GMADA Supplement - S11

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"The range of numbers on this are gigantic," Weiss
told summit attendees.

COMPLEXITY NOT HURTING SALES

Driving this trend are consumers who clearly are
interested in customizing and individualizing their
trucks, he said.
While it may sound counterintuitive, all these
configurations-which make manufacturing more
complex and drive up vehicle costs-aren't hurting
sales in the segment. In fact, it almost appears to be a
positive, Weiss said.
"It is a bit surprising, especially since there's
generally been a push for reduction of complexity
during the last decade," he told Automotive News. "This
is where the truck segment really has acted more like
a luxury segment, ... allowing manufacturers to create
some very interesting interior spaces in the cabin with
leathers, woods and lighting.
"They also have great levels of customization
suspension systems, wheels and hydraulics. They're a
blank canvas, ranging from day-to-day utility with no
frills to luxurious drive settings, interior appointments
and all the newest technologies available.
"In summary," Weiss said, "trucks are extremely
agile as a product, fitting a range of customer needs
while still maintaining high margins for manufacturers
that build them."

AFFORDABILITY CONCERNS

But as the pace of technology quickens, it raises not
only the specter of manufacturing complexity but also
its nettlesome cousin, affordability. Automakers

increasingly find themselves pinched between
seemingly diametrically opposed goals: fulfilling
consumers' insatiable appetite for technology while at
the same time keeping vehicles affordable.
According to Kelly Blue Book, the average transaction
price of a light vehicle in December 2019 was $38,948
and the average price of a full-size pickup $50,471.
In short, auto executives agree that prices can't keep
rising forever. In fact, Jim Hackett, CEO of Ford Motor
Co., said one way to tamp down costs is through what
he calls "reductive design"-removing items such as CD
players and built-in garage door openers that studies
show most drivers don't use.
Tim Stoehr, Ford's North American truck regional
product line manager, told the truck summit audience
that affordability concerns spurred the revival of the
Ranger midsize pickup in 2019.
"Affordability is a challenge because the market
growth of the pickup market and the premium segment
has just gone like this (upward)," Stoehr said. "And with
the addition of all these semiautonomous technologies
that consumers want, it also drives the price up.
"It's difficult because an assembly plant would like
to minimize complexity. But in order to meet all the
needs of the marketplace and the price points that
people want, we're driving some of that [complexity]
in. So it's a balancing act, and we have to make really
hard decisions on what's standard and what's not."
Overall, Weiss remains optimistic about both the
mass-truck segment and luxury models.
"You will see more higher-end entrants into the
segment," he said. "The top end of this segment still
has some room to grow at lower volumes."
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