For Detroit, that’s no small question. In the roaring ’90s, cars have ceased to be the Motor City’s main business. Pickups, minivans and sport utility vehicles now make up almost half the automotive industry’s sales–and most of the Big Three’s profits. But after a decade of setting record after record, the truck boom may be running out of road. Minivan sales are flat, compact pickup sales are declining and though kid-carrying, grocery-hauling SUVs are still hot–some, like the Suburban, have waiting lists-they’re starting to carry rebates and incentives after years of commanding full sticker price. With factories tooling up to build 600,000 more sport “utes” a year by 1998, those discounts can only get bigger. researcher George Magliano of WE-FA Group: “A lot of that capacity is going to be tough to sell.”
No one contends that trucks are dinosaurs yet. Forecasters expect Americans to buy 6.5 million of them this year. As this fall’s vehicles head into showrooms, there’s still buzz over the new truck models: the Expedition, Chevrolet’s Venture minivan and Chrysler’s Dakota pickup. But the truck trade isn’t the profit machine it used to be. American manufacturers have flooded the market, turning car plants into truck plants to profit from the craze. Foreign carmakers are bulling into trucks, too. Honda’s soon-to-come CRV sport ute is ticketed to be a big seller, and Toyota’s RAV4 miniute has sold 30,000 units since its February launch–as many as the company had planned to sell all year. Sure, they’re not as roomy as Chevy Suburbans–but with prices starting at $16,000, they’re at least $9,000 cheaper.
Slimmer profit margins are only the first sign of trouble on the truck front. It was the baby boomers who made it fashionable to trek to the mall in a 4x4. But those boomers, to put it politely, aren’t quite as young as they used to be. With the kids off to college and the knees getting creaky, some market researchers predict, aging customers will rediscover the old-fashioned sedan. (Not everyone agrees. “You don’t turn 60 and some genetic bell goes off and says, ‘Buy a Cadillac’,” saysWall Street analyst Maryann Keller.)
Carmakers are taking no chances. The next battlefield is trucks that feel and drive like luxury cars. The RAV4 and CRV are built from car chassis, one reason they draw raves for agile handling. Ford and Chrysler are at work on their own car-based minutes, and Porsche and Mercedes have new SUVs on the way. If you want a heated leather seat to warm your backside while you’re roughing it in the Canadian Rockies, new sport utility vehicles from Infiniti, Lexus and Acura will suit your needs. When women drove an Expedition prototype, they hated the bouncy ride. So now, Ford’s biggest, toughest safari vehicle has a tight, carlike frame and an optional deflator that lowers the vehicle when you pull up to the curb. “That’s a gadget people will want,” says Ashley Knapp of AutoAdvisor, a car-buying service.
But it’s also a sign that tracks are no longer surefire crowd pleasers. The folks who peddle plain old cars sense opportunity. The commercials for Audi’s four-wheel-drive station wagon feature a high-heeled woman paralyzed with fear as she tries to exit an Everest-high SUV. Subaru touts its Outhack as a “sport utility wagon,” combining the ruggedness of a sport utility vehicle with the smooth ride and the better gas mileage of a car. Sales of both cars are strong, and both Subaru and Audi say they’re seeing lots of trade-ins from sport-ute owners. There’s a lesson there. As the truck market goes from red-hot to ho-hum, juicing profits will mean finding new niches to exploit. In the process, the dividing fine between ears and trucks will become harder and harder to discern.
