Tundra Could Overtake Ram Sales in 2010
Last week PickupTrucks.com published an excellent break-down of 2010 pickup truck sales through the first four months of 2010. While there are a lot of interesting takeaways, the one that jumps out at us is the fact that the Tundra could outsell the Ram in 2010. To be clear, knocking off the Ram is still only good enough for 3rd place…and close is a relative term (Toyota is still about 3,000 units short). Here are the numbers:
|2010 Sales Through April|
Does this mean anything? Not really. Depending on how you look at it, it can be a positive:
- The Tundra is gaining ground on the Ram 1500.
or a negative:
- Toyota has been aggressively incentivizing Tundra sales (along with everything else), and despite that fact they still can’t surpass the sales of the the Ram 1500.
Either way, sales figures really don’t mean anything.
Sales Figures Are Fools Gold
Ford and GM sell nearly 3 times as many half-tons as Toyota and Chrysler-Fiat…does that mean they’re 3 times better? Not a chance. Here’s what drives sales:
1. Brand loyalty. Toyota has found out the hard way that no matter how good your truck may be, some people refuse to switch brands. Ditto for Chrysler-Fiat and Nissan. How many times do we read a comment here on TundraHeadquarters.com from a Ford or GM loyalist who brags about how many generations in their family have owned Ford or GM trucks. Is that a rationale basis for buying anything? Not really…but I can certainly appreciate it.
2. A large number of dealerships, including rural locations. Dealers sell vehicles – the more dealers you have, the more vehicles you sell. Toyota has 1,200 dealers, Ford and GM have about 5000…each. All of these dealers are busy running TV and radio ads and doing anything and everything to move some iron…and that’s a sales advantage.
You also have to consider rural locations when you look at pickup truck sales. There’s no getting around the fact that Nissan, Toyota, and to a lesser degree Chrysler-Fiat don’t have a lot of dealers in small towns that are dominated by truck buyers. Ford and GM, on the other hand, have thousands of rural dealerships between them. While it’s true that rural dealership sales account for a small percentage of the total, I think they’re under-reported because rural buyers tend to “go to town” to buy their pickups, but they only buy brands they can have serviced locally.
Large numbers of dealerships (including rural dealers) drive pickup sales in a big way.
3. Fleet business. Ford and GM sell the most trucks in North America year after year, and arguably their products aren’t much better than any other product. However, both companies have a strong fleet business…and fleet business drives sales because:
- When Company X starts a truck fleet, they try and stick with the same brand to reduce complexity. Big fleets can get away with owning different makes, but small and medium sized fleets tend to stick to one brand because it makes maintenance and repairs easier.
- The employees at Company X tend to fall in love with whatever brand the fleet is composed of. When these employees go to buy a personal vehicle, they often buy the same brand they drive at work.
- Fleet sales allow for incredible economies of scale. In the world of manufacturing, the cost-per-part is lower when you buy higher volumes. Buy 10,000 steering wheels and your price might be $14 each. Buy, 500,000, and the price might be $7. Obviously, lower costs per part mean lower prices and/or bigger sales incentives.
Ford and GM fans will tell you that their trucks sell better than Chrysler, Toyota, Nissan, etc., because they’re better quality…but that’s simply not true. If quality were the only consideration people made before buying a pickup, they would buy whatever model got the best rating from Edmunds, JD Power, Consumer Reports, etc. For most of the last decade, that brand hasn’t been GM or Ford.
Instead, the factors that drive high sales volumes are complicated. Brand loyalty, geography, cost, and familiarity are all in the mix.
Filed Under: Auto News