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Found 1 result

  1. Let's look back, and then at where this market is now. Last year the Tacoma and Nissan Frontier were the mid-size market. Honda had dropped out temporarily and put its Ridgeline on ice while it redesigned its car-like truck. Toyota was selling roughly 10,000 to 11,000 Tacomas per month and had been for a long time. Toyota Tacomas share their production with the Tundra, and Toyota was at two full shifts and happy as a clam. The Frontier's sales were more volatile. Monthly, the Frontier typically sold about 6,000 units if we had to pick one number. Thus, the size of the market was about 16,000 trucks every month. Then GM wisely saw an opening in the market to come back with a new, better, and slightly larger Chevy Colorado and GMC Canyon. That truck has now been in the market for over seven months and according to a recent press announcement, "Demand for the all-new Colorado midsize pickup is rising faster than GM’s ability to increase production, even with the addition of a third production shift in March." Since there is not much room for added capacity after a third and final shift, some plants now have workers skipping lunch to make a few trucks and earn some welcome overtime pay. After that, there is not much more room until and unless GM adds a production line, which will take time. Last October Toyota released a quiet note amid the fanfare surrounding the new Colorado saying it thought it could sell more Tacomas and would, therefore, ramp up its truck production lines to three shifts from two. It said that the capacity would be on-line in Q2 2015. This past month of May, that production came on line, and Toyota sold 17,520 Tacomas. That is a 60% increase in sales and truck production in a single month (since 6,500 is 60% of 11,000). The Frontier was down a bit, but in total the mid-size truck market is now running at a monthly rate of about 35,000 vehicles per month. GM's said yesterday about the Colorado, "With 8,881 sales in May, the Colorado controls about one-quarter of the retail market for midsize pickups..." So multiplying by four we see that our estimate of the market's size is about right. With both Toyota and GM now selling all the mid-size trucks they can in a market that increased in size more than 100% in just 7 months, the real question is how did Ford and Ram not see this coming?
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