If you want a vivid example of how fast and furious changes are occurring in the light commercial truck market, look no further than the Chrysler Group LLC.
A scant two years after its divestiture from Germany's Daimler AG, Chrysler teetered on the brink of ruin until receiving a $4.5-billion emergency loan from the U.S. government this January. What quickly followed was a bankruptcy proceeding and subsequent acquisition by Italy's Fiat SpA. Now the U.S. automaker is planning a comeback, in part by putting its commercial truck operations into a separate division and making changes to its product mix.
Fred Diaz Jr., president & CEO of the new Dodge Ram brand, said the reorganization is part of a sweeping five-year growth plan for Chrysler as a whole unveiled back in November. Diaz noted that the company plans to cease production of the light-duty Dodge Dakota pickup in 2011, with tentative plans to replace it with a new uni-body midsize truck that same year.
Then in 2012, he said the division plans to introduce both large and small commercial truck models imported by Fiat. Diaz expects these additions will help foment a 50% increase in Chrysler's commercial truck sales growth from 280,000 units this year to 415,000 units by 2014.
Ram's large commercial van will be based on the Fiat Ducato, which is built and sold in Europe both under the Fiat and Peugeot nameplates. It is also currently sold in Mexico. The Ducato is a similar vehicle to the short-wheelbase versions of the Daimler-produced Sprinter van, which was discontinued as a Dodge-branded product after Chrysler's former owner Daimler AG dissolved its final links with the American OEM earlier this year.
To compete with the popular new Transit Connect light-duty commercial van introduced by Ford Motor Co., Dodge also plans to add Fiat's European-built Doblo light van to its product offerings in 2012. It's unclear whether the truck's current diesel engine would be retained for the U.S. market, or whether Chrysler will follow Ford's lead and replace it with a small gasoline engine. There are plans to also offer an electric version of the light van here, just as Ford has said it will build a Transit Connect BEV.
To improve the overall fuel-efficiency of its truck lineup, Chrysler said it will offer a Fiat engine and fuel-saving engine technology as soon as 2010. By 2014, it will have replaced almost three-quarters of Chrysler's current engine lineup for this segment.
In another move designed to enhance its commercial truck business, “dealers will have extended service hours and additional equipment to service this segment of the market,” said Peter Grady, vp-network development & fleet for Chrysler.
The adoption of Fiat models, with retooling for the U.S. market, are part of a massive realignment of resources within Chrysler to accommodate a new five-year business plan, noted Scott Kunselman, Chrysler's chief engineer.
“We're going to maximize use of common platforms, systems and components through sharing with Fiat Group and expansion of Chrysler usage,” Kunselman explained. “We'll be focused on maximizing fuel economy by reducing vehicle weight and optimizing aerodynamics; enhancing speed to market using Fiat Group timing benchmarks, virtual tools and component communization; and implement advanced powertrain systems across vehicle platforms.”
The weak global economy, falling sales, and high research and development costs are putting the crimp in many light-duty truck plans for U.S., European and Japanese automakers alike. As a result, their view of the light-truck market is becoming much more narrowly focused, forcing them to pick only a handful of new product directions at the expense of others.
For example, light-duty diesel engines for the North American car and truck market are pretty much dead in the water, and are expected to remain that way for some time to come. According to Ward's AutoWorld panelists at the 2009 conference on Directions in Engine Efficiency and Emissions Research (DEER) sponsored by the U.S. Dept. of Energy, the U.S. market, which is at less than 10 million units a year now, is playing havoc with the automotive industry's bottom line. Meanwhile, the increased focus on advanced gasoline engines and other competing technologies designed to meet tightening fuel-economy regulations is directing attention and dollars away from diesels, they say.
A year ago, diesels looked to be the hot ticket in the U.S., but not anymore. “If you go back one year, we were tracking 30 diesel passenger-car makes and models coming to the market alongside 16 light-duty diesel pickup trucks and SUVs,” said John Pinson, vp-diesel engines for consultant Ricardo Inc. “And now, what do we have? Five?”
Diesel programs for light-duty pickups, SUVs and passenger cars were shut down across the board by Ford Motor, Chrysler, Honda Motor, Nissan Motor and even Toyota Motor, which had long eyed adding a diesel to its Tundra line of pickups.
General Motors' 4.5-liter V8 diesel for light-duty pickup and SUV applications remains on the shelf even though development largely is completed. “Fuel prices and capital constraints tabled that for now,” noted Daniel Hancock, GM's powertrain vp-global engineering, at the DEER event.
The OEM has also stopped taking orders for diesel-powered models of its versatile Savana and Express light-duty commercial vans as it will not begin production of its new 2010-compliant diesel engines until May.
“We have had a surge of orders for diesel-powered vans,” noted GM's Dan Tigges, full-size truck product manager, at a Truck Product Conference sponsored by the National Truck Equipment Assn. “Because of that, we cut off orders for diesel vans. We will build those trucks probably until early December. After that, we will have a five-month dark period on diesel engines — January through May. After May 24, we will start production with the new diesel engine. These will be 2010 trucks. We will come out with 2011 model-year trucks in late August.”
The story is much the same for GM's pickup and chassis cab models. “We will continue to build trucks into the first quarter of 2010 using engines that are still in the pipeline,” Tigges said. “[Sometime during] January to February, we will be done producing regular cabs and crew cabs. We will then have a three-month dark period during which we will produce no diesel-powered work trucks. We will be back in business with the new engines in May 2010 for regular and crew-cab models,” which will be designated 2011 models.
Though light-truck OEMs are trimming their sails in some quarters, they're hoisting them in others. Ford provides a good example, as it has forged ahead with its new light-duty Transit Connect commercial van and retooled its venerable F-150 pickup line despite the strong headwinds brought on by a faltering economy, falling vehicle sales and fewer product investment dollars.
“The F-150 is the ultimate all-around, do-everything truck, and we've made it available in 10 different distinct versions; everything from an XL work truck to a Platinum luxury edition,” said Mark Grueber, Ford's F-150 marketing manager. For the 2010 model, Ford boosted the F-150's fuel economy to 15 mpg city and 21 mpg highway for its standard engine, an 8% improvement over the previous model year; and a 12% gain for the 5.4-liter V8 equipped versions.
Standard safety equipment now includes a safety canopy side-curtain air bag rollover protection system; new “K-bag,” a front seat dual-chamber side air bag named for its unique shape and designed to help protect the rib cage from excessive crash forces during a side impact; trailer sway control; and AdvanceTrac with roll stability control. Ford also boosted the F-150's work ability by beefing up maximum towing capability to 11,300 lbs. and maximum payload capability to 3,030 lbs.
Ford's new Transit Connect, based on a design imported from Europe, is geared to tap into urban delivery needs. The van's 2.0-liter engine, 135 cu. ft. of cargo space, 1,600-lb. payload capacity, and various cargo management systems are geared to make it appeal to the broadest cross section of customers possible, including those looking for all-electric vans.
The company recently partnered with Azure Dynamics Corp. to deliver a pure battery electric Transit Connect van for U.S. and Canadian markets in 2010. “We recognize an increasing interest in electrified vehicles and have an aggressive strategy to bring these vehicles to the marketplace,” said Nancy Gioia, Ford's director of global electrification. “[It] will allow us to offer our commercial customers an additional option for environmentally friendly transportation.”
GM is hot on Ford's heels in the light truck arena as well. The company recently boosted the fuel economy of its Chevrolet Silverado and GMC Sierra pickups equipped with 5.3-liter V8 engines from 14 mpg city/20 mpg highway to 15/21 for the 2010 models. Extra Fuel Economy (XFE) models move from 15/21 to 15/22.
Contributing to this development is a new fuel-saver mode that enables both pickup models to make better use of GM's Active Fuel Management technology by running on four cylinders in light throttle conditions instead of eight. In addition, more efficient 6-spd. transmission shift points, engine variable valve timing and a lower gear ratio of 3.08 (now standard on GM full-size pickups) each play an important role in the improved fuel economy. Horsepower, payload and trailer towing specifications, however, remain the same for its pickups.
GM also recently invested $21 million in its Flint, MI, assembly plant to renovate existing heavy-duty assembly processes and add new machinery, equipment and tooling to support the 2011 Chevrolet light-duty crew cab due to start production in mid-2010.
“This investment in light-duty crew cab capability enhances Flint assembly's manufacturing flexibility and future competitiveness,” said Larry Zahner, GM manufacturing manager. “The plant will now be able to produce both heavy-duty and light-duty trucks for GM on the same assembly line.”