Detroit’s Big Three know they have targets on their backs in the U.S. truck market, because of its high margins and because they practically control all of it. After the recession, it seems Detroit is more determined and confident than ever. “There are some things that are endemic to the American carmakers; this is one of them,” said Chrysler CEO Sergio Marchionne. “All three of us will defend the area tooth-and-nail. It’s our business, period.”
As I said, Toyota isn’t giving up just yet. However, due to its late entry into the U.S. truck market, it’s way behind in producing a vehicle that matches consumers’ needs. With that late entry comes much less, if any, consumer loyalty.
Loyalty trumps all
When I met my girlfriend’s father for the first time, the first question out of his mouth was “Ford or Chevy?” He didn’t care about religion or sports teams. It was all about the truck brand. That isn’t an unusual event. There’s a solid line in the sand, and you’re either a Ford or a Chevy guy — and that’s that. With loyalty that intense, it’s going to take a long time for Toyota to break into that circle.
Consider this: Of all Silverado buyers in 2012, 39% were repeat customers. Ford F-150 buyers came in at a close second at 36%, followed by Ram at 27%. There isn’t a lot of switching going on among truck owners. According to Edmunds, Chevy and Ford pickups top even the most loyal sedan buyers on the market. That high percentage of repeat customers exemplifies the knowledge Detroit has in producing the vehicle consumers want and need.
Bottom line
Sales of U.S. trucks are expected to top 1.7 million units in 2013, a favorable sight after the low numbers that followed the recession. Detroit is hopeful that sales could again reach highs of 2.5 million seen in 2005. For the Big Three, it’s a virtuous cycle of consumer knowledge and loyalty, an advantage that began as far back as 1930. For Toyota to make some noise and gain market share, it’s going to take a drastic change in knowledge, strategy, and a lot of time. Toyota will unveil the 2014 model Tundra tomorrow, and we’ll have a better idea of the impact it could have on its Detroit competitors. With the new Silverado, Sierra on the way this year, and F-150 following a year later, don’t expect the Tundra to take any market share. Not yet, and not for a while. The U.S. truck market is Detroit’s, and that’s a fact.
The article 2 Reasons the 2014 Tundra Doesn’t Stand a Chance originally appeared on Fool.com and is written by Daniel Miller.
Fool contributor Daniel Miller owns shares of Ford. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.
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