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Ranger's in danger: Is Ford out?
Small-truck segment sags; company weighs its options


Richard Truett

Automotive News | 1:00 am, June 4, 2007




The clock is ticking on Ford Motor Co.'s ancient Ranger compact pickup, the plant where it is built and maybe the entire compact pickup segment.

Next year, Ford will close the St. Paul, Minn., plant where the Ranger is assembled. Soon the automaker must decide whether to schedule a Ranger replacement or bail out of the segment.

It will be a tough call. Last year Ford sold only 92,420 Rangers, down 59.1 percent since 2002. Yet Ford will be reluctant to abandon a segment that attracts first-time buyers to the brand.

Ford's competitors will face similar decisions. Industrywide, U.S. sales of compact pickups have dwindled from about 800,000 units in 2002 to about 611,000 last year. So far this year, segment sales are down 10.1 percent.

Not even higher fuel prices or new products such as the Honda Ridgeline, Chevrolet Colorado and GMC Canyon have been able to rekindle demand.

Only one small pickup - the Toyota Tacoma - has bucked the trend. In 2005, Toyota redesigned the Tacoma for the first time in a decade. Last year Tacoma sales totaled 178,351, up 16.6 percent since 2004.

Pricing issue

Contractors don't buy small trucks because they can't haul heavy loads, says Jeff Schuster, an analyst with J.D. Power and Associates. Likewise, retail customers often upgrade to full-sized trucks because the price bump is marginal.

For instance, the Colorado and Canyon have been criticized for not having enough power. The cost to upgrade from one of them to a full-sized pickup with a bigger engine - such as the Chevrolet Silverado or GMC Sierra - can be less than $2,000.

And the relatively good fuel economy of small pickups isn't as important as it used to be, despite rising gasoline prices. "Fuel prices really haven't changed demand for the vehicle," said Buzz Morgan, new-car sales director at Helfman Ford in Houston.

In May the dealership sold only nine Rangers, negligible volume for a store that sells 130 new cars and trucks a month. And five of those Rangers went to fleet buyers so only four consumers bought the pickup.

Many shoppers reject the Ranger because the larger F series carries an attractive price, Morgan said. "A nicely equipped Ranger is almost as much as a regular cab F-150," he said.






Propped up by CAFE

Automakers have relied on small trucks to help meet corporate average fuel economy standards. To improve their overall fuel economy, automakers often have priced small pickups at rock-bottom prices.

But those days are winding down. New rules that begin being phased in this year enable automakers to calculate fuel economy one of two ways.

For the 2008 through 2010 model years, they still can use a fleet average. Or they can meet different fuel economy targets for trucks of different sizes, measured by the vehicle's "footprint," the area bounded by the four wheels. The size-based method becomes mandatory in 2011.

Ford won't comment on the Ranger's future, and neither will suppliers. Ford dealers are in the dark about Ford's plans.

Kevin Collins, chairman of Ford's dealer council, said Ford has not told dealers when or whether the Ranger will be replaced. But he said he thinks Ford needs to stay in the segment with a vehicle priced below the F-150.

"There is a need for a vehicle near the Ranger segment," Collins said. "I am not sure anyone has figured out yet what that thing should be. If you look at the Dodge Dakota, which is a step up in size from the Ranger, they've had some bumps in the road with that."

Unpleasant choices

Analysts with knowledge of Ford's product plans say the automaker is studying these options:
Kill it. The Ranger is ancient. Its last major upgrade came in 1993. Ford lost a record $12.6 billion last year and can't afford to invest in shrinking market segments. The current version is not scheduled for production after 2008.
Move it. Ford could shift Ranger production to another plant, such as Louisville, which builds the Ford Explorer. But that would require investment in an aging vehicle with declining sales.
Replace it with an import. Ford could import a small truck from South America, Asia or Australia. Candidates include the Ford Courier from Brazil, the Ute from Australia and the Mazda BT-50 built in Thailand.


Mark Fields, Ford's president of the Americas, has cautioned that any imported trucks would have to make financial sense. Given the weak U.S. dollar plus the 25 percent tariff on imported pickups, it would be difficult for Ford to make money.

If Ford moves the Ranger to St. Louis, it would be a strong signal that the company plans to continue in the compact pickup segment, either with a redesign or an import.

If it doesn't, at the very least, it's likely that compact pickups would disappear from the Ford line for awhile. But Ford won't discuss the continuity issue. Spokesman Wes Sherwood would say only: "Ford is studying the market."

Entry-level lure

On the plus side, small pickups offer automakers an opportunity to attract first-time buyers to their brand. That's why Catherine Madden, a senior analyst at Global Insight in suburban Detroit, predicts Ford won't bail out.

"It brings consumers into the Ford fold who might eventually move into full-sized trucks," she said.

Madden predicts Ford will replace the Ranger with a small import from South America or Asia.

Collins, the Ford dealer council chairman, said he would like to see the Ranger replaced by a vehicle that can haul a larger payload - without a price increase. He said that a version of the Ford Sport Trac SUV could meet those criteria, and that Ford could move quickly if it adapts a vehicle already in production.

The last Rangers probably will roll off the assembly line late next year, said Bob Killeen, secretary and treasurer of UAW Local 879 in St. Paul. He said UAW officials have not heard of any plans to replace the Ranger.

It does seem ironic that the small-pickup segment is deteriorating even as automakers rush to design a new generation of small cars. But no one - analysts, dealers or auto executives - expects a quick turnaround for small pickups.

"All manufacturers are looking at their options," said J.D. Power's Schuster. "The sales volume is coming down pretty dramatically."


Source: www.autonews.com/ subscription required
 

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If Ford bails out of this segment. They might as well close the company. This is not a minivan
 

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Can't believe this will happen,around here the sellers are the base models, and many companies buy them contrary to the article. My immediate family alone has bought over 14 yes 14 including the first one to hit the dealership years ago.They have all been base models with no options but A/C 4cyl 5 speeds.All of us agree that for now Ford should sell the Ranger as a base model only (well maybe a XLT trim pkg for those who must have that!)with limited options such as A/C or automatic trans. only. The base truck is great for everyone from teens to older people needing a economical truck.The local dealer is an example of how NOT to sell Rangers, most are loaded up with V-6 AT etc XLT trim and are higher than base F-150 work trucks . Nuts. I'd keep going with a base one ONLY, cheaper than anything else in the segment, then redo it into a mini F series. AND please Ford lose the super high seat backs, hard to see over in the base model configuration. What's wrong with an old fashioned bench seat type ?Anyhow please don't kill the Ranger!
 

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here's a "re-badge" of the Richard Truett, Automotive News article
from blogs.motortrend.com Fords-Ranger-remake-it-replace-it-or-kill-it

"2. Put the Ranger on hiatus for a year or two while a new state-of-the-art
model is developed and a plant is tooled up. If they go this route, they
may want to think about putting "compact" back in the compact pickup.
Offerings such as Dodge's Dakota and GM's Colorado/Canyon, for
instance, have grown so much they're bumping up against their full-size
cousins. A truly compact, rugged, and fuel-efficient vehicle, under
$15,000 to start, could be just what the doctor ordered."
 
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