2024 Toyota Tacoma Trailhunter
DETROIT – Size matters. Just ask America’s largest automakers.
ford, General engines and Toyota are increasingly among those looking to capitalize on the growing mid-size pickup segment: vehicles big enough to command hefty price tags but small enough to protect profit margins.
The small pickups have evolved from entry-level work trucks to pricey, capable, and highly profitable models that can cost upwards of $60,000 — in line with luxury vehicles from BMW, Cadillac, and others.
“It’s just not aimed at people on a budget, because I think that was the segment for a long time,” said Jessica Caldwell, executive director of insights at automotive research firm Edmunds. “The trucks are getting better and better with more features, more features and more emphasis on design.”
Midsize pickups follow the lead of their larger full-size counterparts such as the Ford F-150, Chevrolet Silverado and Toyota Tundra. They have become more capable, bigger and more expensive, with an influx of new luxury and off-road variants and special features.
Mid-size vehicle sales have surpassed 600,000 since 2019 as consumer interest has shifted from traditional sedans to commercial vehicles such as crossovers, SUVs and, of course, pickups.
Over the past decade, sales of traditional midsize pickups have more than doubled to 4.4% of U.S. car sales last year – up from a minuscule 1.6% in 2013 and the highest level since 2005, according to Edmunds.
S&P Global Mobility expects mid-size pickup sales to continue to grow in the coming years, but to reach 4.6% as a percentage of U.S. market share by 2026.
The average price paid for one of the vehicles is also rising: Over the past decade, the average price has increased 53% from about $28,100 to more than $42,000, Edmunds reports. That price growth is 3 percentage points stronger than the industry as a whole.
Competition is increasing
The midsize pickup segment has grown from three vehicles in production a decade ago to seven gas-powered pickups from the likes of Chevrolet, Ford, GMC, Honda, Jeep, Nissan and Toyota. Half of the brands have announced redesigned vehicles this year, which is expected to boost interest and competition in the segment.
Toyota unveiled its fourth-generation Tacoma pickup this week, a week later Ford engine unveiled its redesigned Ranger for the US General engines also has redesigned versions of its Chevrolet Colorado and GMC Canyon pickups arriving at dealers.
2023 GMC Canyon AT4X Edition 1
“It’s really hotter than ever in terms of midsize trucks,” Patrick Finnegan, senior manager of GMC trucks and large SUVs, told CNBC. “There is a lot more commitment, energy and enthusiasm [and] building momentum in this segment than we’ve ever seen.”
While Detroit automakers dominate large pickup sales, Toyota Motor is the clear leader in midsize pickup sales with its Tacoma.
Toyota has held about a 40% share of the U.S. midsize pickup segment since 2019, when Ford and Jeep re-entered the market, Edmunds reports. That’s down from a market share of more than 60% a decade ago—despite Tacoma’s sales rising about 150% since then—as rival automakers have released new trucks.
It’s a position Toyota has no intention of relinquishing: “[Tacoma] is the best-selling vehicle in the segment… we intend to keep it that way,” said Joseph Moses, general manager, truck and SUV, Toyota North America.
Behind Toyota is GM. Edmunds reports that the Detroit automaker’s share of the midsize pickup segment in the U.S. was about 19% last year, followed by StellantisJeep Gladiator at 12.8% and the Nissan Frontier at 12.5%. Ford’s Ranger was at 9.4%, down from market share of about 15% last year.
“I don’t see any reason or reason why Toyota’s dominance in this segment doesn’t continue,” said Stephanie Brinley, chief automotive analyst at S&P Global. “It’s been down since 2017… but it’s still well over 200,000 units [annually]. No one else even comes close.”
Vehicle manufacturers’ sales volumes reflect their divergent strategies in the mid-size pickup segment.
Toyota promotes what it calls “a Tacoma for everyone” and offers several variants of its standard model, including a two-door version of the Tacoma, two different bed lengths, and a new high-end, off-road “Trailhunter” model. It also offers the Tacoma with a manual transmission – a rarity in today’s automotive industry.
Meanwhile, its competitors have reduced the number of cab and pickup configurations they offer, moving to exclusively four-door midsize pickups with one bed option to reduce complexity.
Much of the medium optionality is usually a win game. Ford CEO Jim Farley told investors last month that special variants — such as a new Raptor model in Ford’s Ranger lineup — share about 80% of their parts with mainstream models, but have 30% higher contribution margins.
The Raptor starts at $56,960. That’s almost $23,000 more than the entry-level Ranger.
2024 Ford Ranger Raptor
“The Raptor will be the pinnacle of our Ranger lineup,” said Gretchen Sauer, Ford’s pickup marketing manager. “It will increase our overall transaction price for Ranger.”
GM considers Chevrolet to be the most important brand for the midsize pickup segment, while GMC specializes in higher-end models.
GMC’s Finnegan said the brand expects new customers with its redesigned Canyon. Much of that draw is expected at the high end of the market with GMC’s off-road AT4 and AT4X models, both of which can top $60,000.
“It’s a priority for us to get into that segment and increase our share,” said Finnegan. “I think it’s probably safe to say that with all the new entries in the segment, we think the segment will grow.”