Editorial: Someone Is Making Money In Mid-Size Trucks

Hats off to Toyota. With the release of the revised 2016 Tacoma, they sit ready to be both the reigning king of the mid-size truck market, and the auto maker that is best positioned to profit off this niche segment.

Serious observers of the industry agree that mid-size trucks don't matter. Once a popular segment, they have been on an inexorable decline in recent years.

Just over a decade ago, the Ford Ranger accounted for 226,000 units alone. Today, the entire mid-size truck market is worth roughly 225,000 units, in a truck market worth about 1.7 million units, and an overall market of over 17 million units. The Toyota Tacoma sold 155,000 units, making up 6 percent of the truck market, down 2.8 percent from 2013. The second place Nissan Frontier sold just 74,000 units.

A new look and some incremental improvements in fuel economy may be all that's needed – especially with gas at record lows. The GM mid-sizers might be better trucks in an objective sense, but much of the Taco's appeal in key markets like California likes in the fact that it's not a domestic truck. In the same way that California surf bros wouldn't be caught dead driving an American truck, the heartland truck consumer won't entertain the idea of a mid-size import truck – and in the most important pickup markets, that will forever doom them to irrelevancy, since a domestic full-size truck represents a better value and a better badge.

Reaction to the new Tacoma was muted on this site and elsewhere, with many wondering if it was just a refresh of the current model. But why would Toyota do anything else? The Taco has been the top dog in the mid-size truck market for over a decade. Toyota is even planning to up capacity at a second plant to build even more Tacomas (partially to help free up capacity for the Tundra at its Texas plant, partially to lower labor costs by building them in Mexico).

The end goal, of course, is profit. Mid-size trucks are a fairly tough segment to make it in. But Toyota already owns the niche, and the combination of already amortized development costs and a commanding sales lead only strengthens their position. GM may well offer the better truck – but they won't have the better balance sheet.

The post Editorial: Someone Is Making Money In Mid-Size Trucks appeared first on The Truth About Cars.

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