacoma’s instead. Why? The smaller size of the Tacoma means their employees can more easily access the bed and it was easier for all their employees to drive. There are plenty of companies out there like Orkin and many consumers who have similar needs.
GM has been talking a lot as of late of offering a product for every customer. This PR talk surrounds their multi-pronged truck strategy: mid-size, full-size and HD models. Introducing a compact truck to the mix would allow them to expand their offerings in every segment as well as give them a leg up on the competition by having the first model.
Another pro for a compact truck is all the talk about the pending 2016 CAFE regulations. A compact truck with a presumed small footprint and great fuel economy is a CAFE slam dunk. Having this type of vehicle in their lineup would further help GM meet those requirements.
Cons to a Compact Truck
The reality is that you can go to just about any truck forum and find a conversation on truck size. While there are undoubtedly people who would like a small truck, it is really hard to gauge how much interest there really is for one. RAM, Ford and Toyota are on record as saying they don’t see the business case for building such a truck. Yet, that is just speculation based on “market analysis.” That same analysis said for years that a half-ton diesel didn’t make any sense either. And yet, the variety of diesel half-tons coming to market in the next few years is simply stunning.
One big con to a compact truck is price and product differentiation. Ford recently had this problem and it lead to the Ranger being killed off. They just simply couldn’t price nor build the Ranger to be that much different from the F150. How different would a compact truck have to be for it to succeed? Quite likely, a lot. If you use the same engine, transmission and the price point isn’t that much different, why even offer one?
Overall, while it seems like this idea doesn’t make much sense, GM has been cashing in on some of their risk taking lately. Mark Reuss, GM Executive Vice President, Global Product Development, Purchasing and Supply Chain, recently said as much in an Automobile Magazine. He points out that critics said GM couldn’t sell the Chevy Spark and the Buick Encore in the U.S. Yet, both products are selling really well and Chevy is having some difficulty keeping up with the demand for the Spark, according to Reuss.
“I love doing things that make sense, that no one else is doing,” said Reuss.
Does a compact truck make sense? Depends. However, Reuss is part of GM’s executive team and he could be a big reason why the LUV may make a reappearance.
What do you think? Is it time for a truly compact truck to re-emerge? Will people move down from the mid-size and full-size trucks?
Filed Under: Auto News