Q1 Statistical Analysis Of The Pickup Market: GM Vs. Ford Vs. Fiat Chrysler Vs. Toyota Vs...

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Includes: F, FCAU, GM, HMC, NSANY, TM, TSLA
by: Anton Wahlman

Summary

The U.S. pickup truck market grew 5% in 1Q 2017 on a unit basis. Fullsize grew 6% and midsize grew 3%.

Ford and Nissan gained share in the fullsize segment, while Honda gained share in the midsize segment.

The slowing of the midsize growth rate from the very high growth rate of 25% in 2016 as a whole, is pronounced.

Ford and Honda are the big winners overall, but Nissan is lurking in the shadows and gaining fullsize share from a very small base.

GM and FCA struggled in 1Q, but FCA has fundamentally a greater challenge for the rest of the year, given its lack of a midsize truck.

It's that time of the quarter again. It's time to analyze what happened to the U.S. pickup truck market in 1Q 2017 over 1Q 2016. Who won market share, and who lost?

First, let's realize the importance of the pickup truck market to the overall U.S. light vehicle market. Almost 2.7 million pickup trucks were sold in the U.S. in 2016, so approximately 15% of the overall U.S. light vehicle market. That makes pickup trucks one of the largest segments, and it's widely assumed also one of the most profitable.

Let's start by looking at the largest matrix of them all - the overall U.S. pickup truck market, which includes every single nameplate:

US pickup sales

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

Chevrolet Colorado

22358

-1%

22620

4%

4%

Chevrolet Silverado

128467

0%

128965

20%

21%

GMC Canyon

7527

-1%

7577

1%

1%

GMC Sierra

49810

-3%

51131

8%

8%

Ford F-Series

205281

10%

186121

32%

31%

RAM Pickup

119199

5%

113298

19%

19%

Toyota Tacoma

43493

-2%

44576

7%

7%

Toyota Tundra

23220

-9%

25535

4%

4%

Nissan Titan

11295

245%

3271

2%

1%

Nissan Frontier

15566

-27%

21395

2%

4%

Honda Ridgeline

9724

972300%

1

2%

0%

TOTAL

635940

5%

604490

100%

100%

As you can see in the table above, 1Q 2017 unit volume grew 5% over 1Q 2016. Considering that the overall U.S. light vehicle market was flat at best, that means pickup trucks overperformed the overall light vehicle market very materially.

But that's only where the fun begins. Looking at all nameplates in a table such as the one above, is difficult to digest. Several automakers have multiple models in the market, and there are multiple segments (fullsize and midsize). GM (NYSE:GM) has four nameplates, and Toyota (NYSE:TM) and Nissan (OTCPK:NSANY) each have two. Seeing as we are dealing with stocks and not just vehicles, we have to take the analysis down to the stock level:

US by parent co.

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

GM

208162

-1%

210293

33%

35%

Ford (NYSE:F)

205281

10%

186121

32%

31%

FCA (NYSE:FCAU)

119199

5%

113298

19%

19%

Toyota

66713

-5%

70111

10%

12%

Nissan

26861

9%

24666

4%

4%

Honda (NYSE:HMC)

9724

972300%

1

2%

0%

TOTAL

635940

5%

604490

100%

100%

As you can see in the table above, market shares moved a little bit during the March quarter. Toyota did the worst with negative 5% growth over 1Q 2016, but GM also saw its unit sales decline, if only by 1%. Ford grew the most at 10%, especially considering its large base. Still, it was Honda which put in the best performance overall by capturing 2% market share, up from zero a year prior.

On an overall basis, GM's lead over Ford shrank from 4% in 1Q 2016 to only 1% now. In addition, the market concentration is very high with GM at 33%, Ford at 32%, and FCA at 19%.

So that's the overall U.S. pickup truck market. However, just as with cars, pickup trucks aren't just "pickup trucks" - there are different segments inside the overall pickup truck envelope too. Surely we can refine the analysis to something a lot more interesting, can't we?

Look around you in traffic today, and you will see that the most common truck on U.S. roads is the fullsize kind. So what if we look at this fullsize segment exclusively?

Fullsize trucks

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

Chevrolet Silverado

128467

0%

128965

24%

25%

GMC Sierra

49810

-3%

51131

9%

10%

Ford F-Series

205281

10%

186121

38%

37%

RAM Pickup

119199

5%

113298

22%

22%

Toyota Tundra

23220

-9%

25535

4%

5%

Nissan Titan

11295

245%

3271

2%

1%

TOTAL

537272

6%

508321

100%

100%

As you can see in the table above, the fullsize pickup truck market grew 6% in 1Q 2017 - or slightly better than the overall pickup truck market's 5%. We'll find out in a minute which other category did worse than this 5% average.

Looking at the fullsize segment stock/manufacturer level, we find the trends easier to discern:

Fullsize by co

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

GM

178277

-1%

180096

33%

35%

Ford

205281

10%

186121

38%

37%

FCA

119199

5%

113298

22%

22%

Toyota

23220

-9%

25535

4%

5%

Nissan

11295

245%

3271

2%

1%

TOTAL

537272

6%

508321

100%

100%

As you can see in the table above, the fullsize truck segment saw Ford expand its market share lead in 1Q 2017. Ford was 2% ahead of GM in 1Q 2016, but is now 5% ahead of GM. That's what growing 10% vs. shrinking 1% will do to your market share.

Among the smaller players, Toyota's 9% reduction yielded a percentage loss in market share, whereas Nissan's whopping 245% growth from a tiny base, doubled its market share from 1% to 2%. This shows the market share concentration in the market by the top 3 pickup truck players.

Moving to the midsize truck market (there is no "small" pickup truck sold in the U.S., according to the prevailing industry language):

Midsize trucks

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

Chevrolet Colorado

22358

-1%

22620

23%

24%

GMC Canyon

7527

-1%

7577

8%

8%

Toyota Tacoma

43493

-2%

44576

44%

46%

Nissan Frontier

15566

-27%

21395

16%

22%

Honda Ridgeline

9724

972300%

1

10%

0%

TOTAL

98668

3%

96169

100%

100%

As you can see in the table above, the smaller pickups are no longer where the growth action is. After a 25% growth year in 2016, it is now down to 3%. The distribution of that 3% in 1Q 2017 was also completely uneven: Every model was down, except the Honda Ridgeline, which reached 10% market share from zero a year ago. And after a stellar 2016, the ageing Nissan Frontier lost a whopping 27%.

But what about on an overall company/stock basis? What was the midsize U.S. pickup truck action at that level?

Midsize by co

2017 1Q

change y/y

2016 1Q

2017 share

2016 share

GM

29885

-1%

30197

30%

31%

Toyota

43493

-2%

44576

44%

46%

Nissan

15566

-27%

21395

16%

22%

Honda

9724

972300%

1

10%

0%

TOTAL

98668

3%

96169

100%

100%

As you can see in the table above, the midsize pickup truck market saw more volatility also in terms of the market shares, than did the fullsize pickup truck market segment. GM and Toyota both lost a little ground, but the big winner is Honda.

Ford has announced that it intends to re-enter the midsize pickup truck segment in 2019 with the Ranger, and there is no shortage of rumors that RAM (FCA) intends to do the same around that time or shortly thereafter. The segment's 25% growth rate in 2016 was sure to attract new players, and it did. Hey, there's even talk that Tesla (NASDAQ:TSLA) intends to enter the pickup truck market a few short years from now.

So what about midsize trucks vs. fullsize trucks? What was the impact of a 3% midsize growth rate vs. a 6% fullsize growth rate?

Segment vs. Segment

2017 1Q

change y/y

2016 1Q

2017 1Q

2016 1Q

Fullsize

537272

6%

508321

84%

84%

Midsize

98668

3%

96169

16%

16%

TOTAL

635940

5%

604490

100%

100%

As you can see in the table above, the discrepancy in growth rate between the midsize segment and the fullsize one, did not move the overall segment split by even a full percentage point. Midsize pickups hold 16% of the unit market.

Conclusions: A healthy market, but...

In a market that grew 5%, there were still winners and losers. Toyota fell behind, as did Nissan's midsize truck. Ford did extremely well, as did Honda and Nissan's large pickup truck. RAM continues to do perform at least in line with the pickup truck market overall.

General Motors: Well, once the midsize truck growth stalled this quarter, GM is in retreat - but only barely.

Ford: The F-series continues to outperform admirably in the fullsize segment, but Ford could still benefit from entering the U.S. midsize market. Ford has put all of its pickup truck fortunes on one card, and it's working for now. It's a very different strategy than GM, which happened to bear fruit in the quarter that just ended.

FCA: Same as Ford, but less! FCA didn't do as well as Ford in the fullsize segment in 1Q 2017, and it suffers equally from not having a midsize pickup truck to offer in the U.S. market.

Toyota: After a huge growth spurt until the middle of 2016, Toyota's growth and market share situation have stalled and retreated. Part of this is as a result of the GM midsize trucks, and part is as a result of Honda's very successful entry.

Nissan: The midsize Frontier ran out of steam after the glorious 2016, while the fullsize Titan is picking up steam from a very small base. Nissan's Frontier is badly in need of an all-new replacement.

Honda: With an all-new Ridgeline, Honda had nowhere to go but up, but it sure is doing it! Everyone loves the new Ridgeline, and it's unlike anything else in the market. It gained 10% of the midsize market just by showing up, and that impact didn't even exist until mid-year 2016. One suspects that when adjusted for that timing, the Honda Ridgeline's current market share as we go through the second quarter of 2017 could exceed 10%.

Predictions for 2017:

  1. GM mix shift to continue, in favor of midsize trucks. GM has an exceptionally strong midsize truck with really no modern direct competition, including the segment's only (four cylinder) diesel capable of delivering 30 MPG highway. It's easy to envision another banner year for the Chevrolet Colorado and GMC Canyon.

  2. Ford introduces a refreshed F-150 in the Fall of 2017 with all sorts of segment feature-firsts, and a diesel arriving in 1Q 2018. This will only strengthen Ford's position over GM in the fullsize segment, and take share from FCA and others, probably Toyota, as well.

  3. FCA (RAM) may have a harder time gaining market share in 2017, than it did in 2016. From what I am aware, it has fewer new significant updates to the RAM compared to the Ford F-series in particular, and then there's the diesel issue currently in dispute, which could have a material negative impact. Aggressive discounting may be a key theme for FCA's 2017 RAM pickup truck business.

  4. Toyota's product portfolio will include a modestly refreshed fullsize Tundra in the Fall - mostly assisted driver safety features. However, no diesel, and no Android (NASDAQ:GOOGL) Auto or Apple (NASDAQ:AAPL) CarPlay for the infotainment, among other things. Add more/new competition for the midsize truck (Tacoma), and I don't see Toyota gaining share in 2017.

  5. Nissan is a mystery. Can the Frontier come even close to holding up until an all-new replacement arrives? Assuming no quality issues, the fullsize Titan should continue to gain market share, from its low base. It has the new five-year 100,000 mile warranty that took into effect in the second half of 2016, but how much will it manage to gain in 2017?

  6. It's almost a given that Honda will be able to claim at least in the neighborhood of 10% of the U.S. midsize pickup truck market, with upside potential.

Disclosure: I am/we are long F, GM, GOOGL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: At the time of submitting this article for publication, the author was long GOOGL, GM and F. However, positions can change at any time. The author regularly attends new vehicle launches, press conferences and equivalent, hosted by most major automakers.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.