2018 PICKUP TRUCK STUDY J U L Y 2 0 1 8 Truck Survey Background
Goals and Objectives: • Assess economic factors affecting truck market share • Determine shopper consideration and opinions of mid-size and full-size trucks • Identify shopper preferences and the most important consideration features when purchasing
Methodology and Sample: • Online quantitative survey fielded to U.S. consumers visiting KBB.com • Respondents answered on either a desktop or mobile device • In order to be eligible for this survey, respondents had to be: • Purchasing/leasing a mid-size/full-size truck in the next 12 months • Considering one or more mid-size trucks (Tacoma, Colorado, Ranger, Canyon, Ridgeline, Gladiator, Frontier) • Considering one or more full-size trucks (Chevrolet Silverado 1500, Chevrolet Silverado 2500/3500 HD, Ford F-150, Ford F-250/F-350/F-450 Super Duty, GMC Sierra 1500, GMC Sierra 2500/3500 HD, Nissan Titan, Nissan Titan XD, Ram 1500, Ram 2500/3500/4450, Toyota Tundra) • Mid-Size Truck N=764; Full-Size Truck N=1369
Field Dates: January 2018 to April 2018 ECONOMIC FACTORS DRIVING TRUCK SALES Economic Outlook Remains Optimistic
REAL GDP GROWTH RATE
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Federal Reserve, Moody’s Analytics Headwinds Lead to Only Modest Decline in 2018
LIGHT VEHICLE SALES OUTLOOK (MILLIONS) 16.8 18
17
16
15
14
13
12
11
10
9
8
1974 2006 2020 1968 1970 1972 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2008 2010 2012 2014 2016 2018
2018 2019 2020 Cox Automotive Full-Year Forecasts 16.8 16.4 16.5 (Up 100K from earlier forecast)
Source: Cox Automotive, June 2018 Pickup Sales Are Strong Across Brands
PICKUP TRUCKS VOLUME (IN THOUSANDS) 3500
3000
2500 Honda Nissan 2000 GMC Toyota
in in thousands 1500 Ram Chevrolet
1000 Ford
500
0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Statista, February 2018 Trucks Significant Driver of Revenues Across All Brands
120000 PICKUP TRUCKS REVENUE (IN MILLION USD)
100000
80000 Honda Nissan Toyota 60000 GMC
in million USD million in Ram Ford 40000 Chevrolet
20000
0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Statista, February 2018 Pickup Truck Share Expands While Cars Decline
FULL-SIZE MID-SIZE COMPACT MID-SIZE COMPACT MID-SIZE TRUCK TRUCK CAR CAR SUV SUV
between between between between between between 12-14% 3-4% 16-13% 20-13% 20-29% 16-18%
from 2015-2025
Source: HIS/Markit, U.S. Automotive Sales Forecast April 2018 Truck Consideration Steady; Expected to Climb as New Models Arrive (Ford Ranger, GMC Sierra 1500, Ram 1500, Chevrolet Silverado)
SEGMENT CONSIDERATION
Non-luxury Utility Vehicle 59%
Non-luxury Sedan 39% TRENDED PICKUP CONSIDERATION Luxury Utility Vehicle 20% 25%
20% Luxury Sedan 18%
15% Pickup 17%
10% Non-luxury Coupe 8% 5% Minivan 7% 0% 2015 2016 2017 2018 Luxury Coupe 4%
Source: KBB.com Brand Watch Q1 2018 Please select at most 5 vehicles that you are currently shopping. Economic Expansion Drives Construction and Truck Sales
TOTAL CONSTRUCTION INVESTMENT (IN MILLIONS OF DOLLARS)
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Jul-2009 Jul-2007 Jul-2008 Jul-2010 Jul-2011 Jul-2012 Jul-2013 Jul-2014 Jul-2015 Jul-2016 Jul-2017
Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2018
Mar-2009 Mar-2010 Mar-2007 Mar-2008 Mar-2011 Mar-2012 Mar-2013 Mar-2014 Mar-2015 Mar-2016 Mar-2017
Nov-2008 Nov-2009 Sep-2007 Nov-2007 Sep-2008 Sep-2009 Sep-2010 Nov-2010 Sep-2011 Nov-2011 Sep-2012 Nov-2012 Sep-2013 Nov-2013 Sep-2014 Nov-2014 Sep-2015 Nov-2015 Sep-2016 Nov-2016 Sep-2017 Nov-2017
May-2007 May-2008 May-2009 May-2010 May-2011 May-2012 May-2013 May-2014 May-2015 May-2016 May-2017
Source: U.S. Census Bureau, 2007-2018 Construction Spending – Total Construction including both Public and Private Sectors New Construction, Builder Confidence Bode Well for Truck Sales
HOME SALES BUILDER CONFIDENCE
800 76 662,000 700 593,000 74 600 72 70 70 69 500 68 400 66 300 +12% Y/Y 64 +1% Y/Y 200 -1% M/M 62 +1% M/M 100 60
- 58 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18
Source: U.S. Census Bureau: New Residential Sales, April 2018 Source: NAHB/Wells Fargo National and Regional Housing Market Index (HMI), May 2018 WHO ARE TRUCK BUYERS? Respondent Demographics
Median Gender Median Ethnicity MID-SIZE FULL-SIZE Income (Male) Age 75% 72% MID-SIZE 60K 84% 53
FULL-SIZE 6% 8% 70K 89% 46 4% 3% 1% 2% Caucasian Hispanic African-American Asian
Source: KBB.com Mid-Size Truck Survey, 2018, N=764, Full-Size Truck Survey, 2018, N=1369 Truck Intenders are Mainly Purchasers vs. Lessees
PURCHASE/LEASE INTENTIONS Purchase Lease Mid-Size Truck Full-Size Truck Compared to Non-Lux SUVs
5% 5% 10%
95% 95% 90%
Average # of Years Shoppers Plan to Hold on to Their Trucks
Mid-Size Truck Full-Size Truck 9 8 YEARS YEARS
Source: KBB.com Mid-Size and Full-Size Truck Surveys, 2018 Q7: Do you plan to purchase or lease your new truck? (N=764) Full-Size Truck Shoppers are More Committed to Domestic Brands; Mid-Size Considerers are More Likely Neutral to Country of Origin
PREFERENCE ON WHERE A TRUCK’S BRAND IS HEADQUARTERED
Full-Size Mid-Size
I have no preference 28% 58%
1%
Japan 11%
Domestic 71% 31%
Source: KBB.com Mid-Size Truck Survey and Full-Size Truck Survey, 2018 Q25: When buying a mid-size truck, do you have a preference for where the brand is headquartered? (N=764) Q25: When buying a full-size truck, do you have a preference for where the brand is headquartered? (N=1369) Full-Size Truck Shoppers Most Loyal Owners. Mid-Size Truck Shoppers Least Loyal, Creating Conquest Opportunities.
TRENDED SHOPPER LOYALTY
Compact Car Mid-size Car Compact SUV Mid-size SUV Mid-size Truck Full-size Truck Average Loyalty 50%
40%
30%
20%
10%
0% 2015 2016 2017 2018 -10%
-20%
-30%
Source: 2014-2018 KBB.com Traffic WHERE ARE TRUCK BUYERS? Full-Size Pickups Dominate the Heartland. Mid-Size Trucks Proliferate on the Coasts.
FULL-SIZE & MID-SIZE PICKUP TRUCK REGISTRATION SHARE
Full-Size Truck Registration
Midsize-size Truck Registration
Source: IHS/Markit – New Retail Vehicle Registrations March 2017 – March 2018 There are Some Geographically Differences in Appeal… Full-Size Truck Share Tend to be Stronger in Middle America
FULL-SIZE PICKUP TRUCK REGISTRATION SHARE
Highest Share % • ND – 24.2% • SD – 22.0% • MT – 18.0% • NE – 17.4% • AR – 17.3%
Lowest Share % • DC – 1.1% • NJ – 4.1% • CT – 4.9% • CA – 5.7% • MD – 5.8%
Source: IHS/Markit – New Retail Vehicle Registrations March 2017 – March 2018 … While Mid-Size Trucks are Concentrated in Coastal Areas
MID-SIZE PICKUP TRUCK REGISTRATION SHARE
Highest Share % • VT – 5.1% • AK – 4.8% • WV – 4.7% • OR – 4.5% • NM – 4.4%
Lowest Share % • DC – 0.7% • MI – 1.2% • NJ – 1.4% • NY – 1.5% • IL – 1.6%
Source: IHS/Markit – New Retail Vehicle Registrations March 2017 – March 2018 WHY DO PEOPLE BUY TRUCKS? Truck Shoppers Are Replacing a Truck or Adding a Truck to the Household Fleet
TRADE IN VEHICLE FOR THE NEXT TRUCK PURCHASE 40%
32%
12% 10%
4% 2% 1%
Truck SUV/CUV Sedan Coupe Hatchback/Wagon Van/Minivan NA, I'm not trading in a vehicle
Source: KBB.com Mid-Size Truck Survey, 2018 Q: Regarding your next truck purchase, what type of vehicle are you trading in for it? (Select all that apply.) (N=373) Shoppers Different Activities with Midsize, Work with Full-Size Trucks
ACTIVITIES THAT GO BEST WITH SEGMENT
84% Urban Delivery for Small Business 16%
80% Outdoorsy – Camping/Surfing 20%
52% Towing/Hauling – ATV, Motorcycle Mid-Size 48% Full-Size 39% Home Improvement/Contract Projects 61%
17% Towing/Hauling – Cars, Trailers 83%
Source: KBB.com Mid-Size Truck Survey, 2018 Q28: Please classify the activities that goes best with each category. (N=764) Midsize Truck Defectors Heavily Shop Full-Size Trucks and SUVs, Creating an Opportunity to Target Outside of the Traditional Segment.
CROSS SHOPPING DEFECTION
Full-Size Truck 12.9% Full-Size Truck 28.0%
Mid-Size SUV 6.7% Compact SUV 18.9%
17.5% Compact SUV 6.6% MID-SIZE Mid-Size SUV TRUCK Compact Car 3.8% Compact Car 10.5%
Mid-Size Car 3.7% Mid-Size Car 9.4%
Source: KBB.com Traffic, Q1 2018 Read as: Mid-Size Truck and Full-Size Truck are cross shopping each other at the rate of 12.9% and Mid-Size Truck is defecting to Full-Size Truck at the rate of 28% While Mid-Size Truckers are More Likely to Upsize, Full-Size are Looking at SUVs
CROSS SHOPPING DEFECTION
Mid-Size Truck 3.8% Mid-Size SUV 20.7%
Mid-Size SUV 3.7% Compact SUV 17.4%
10.5% Compact SUV 3.2% FULL-SIZE Mid-Size Truck TRUCK Mid-Size Car 2.4% Mid-Size Car 10.3%
Compact Car 2.3% Compact Car 10.0%
Source: KBB.com Traffic, Q1 2018 Read as: Full-Size Truck and Mid-Size Truck are cross shopping each other at the rate of 3.8% and Full-Size Truck is defecting to Mid-Size SUV at the rate of 20.7% WHAT DO BUYERS WANT IN IN THEIR TRUCKS? Reliability is The Most Important Factor To Shoppers, Followed by Best Value For My Budget, Then Good Brand Experience
MOST IMPORTANT FACTORS WHEN CONSIDERING...
Reliability 26.6% 31.3%
Best value for my budget 15.9% 17.5%
Good experience with this brand of vehicle 10.7% 8.2%
Fuel economy 3.8% 6.7% Full-size Driving performance 6.7% 5.8% Mid-size Driving comfort 6.3% 5.6%
Good experience with this same model 6.6% 4.3%
Reviews/ratings/awards 1.4% 3.8%
Maintenance costs 2.6% 2.4%
Safety ratings 1.5% 1.8% Source: KBB.com Mid-Size Truck Survey and Full-Size Truck Survey, 2018 Q23: Which of the following factors is the MOST important to you when considering a mid-size truck? (N=764) Q23: Which of the following factors is the MOST important to you when considering a full-size truck? (N=1369) Full-Size Considerers Require More Truck Specific Features – Rugged Ones
REQUIRE SPECIFIC TRUCK FEATURES? MUST-HAVES FOR NEXT TRUCKS
Off-roading package 58.0% 46.1% FULL-SIZE Trailer stability assist 45.0% 24.4% Hidden storage compartments 20.1% 57% 24.2% Stowable rear seats 14.8% YES 23.7% Wireless phone charging 21.1% 23.4% Power outlet in truck bed 17.7% 16.7% Built-in Dashcam 16.6% 15.2% MID-SIZE Dual-action tailgate 4.4% 10.2% Full-Size Extendable bed 6.4% 52% 10.2% Mid-Size Speakers in the bed 3.3% YES 2.7% Remote power tailgate 4.4% 2.0% GoPro mount on windshield 1.0% 1.7%
Source: KBB.com Midsize and Full-Size Surveys, 2018 Q9: Of the following features, what are your must-haves for your next mid-size truck? (You can select up to 3 features.) (N=764) Q9: Of the following features, what are your must-haves for your next full-size truck? (You can select up to 3 features.) (N=1369) Note: Sample was rebased with “NA, I don’t require any of these features” removed AWD/4WD and Electronic Stability Control are Required by Truck Shoppers
TOP 5 MUST-HAVE FEATURES
Full-Size Mid-Size
69%
57%
40% 38% 33% 30%
20% 19% 17% 13%
AWD or 4WD Backup camera Bluetooth (allows phone Automatic headlights Electronic stability control connectivity) (vehicle traction) COMPARED TO NON-LUX SUVS 18% 36% 37% 21% 1% NORMS Note: Full list was 27 features Source: KBB.com Mid-Size Truck Survey and Full-Size Truck Survey, 2018 Q24: Please select up to 5 features that your next mid-size/full-size truck must have in order for you to purchase it: (N=764, N=1369) Mid-Size Truck Shoppers Want Gas Engines; 1 in 10 Open to Hybrids Full-Size Shoppers Most Open to Diesel
FUEL/POWER SOURCE CONSIDERATION ON AVERAGE, CONSUMERS EXPECT A COMBINED (CITY/HIGHWAY) MPG Full-size Truck Mid-size Truck
53% Gasoline 94%
24% Considering both gas and diesel Full-Size 19.2 0%
23% Diesel 13%
Hybrid 9% Mid-Size 22.1
Compressed natural gas (CNG) 2%
Source: KBB.com Mid-Size and Full-Size Truck Surveys, 2018 Q8A: Which of the following fuel/power sources are you considering for your new truck? (Select all that apply.) (N=764, N=1369)) Q8B: What is the combined (city/highway) MPG you expect from your next mid-size/full-size truck? (N=764, N=1369)) Hybrid Truck Intentions Are Low but Alternative Fuel Trucks Are Coming
RAM 1500 with A-BAT Mild Hybrid System
F-150 Hybrid W-15 Mid-Size Trucks Shopped for “Outdoorsy” Dimension
Source: KBB.com Consumer Sentiment Survey (July-Dec, 2017) N = 7103 Full-Size Trucks Perceived as Outdoorsy AND Thrill Seeking. Domestic Partisanship is Key Factor.
Fullsize Pickup
Consideration Within Bottom 25% Overall Consideration Consideration Within Top 25%
30.0%
25.0%
20.0%
15.0%
10.0% PredictedConsideration 5.0%
0.0%
Family Outdoorsy Techie Domestic Eco- Oriented Financially Image Self- Thrill Partisan Conscious Responsible Conscious Confident Seeker
Source: KBB.com Sentiment Survey (July-Dec, 2017) N = 7103 There is No Real Preference When it Comes To Infotainment
PREFERENCE ON INFOTAINMENT INFLUENCE OF APPLE CARPLAY/ ANDROID AUTO ON PURCHASING
6% 23% 11%
15% 11% 66% 67%
Apple CarPlay and/or Android Auto Extremely more likely to purchase Somewhat more likely to purchase A proprietary system created by the manufacturer Slightly more likely to purchase I have no preference No influence at all
Source: KBB.com Mid-Size Truck Survey, 2018 Q31: When considering a mid-size truck, which would you prefer when it comes to infotainment (e.g. to make hands-free calls, access navigation, control music)? (N=764) Q32: Would a mid-size truck having Apple CarPlay/Android Auto make you more likely to purchase it? (N=764) There is an Opportunity to Boost Awareness of these Active Safety Systems. About a Third of Shoppers Have Heard of at Least One of the Active Safety Technologies
% OF SHOPPERS WHO HAVE HEARD ABOUT SAFETY TECHNOLOGIES 65%
24% 14% 14% 5%
Toyota Safety Sense Subaru EyeSight Honda Sensing Mazda i-Activsense NA, I have never heard of any of these 22%* 18% 25% 20%
HAD AN EXPERIENCE WHERE THE TECHNOLOGY PREVENTED AN ACCIDENT
Source: KBB.com Mid-Size Truck Survey, 2018 Q33: Which of the following active safety technologies have you heard of? (N=764) Q34: With each active safety technology below, have you personally had an experience where the technology prevented an accident? *Read as: Among those who heard of Toyota Safety Sense (24%), 22% have had an experience with Toyota Safety Sense in which it prevented an accident Price Perceptions are Lower than Actual ATPs. This is an Opportunity to Message the Starting Prices to Broaden Appeal.
Expected Price Expected Price NEW Mid-Sized Truck: NEW Full-Sized Truck: $ $ 26,699 or $481 per month 38,529 or $694 per month
2018 Average Transaction Price 2018 Average Transaction Price $ $ 32,848 or $592 per month 46,474 or $837 per month
Source: KBB.com Mid-Size Truck Survey and Full-Size Truck Survey, 2018 Q13: Typically, mid-size/full-size trucks cost between $20,000 and $40,000. What is the MAXIMUM total price (including options) you will consider for your next new mid-size/full-size truck purchase? (N=373) BUT WHAT ABOUT FUEL ECONOMY AND RISING GAS PRICES? Trucks Now Dominate But What About These Higher Gas Prices?
Prices at the pump were up 24% Y/Y in May, amounting to about $24 more per vehicle per month in average fuel costs
TRUCK SHARE AND MONTHLY FUEL PREMIUM OIL AND UNLEADED GAS PRICES (ON NEW MODELS) WTI Cushing Spot Price Ave Gas Price Unleaded 80% $60.00 $160.00 $4.50 $52.52 $52.03 70% $49.57 $48.36 $4.00 $50.00 $140.00 $45.16 $45.61 68% $3.50 60% 65% $120.00 $38.36 61% 57% $40.00 $3.00 $34.68 50% 53% 53% $34.53 $100.00 51% 52% 51% 50% $2.50 49% 48% $29.43 40% $27.82 $30.00 $80.00 $25.58 $2.00 $60.00 30% $1.50 $20.00 $40.00 20% $1.00
$10.00 $20.00 $0.50 10% $- $-
0% $-
Jul-08 Jul-15
Jan-05 Jan-12
Jun-11
Oct-06 Oct-13
Apr-10 Apr-17
Feb-09 Sep-09 Feb-16 Sep-16 Dec-14
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Dec-07
Aug-05 Aug-12
Nov-10 Nov-17
Mar-06 Mar-13
May-07 May-14
Source: Bloomberg, AAA, Kelley Blue Book, Cox Automotive Rising Oil/Gas Prices May Present Some Challenge to Truck Sales
GAS PRICES
2.80
2.30
1.80
1.30
0.80 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18
Source: Bloomberg, AAA, Kelley Blue Book, Cox Automotive Then (2008) And Now (2018): Gas Prices
CAR SUV TRUCK VAN OVERALL MPG OVERALL MPG 2008 24.8 18.6 16.0 17.8 21.4 2009 25.3 19.6 16.2 17.7 22.1 24.7 24.7 24.5 24.6 24.6 2010 25.8 20.4 16.3 18.0 22.3 24.2 2011 26.5 20.8 16.5 18.9 22.8 23.7 2012 27.7 21.2 16.5 19.1 23.7 2013 28.5 21.9 16.7 19.1 24.2 22.8 2014 28.9 22.3 17.2 19.2 24.5 22.3 2015 29.1 22.9 18.0 19.3 24.7 22.1 2016 29.4 23.1 18.1 19.4 24.6 21.4 2017 29.6 23.4 18.4 19.7 24.6 2018 29.9 23.7 18.5 19.6 24.7
FLEET IMPROVEMENT (2018 vs. 2008) SUV CAR TRUCK
24.7% 20.5% 13.7% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: The Conference Board, Moody’s Analytics Fuel Efficiency Gains Will Be Harder To Replicate Going Forward
Even with aggressive goals, the savings diminish with each additional MPG relative to gains already realized
FUEL EFFICIENCY GAINS SEE DIMINISH SAVINGS 1,200
1,000
800 Truck MPG improvements since 2007 result in 160 less gallons needed 705.9 600
545.5 To replicate those gains, trucks need to get to 31 MPG
400 Gallons Gallons Per Needed Year 387.1 The next leap would require reaching 50 MPG
200 240.0
0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Miles Per Gallon
Source: Kelley Blue Book, Cox Automotive Consumers Also Point To $4 Per Gallon As A Tipping Point
WHERE DO YOU EXPECT GAS PRICES TO BE IN…. At what price per gallon 30 Days 1 Year would you consider gas to Median be reasonable? = 62% $2.50
45%
At what price per gallon would 25% you consider gas to be so 22% expensive that it greatly 18% affects the type of vehicle you Median 13% would consider purchasing (i.e. 8% = 4% sedan instead of SUV or hybrid $4.00 0% 1% instead of standard)?
Much lower Somewhat lower Stay the same Somewhat higher Much higher
Kelley Blue Book, May 2018 Consumer Survey IS THERE DEMAND FOR AN EVEN SMALLER TRUCK? The Road Ahead
RETURN OF THE COMPACT PICKUP TRUCKS OF THE 80’S AND 90’S? Small Truck Could Fill a White Space Missed by Full-Size and Mid-Size
PURCHASE/LEASE INTEREST IN SMALL PICKUP TRUCK AMONG THOSE WHO ARE IN MARKET FOR TRUCKS
Very Interest Somewhat Interested Slightly Interested Not Interested At All
24%
51% 12%
13%
Source: KBB.com Quick Polls, May 29 to June 6, 2018 (N=405) Question: If a small pickup truck (smaller in size than a mid-size truck such as the Toyota Tacoma, Chevy Colorado) were available in the market, how interested would you be in buying or leasing one? Small Truck May Capture Shoppers Looking for More MPG and Affordability
MAIN ADVANTAGE OF A SMALL PICKUP TRUCK VS. A MID-SIZE TRUCK 32%
26% ARE THERE ADVANTAGES TO A SMALL TRUCK? 17% 72% YES 7% 7% 6% 5%
More fuel More affordable Easier to park Easier to More fun to More Safer efficient load/unload drive reliable/durable cargo
Source: KBB.com Quick Polls, May 29 to June 6, 2018 (N=348) Question: What is the main advantage of a smaller pickup truck vs. a mid-size truck (e.g. Toyota Tacoma Chevy Colorado)? (select top 3) Enter The Hyundai Santa Cruz to Fill that Need
EXPECTED TO HIT SHOWROOMS IN 2020
17K Santa Cruz Forecasted Volume*
Source: 2018 IHS Markit Note: Forecasted volume is based on CY20 to CY25 projections Key Takeaways
• Pickup truck sales are potentially benefitting from the expanding economy and the rise in total construction in the U.S. This may present an opportunity for OEMs and Dealers to plan for the upswing.
• Despite the new car market softening, it is good news for trucks to garner additional market share. However, to some extent, it is at the expense of other segments or to a greater extent, from shoppers looking to replace their trucks or adding to their household fleet. This is an opportunity to strengthen CRM to retain the loyalists and message to entice shoppers who are new to the pickup market.
• To effectively message to mid-size and full-size shoppers, it is crucial to understand their differences in psychographic mindsets, usages/activities, pricing expectations, feature needs and more. Targeted, unique strategies for both types of pickup will reduce cannibalization.
4 8 Key Takeaways
• Shopper loyalty tend to differ significantly between mid-size and full-size pickups and that may be influenced by the domestic partisan among full-size truck considerers. This may create an opportunity to shape the mid-size truck landscape for domestic brands launching new trucks soon in an ever-growing segment.
• There may be an emerging new segment in the pickup market - Small Trucks. Those who are shopping for more affordability and fuel efficiency may see small trucks as the alternative to mid-size trucks or SUVs. And the first one to launch in the segment will be the Hyundai Santa Cruz. This may be an opportunity for OEMs to explore unmet needs and potentially develop a new segment or compete in the small truck market. THANK YOU Media Strategic Insights OEM Sales Analytics Consulting BRAND/MODEL SPECIFICS Construction Investments are Growing and Projected to Expand Further, Which May Be an Opportunity for OEM to Sell More Pickup Trucks to Support New Housing Starts
TOTAL HOUSING STARTS (IN BILLIONS USD) 369.29 350.28 330.91 308.91 286.78 273.68 239.04
2015 2016 2017* 2018* 2019* 2020* 2021*
Source: Statista, February 2018 Note: Housing Starts are based on Residential only Tacoma Was The Only Truck Seen as a Leader by Shoppers; Shoppers Perceive Colorado and Ridgeline as Modern
TOP 3 WORDS SELECTED TO DESCRIBE EACH TRUCK
Colorado Ranger (Old) Canyon Ridgeline Frontier Tacoma Uncomfortable Comfortable 1 1 2 2 1 3 Cheap 2 3 Expensive 1 1 2 Mediocre 2 3 3 2 Leader 1 Boring Fun Outdated Modern 3 3 Rugged Cute
Source: KBB.com Mid-Size Truck Survey, 2018 Q12: For each truck, choose the single best description. (You can use the same description for multiple trucks.) Note: For each truck, only respondents who were familiar answered this question. “Best Available” Auto Rates Jumped at the End of April
INTEREST RATES
New Auto 60 Mo New Auto 48 Mo Used Auto 36 Mo US 10 Year Treasury Fed Discount Rate
9
8
7
6
5 % 4
3
2
1
0
Source: Bankrate.com, US Federal Reserve, Bloomberg Tacoma is The Top Truck Shoppers Are Considering Within The Next 12 Months
TRUCK CONSIDERATION
Tacoma 56.3%
Colorado 37.7%
Ranger 24.7%
Canyon 23.2%
Frontier 22.5%
Ridgeline 19.0%
Gladiator Pickup 7.2%
Source: KBB.com Mid-Size Truck Survey, 2018 Q5: Which mid-size trucks are you considering within the next 12 months? (Select all that apply.) (N=764) Silverado 1500 is a Top Truck Shoppers are Considering Within The Next 12 Months
TRUCK CONSIDERATION F-150 34%
Silverado 1500 31%
F-250/F-350/F-450 Super Duty 23%
Ram 1500 22%
Sierra 1500 20%
Silverado 2500/3500 HD 20%
Ram 2500/3500/4450 19%
Sierra 2500/3500 HD 15%
Tundra 13%
Titan 6%
Titan XD 3%
Source: KBB.com Full-Size Truck Survey, 2018 Q5: Which full-size trucks are you considering within the next 12 months? (Select all that apply.) (N=1369) Steel May Be Perceived to Be More Durable; But Consideration for Aluminum is Respectable at Around 50%
MORE DURABLE – ALUMINUM OR STEEL? ALUMINUM BODY CONSIDERATION
Steel Aluminum
Full-Size Truck Mid-Size Truck 51%
25% 21% 48%
75% 79% Full-size Truck Mid-size Truck
Source: KBB.com Full-Size and Mid-Size Truck Survey, 2018 Q26: Steel vs. aluminum truck bodies. Which do you think is more durable? (Full-Size N=1369, Midsize N=764) Q27: Are you considering a truck with an aluminum body? (N=1369, Midsize N=764) MID-SIZE TRUCK FAMILIARITY AND OPTIONS The Resurgence of the Ranger Back into the Market May Be Disruptive to the Segment with 19% Having Previously Owned it
MID-SIZE TRUCK EXPERIENCE
Have ridden in one Previously owned Currently own
Tacoma 37% 10% 10%
Ranger (OLD) 28% 19% 4%
Frontier 21% 6% 3%
Colorado 23% 3% 4%
Ridgeline 13% 2% 2%
Canyon 13% 1%1%
Note: “Never heard of it” and “Have heard of it only” are not charted
Source: KBB.com Mid-Size Truck Survey, 2018 Q10: Which best describes your experience with each of the following mid-size trucks? (N=764) The Majority of Shoppers (75%) Have Experienced Silverado 1500
FULL-SIZE TRUCK EXPERIENCE
Have ridden in one Previously owned Currently own
F-150 42% 23% 14% Silverado 1500 38% 23% 14% F-250/F-350/F-450 Super Duty 42% 13% 10% Ram 1500 41% 14% 7% Silverado 2500/3500 HD 40% 11% 6% Ram 2500/3500/4450 37% 6% 6% Sierra 1500 40% 11% 5% Sierra 2500/3500 HD 37% 5% 3% Tundra 35% 4% 3% Titan 21% 2% Titan XD 12%
Note: “Never heard of it” and “Have heard of it only” are not charted
Source: KBB.com Full-Size Truck Survey, 2018 Q10: Which best describes your experience with each of the following full-size trucks? (Select all that apply.) (N=1369) Comfortable is a Central Theme However Ridgeline and Canyon Stand Out for Being Perceived as Modern and Expensive
TOP 3 DESCRIPTIONS AMONG CONSIDERERS
Tacoma Frontier Ridgeline Canyon 1. Leader 1. Comfortable 1. Modern 1. Comfortable 2. Comfortable 2. Rugged 2. Comfortable 2. Expensive 3. Rugged 3. Leader 3. Expensive 3. Modern
Source: KBB.com Mid-Size Truck Survey, 2018 Q12: For each truck, choose the single best description. (You can use the same description for multiple trucks.) Read as: Tacoma considerers described Tacoma as being a Leader, Comfortable and Rugged. The Upcoming Gladiator is Unique as it is Recognized for Fun
TOP 3 DESCRIPTIONS AMONG CONSIDERERS
Colorado Ranger Gladiator 1. Comfortable 1. Comfortable 1. Rugged 2. Modern 2. Cheap 2. Fun 3. Leader 3. Leader 3. Leader
Source: KBB.com Mid-Size Truck Survey, 2018 Q12: For each truck, choose the single best description. (You can use the same description for multiple trucks.) Read as: Ranger considerers described Ranger as being Comfortable, Cheap and a Leader. Full-Size Trucks Share Similar Imageries as Mid-Size Ones
TOP 3 DESCRIPTIONS AMONG CONSIDERERS
F-150 Silverado 1500 Sierra 1500 Ram 1500 1. Comfortable 1. Comfortable 1. Comfortable 1. Comfortable 2. Leader 2. Leader 2. Expensive 2. Rugged 3. Rugged 3. Rugged 3. Leader 3. Leader
Source: KBB.com Full-Size Truck Survey, 2018 Q12: For each truck, choose the single best description. (You can use the same description for multiple trucks.) Read as: F-150 considerers described F-150 as being as Comfortable, Leader, and Rugged. Japanese Trucks are Perceived Similarly with Titan Being Seen as Modern
TOP 3 DESCRIPTIONS AMONG CONSIDERERS
Tundra Titan 1. Comfortable 1. Comfortable 2. Leader 2. Modern 3. Expensive/ 3. Expensive/ Rugged (Tied) Rugged (Tied)
Source: KBB.com Full-Size Truck Survey, 2018 Q12: For each truck, choose the single best description. (You can use the same description for multiple trucks.) Read as: Tundra considerers described Tundra as being Comfortable, a Leader, Expensive and Rugged. In Terms of Owner Satisfaction, Tacoma Ranks at The Top
SATISFACTION WITH TRUCKS OWN/OWNED (TOP 2 BOX)
Tacoma (N=154) 68%
Ridgeline (N=28) 57%
Frontier (N=69) 49%
Canyon (N=21) 43%
Colorado (N=50) 38%
Ranger OLD (N=176) 34%
Note: Data is directional. N values are low for some vehicles.
Source: KBB.com Mid-Size Truck Survey, 2018 Q11: Overall, how satisfied are you with each of the trucks you own/owned based on the scale below? (Scale: 1 = Not at all satisfied and 10 = Extremely satisfied) Silverado’s Owner Satisfaction is Lower Than Others – It Ranks in The Bottom Half
SATISFACTION WITH TRUCKS OWN/OWNED (TOP 2 BOX)
Tundra 62%
Ram 2500/3500/4450 55%
Sierra 1500 54%
F-250/F-350/F-450 Super Duty 53%
Sierra 2500/3500 HD 52%
Silverado 2500/3500 HD 50%
Silverado 1500 49%
Titan 48%
F-150 44%
Ram 1500 44%
Source: KBB.com Full-Size Truck Survey, 2018 Q11: Overall, how satisfied are you with each of the trucks you own/owned based on the scale below? (Scale: 1 = Not at all satisfied and 10 = Extremely satisfied) STYLING EXERCISE NOTE: ALL VEHICLES WERE DEBADGED Shoppers Selected Tacoma, Colorado, And Canyon as Having The Best Debadged Styling
TOP 3 TRUCKS WITH THE BEST DEBADGED STYLING
65%
50% 50%
41% 39%
28% 27%
Tacoma Colorado Canyon Frontier Ranger Gladiator Pickup Ridgeline Note: All vehicles were debadged and shown to shoppers
Source: KBB.com Mid-Size Truck Survey, 2018 Q15: Please choose the 3 vehicles that have the BEST styling. (N=764) The Most Recognizable Debadged Styling Went to Jeep Gladiator; Very Few Respondents Were Able to Identify The New Ranger as a Ford
% OF SHOPPERS WHO GUESSED THE CORRECT AUTOMAKER TO TRUCK
96%
67% 65% 57% 45% 34% 19%
Gladiator (N=216) Colorado (N=380) Tacoma (N=493) Frontier (N=317) Canyon (N=380) Ridgeline (N=206) Ranger (N=300)
Source: KBB.com Mid-Size Truck Survey, 2018 Q18: You selected the truck below as having one of the BEST styling. Which automaker makes it? Shoppers Selected Sierra, Silverado, and F-150 As Having The Best Debadged Styling
TOP 3 TRUCKS WITH THE BEST DEBADGED STYLING
72% 61% 56% 49% 37% 25%
Sierra 1500 Silverado 1500 F-150 Ram 1500 Tundra Titan Note: All vehicles were debadged and shown to shoppers Source: KBB.com Full-Size Truck Survey, 2018 Q15: Please choose the 3 vehicles that have the BEST styling. (N=1369) The Most Recognizable Debadged Styling Went to Ram 1500
% OF SHOPPERS WHO GUESSED THE CORRECT AUTOMAKER TO TRUCK
93%
77% 69% 59% 58%
24%
Ram 1500 F-150 Silverado 1500 Sierra 1500 Tundra Titan (N=675) (N=761) (N=835) (N=983) (N=513) (N=340)
Source: KBB.com Full-Size Truck Survey, 2018 Q18: You selected the truck below as having one of the BEST styling. Which automaker makes it? There is an Opportunity to Boost Awareness of these Active Safety Systems. About a Third of Shoppers Have Heard of at Least One of the Active Safety Technologies
% OF SHOPPERS WHO HAVE HEARD ABOUT SAFETY TECHNOLOGIES 65%
24% 14% 14% 5%
Toyota Safety Sense Subaru EyeSight Honda Sensing Mazda i-Activsense NA, I have never heard of any of these 22%* 18% 25% 20%
HAD AN EXPERIENCE WHERE THE TECHNOLOGY PREVENTED AN ACCIDENT
Source: KBB.com Mid-Size Truck Survey, 2018 Q33: Which of the following active safety technologies have you heard of? (N=764) Q34: With each active safety technology below, have you personally had an experience where the technology prevented an accident? *Read as: Among those who heard of Toyota Safety Sense (24%), 22% have had an experience with Toyota Safety Sense in which it prevented an accident Overall, Shoppers Feel Colorado Has Improved The Most in The Past 5 Years
MOST IMPROVED TRUCK IN THE PAST 5 YEARS
29.1% 28.8%
12.6% 11.1% 8.2% 6.3%
Chevrolet Colorado Toyota Tacoma Honda Ridgeline Ford Ranger GMC Canyon Nissan Frontier
Source: KBB.com Mid-Size Truck Survey, 2018 Q29: In your opinion, which mid-size truck has improved the most in the last 5 years? (N=764) Q30: Please explain your answer.