LOS ANGELES General Motors Co (GM.N) is banking on American consumers' desire for something different from cars and crossover utility vehicles to drive demand for its Chevrolet Colorado when the mid-sized pickup trucks re-enter the U.S. market next autumn.
As part of the No. 1 U.S. automaker's so-called "three-truck strategy" that includes the full-size and heavy-duty Chevy Silverado pickups, the 2015 Colorado and its GMC sibling Canyon are meant to appeal to lifestyle buyers much like Subaru has done with its vehicles, offering space, utility and a refined interior.
GM believes the Colorado redux, which will debut at the Los Angeles Auto Show on Wednesday, will be far more successful than its last appearance when U.S. sales peaked in 2005 above 128,000. However, declining popularity and the company's need to save money during its 2009 bankruptcy reorganization forced it to exit the U.S. market last year.
GM, which never stopped selling the Colorado overseas, envisions a profitable return in a segment that was abandoned by its U.S. rivals, Ford Motor Co (F.N) and Chrysler Group FIA.MI.
"We honestly believe from all the research that we've done that there's a lot of people looking for mid-size" trucks, Alan Batey, GM's global Chevy chief told reporters ahead of the relaunch. "What happened in the segment was there wasn't a lot of choice."
Research firm IHS Automotive, however, does not see sales as strong as GM does, predicting 100,000 annually in the U.S. market from the Colorado and Canyon combined.
"The gap in pricing between Silverado and Colorado will be key," IHS senior analyst Stephanie Brinley said. "If price gets too close or fuel economy is not better by at least five to six miles per gallon on the highway, that will hurt the Colorado.
"The real question is how many people are really sitting in small crossovers wishing they had trucks," she added. "We don't know the answer, but GM is betting on that."
It may be difficult to imagine in a market where full-sized trucks like Silverado, Ford's F-150 and Chrysler's Ram dominate television ads with images of brawny, haul-anything usefulness, but the mid-sized trucks once rivaled their larger siblings.
In 1994, U.S. sales of the smaller pickups topped out at almost 1.2 million vehicles, or 8 percent of the market, compared with more than 1.6 million, or 10.7 percent of the market, for the full-size trucks. Last year, however, small pickups, mostly the Toyota Tacoma and Nissan Frontier, accounted for fewer than 280,000 sales, or 1.9 percent of the market, while the bigger trucks made up more than 11 percent.
Industry sales in the U.S. mid-sized truck market fell 7.5 percent last year and are expected to slide another 12.7 percent this year, but rebound to almost 395,000 vehicles in 2020, according to research firm LMC Automotive.
GM is betting the Colorado can top its peak U.S. sales year with demand coming not only from existing players in the mid-sized truck segment, but from the larger trucks of its rivals as well as crossover buyers looking for something different.
Competitors are watching. Toyota Motor Corp (7203.T) claims GM's re-entry will only boost the segment and sales of its market-leading Tacoma.
Bill Fay, group vice president for Toyota's U.S. sales, said they have been anticipating the Colorado's return. "More entries create more shoppers. A lot of that will make some people come take a look at Tacoma," he added.
Fay said Toyota remains committed to the segment and he sees sales of Tacoma, last redesigned in 2004, rising over the next several years from the 141,000-plus sold last year. He agreed, however, that Toyota will likely need to increase advertising for its truck ahead of Colorado's debut.
Meanwhile, Ford shows no signs of swerving from its strategy of maximizing sales of the F-150, the top-selling vehicle in the U.S. market for more than three decades. Ford and Chrysler stopped making their mid-sized trucks, the Ranger and Dakota respectively, in 2011.
"I'm not exactly sure what they see that we're not seeing." Doug Scott, Ford's truck group marketing manager, said of GM. "We'll just have to see how things play out."
Ford officials added they have no plans to bring the Ranger, still sold overseas, back to the U.S. market as the proximity of that vehicle's size to the full-size F-150 makes it unnecessary. They also said the smaller pickups appealed in the early 1990s partly as an option to entry-level cars because the trucks could be purchased with sub-$100 monthly leases. That is no longer true.
Instead, Ford is boosting efforts to broaden its F-150 lineup. For instance, the sportier STX version, meant to appeal to younger buyers - launched as a distinct model in 2009 - is expected to make up 17 percent of the truck's sales mix over the next year, up from 3 percent in the 2012 model year, Scott said.
Colorado's starting price the last time around was $18,285, and while it has not revealed what it will now be, the lack of a regular cab model suggests it could be higher. However, the Detroit automaker has to be careful to keep it separate from the larger Silverado, which starts at $26,670. Ford's F-150 starts at $25,640.
GM executives feel they made the new Colorado different enough from Silverado. A comparable crew cab version of Colorado is 900 pounds lighter, 16 inches shorter, 5 inches narrower and 3 inches lower. It will be offered with 2.5-liter 4-cylinder, and V6 engines in the first year, with a diesel engine added in the second year.
(Reporting by Ben Klayman in Los Angeles; Editing by Maureen Bavdek)