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Old 08-02-2003, 23:29   #1 (permalink)
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U.S.A.:U.S. truck war waged in Texas

Japanese automakers take fight for loyalty of big pickup buyers to heart of the market.

By Mark Truby / The Detroit News
J. Michael Short / Special to The Detroit News

SAN ANTONIO -- When Japan's Toyota Motor Corp. set about designing a new large pickup in the mid-1990s, engineers pored over market research and studied Ford and Chevy trucks from roof to tires.

But understanding America's love of trucks required something more visceral -- an immersion deep in the heart of truck country.

So a cadre of Japanese executives headed to Texas. Notebooks in hand, they gathered at a Dallas Cowboys football game and fanned out into the parking lot.

"Spread before them were thousands upon thousands of full-sized pickup trucks, row after shining row," Toyota President Fujio Cho said earlier this year.

The experience led to the creation of the Toyota Tundra, which went on sale in 1999, and planted the seeds for the automaker's decision to build a truck plant in San Antonio. It will open in 2006.

Toyota discovered what Ford, Chevrolet and Dodge have known for years: Selling trucks in the United States requires a keen understanding of the Texas market.

The battle for the hearts, minds and snakeskin wallets of the Lone Star truck buyer -- and by extension the American truck buyer -- has never been more pitched.

Ford Motor Co. spent $1.8 billion to produce an all-new version of its new F-150, which goes on sale this month. Ford's goal: 1 million full-size pickup sales a year.

General Motors Corp. is designing the next generation of its popular Chevrolet Silverado and GMC Sierra, of which they sell 800,000 per year combined.

And DaimlerChrysler AG's Dodge Ram is coming on strong. Ram sales are up 20 percent this year and should top out near 450,000 units.

The competition from Japan Inc. is only intensifying.

Nissan Motor Co. is the new kid in town, launching the aptly named Titan later this year. Japan's third-largest automaker aims to sell 100,000 Titans per year.

With plans drawn for the plant in San Antonio to build a larger version of the Tundra, Toyota aspires to sell 250,000 full-size pickups per year and capture 10 percent of the U.S. full-size truck market by 2007. The current Tundra is built at Toyota's plant in Princeton, Ind.

Detroit's automakers have a head start. They know the peccadilloes of Texas buyers and have large and successful dealer networks. But as Japanese companies have proven with the SUV market in recent years, they know how to crack Big Three strongholds.

"Somebody is going to lose," said Jim Sanfilippo, an automotive market researcher for AMCI Inc. in Detroit. "There just isn't enough buyers for everybody."

Last frontier

Full-size pickups represent one of the last remaining profitable growth segments in the U.S. market. Americans purchased 1.29 million pickups through July, up slightly from a year ago, even as overall car and truck demand slipped 2.2 percent.

Once utilitarian tools for the working man, pickup trucks today are just as often hip accessories for the urban cowboy. A four-door pickup with a leather-trimmed cabin and 19-inch tires can easily top $40,000.

The trend is in full bloom in Texas, where one of every seven full-size pickups is sold.

"Twenty years ago, 75 percent of trucks we sold you could open up and clean out with a hose," said Scott Wilson, a Ford dealer in San Antonio. "Today, probably 75 percent are just the opposite. You go through the school lines to pick up your kids, you'll see more (four-door pickups) than you will SUVs."

Texas is a state of ranchers, hunters and outdoorsmen of every kind. Pickups are often the most sensible choice. But Texans' love affair with trucks often has more to do with emotion and tradition than rational needs.

Take Robert Gholson, a U.S. Air Force instructor who lives near San Antonio. He and his daughter, Sianna, 4, have formed an attachment to their 2002 Ford F-150 that even Gholson struggles to put into words.

On warm summer evenings, father and daughter throw lawn chairs in the bed of the truck and read books or count stars.

"It's kind of weird, I admit, but it's become a tradition," Gholson said. "People stop and point sometimes. We don't have a real need for this truck, but there is just something about it."

Texans guard their traditions. They eschew designer jeans for Cowboy-Cut Wranglers. Dallas bond traders are known to show up at downtown skyscrapers with shiny belt buckles, bolo ties and tall, wide-brimmed hats. And they drive trucks.

"You can drive on any street, and you will see pickups everywhere -- it's just the Texas way," said Don Dunford, a Ford dealer in Devine, Texas, a small town south of San Antonio.

Winds of change

Dunford knows his audience. His Chaparral Ford is housed in a rustic limestone structure that wouldn't look out of place in a spaghetti western. Nearly every salesperson, manager and parts clerk wears cowboy boots, Stetson hats and blue jeans.

Still, Dunford is worried. He sees young buyers in Texas increasingly driving foreign brands -- Volkswagen Jettas and Honda Civics. He knows that Detroit's Big Three have lost nearly 20 points of market share in Texas since 1997, according to R.L. Polk and Co. And he certainly hasn't missed the implication of the sprawling truck factory Toyota plans to build just down the road.

"The new buyer isn't loyal to anyone anymore," Dunford said. "We are losing the car market. The young buyers don't even look at us anymore."

More than 60 percent of the passenger cars purchased in Texas are built by Asian and European automakers.

Light trucks -- pickups, SUVs and minivans -- remain the domain of the Big Three, with 80 percent of new trucks sold in the Lone Star state built by GM, Ford and Chrysler. But the harsh winds of competition have never blown so hard over the Texas truck market.

Texas trust

With Toyota mounting an offensive, Detroit's automakers are spending more time and money than ever trying to earn credibility in Texas.

Ford sells an F-150 King Ranch edition, named for the storied 825,000-acre expanse in south Texas. Dodge sells a Lone Star edition of the Ram.

The annual state fair in Dallas each summer is as much a celebration of trucks as it is showing off prize steers and eating cotton candy. Auto companies spend tens of thousands of dollars on elaborate displays, such as a Ford truck welded atop a 50-foot oil derrick. More than 2 million people wander through the fair's truck displays every year.

The massive media launch of the new F-150 has had a distinctly Texas flavor. Ford debuted the new truck simultaneously at the North American International Auto Show in Detroit in January and at a Dallas dealership.

In June, Ford invited hundreds of reporters to San Antonio to test drive the pickup for the first time. The "Built Ford Tough" slogan adorned seemingly every available billboard, water tower and barn roof within eye-shot of the convoy of journalists driving through the dusty hill country outside San Antonio.

The message was clear: Ford plans to protect its turf against Toyota and all other comers.

"Clearly, their decision to build a truck in Texas is a strong statement, but we have no intention of giving up our market share," said Bill Stang, Ford's regional marketing manager in the Southwest United States.

Competition entrenched

Toyota and Nissan realize it will take time and money to compete with the entrenched Detroit brands. GM, Ford and Chrysler have established dealers in every corner of Texas. More importantly, Texans have a long and happy attachment to F-150s, Silverados and Rams.

Toyota's U.S. marketing arm recently spent $100 million for the naming rights to the arena in Houston where the Rockets of the National Basketball Association play. The arena will not only sport the Toyota name and logo, but it will also become a giant showroom of sorts with gleaming trucks parked within view of the 18,000 fans watching the Rockets.

In addition, Toyota plans to open more dealerships in Texas to accommodate the expected jump in demand when the new factory opens.

The Japanese automaker is also quietly working on a larger version of the Tundra expected to be produced in the new plant. The current Tundra is a seven-eighths scale version of a full-size truck and underpowered by the standards of Big Three pickups, a deal breaker with many hard-core customers.

Perhaps Toyota's shrewdest move was hiring long-time GM executive Kurt Ritter to help map out its truck strategy. Ritter quit as head of Buick and Pontiac-GMC in May and launched a consulting agency with Toyota as his only client. Toyota plans to tap into Ritter's 32 years of experience in selling big pickups.

Nissan's new Titan will be built in Canton, Miss., and arrive in dealerships later this year. In preparation, Nissan is putting its dealer body through a crash course in truck-ology. By the end, salespeople will be able to talk towing and torque with the most die-hard truck buyer.

"We are in K-through-12 right now," said Fred Suckow, director of marketing for Nissan. "We need to graduate from truck college."

Suckow is concerned, however, that Toyota's smallish Tundra may have poisoned the well in Texas for Japanese trucks.

"Toyota took a shot and missed," he said. "People are very skeptical of Japanese trucks."

Nissan didn't take any chances with its Titan, a full-size and full-powered truck with a host of innovative features.

"It's kind of like high-stakes poker," Suckow said. "You need a big stack of chips to get a seat at the table."

Spoken like a true Texan.

(Left photo) Chaparral Ford owner Don Dunford says pickups make up 80 percent of the new car inventory at his Devine, Texas, dealership.
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