Forget fancy sports cars, pickups have become some of the most expensive vehicles on the road, according to the Detroit News. These days no-frills trucks are a thing of the past as automakers add luxury and safety features to keep up with crossovers and sedans.
The newspaper reports that average transaction price for large pickups, including full-size and heavy-duty models, increased 37.4 percent in the last decade to $42,103 in 2014, according to auto research and pricing website Edmunds.com. Without adjusting for inflation, that’s nearly $10,000 more than the industry average last year, $16,500 more than a mid-sized car and the highest growth of any mainstream segment in the U.S. since 2004.
Pickups, which a decade ago often were no-frills and typically had fewer safety features than SUVs or cars, are now increasingly being used for other purposes as well as for work trucks. These more expensive vehicles are among the highest profit products for Detroit’s Big Three automakers.
“People are using these now for family transportation, and they expect all of the amenities; the stuff that they use to demand, whether it was a sport utility, a luxury sedan, now they want all these appointment amenities on pickup trucks,” said Bob Hegbloom, president and CEO of the Ram Truck Brand. “People are now demanding it.”
For Ram 3500 trucks, 44 percent of models are $60,000 or more, Hegbloom said. In 2009, Chrysler sold just one Ram 2500 model that cost $60,000; today, 27 percent of 2500 trucks cost $60,000 or more. “The growth has been just crazy,” Hegbloom said. “I still think there’s room above.”
Automakers, especially the Detroit Three, which dominate pickup sales in the U.S., continued to increase options and accessories as well as luxury trims that can more than triple the price of the base pickup.
Each of the Detroit automakers has announced new premium models for their full-sized pickups, including Ram’s redesigned top-end Laramie Limited model, unveiled last week at the 2015 Chicago Auto Show. The company has not announced pricing, but it will likely start at around $50,000.
The introduction comes as crosstown rivals Ford Motor Co. and General Motors Co. have announced new premium models in recent years, including a Ford F-150 Platinum that starts at about $51,000 and a Chevrolet Silverado 1500 High County starting at about $49,000.
“A lot of it is just additional content,” said Edmunds.com senior analyst Jessica Caldwell. “People identify with their trucks, and a lot of people take pride in having a nice truck.”
Automakers are finding ways to even hike prices on lower-priced trucks. GM unveiled a new 2015 Silverado Custom with 20-inch aluminum wheels, chrome bumpers, a body-colored top cap above the front bumper, and chrome mirror caps and door handles. It starts at $33,820 compared with $31,940 for a similar truck without the custom features.
“There’s a lot of people out there looking for a great-value truck,” said GM North America President Alan Batey. “We are doing really well at the top end but this is really hit at the lower end.” Still, people want more than a work truck, something “that looks great on the road,” he said.
With demand for trucks strong, automakers are working to boost production. Batey said GM “would like to have a few more (trucks), to be honest with you — so we are squeezing every last one we can out of production.” He said a third shift of workers are training at its Wentzville, Missouri, assembly plant to build its midsize Colorado. The shift is expected to start in March.
Batey said early data shows that just 17-18 percent of Colorado buyers are coming from current full-size truck owners. He said many buyers are first-time truck buyers who formerly owned compact cars — “and a lot of them are parents buying them for their kids,” Batey said.
With all the bells and whistles possible, 2015 full-size pickups for GM’s Chevrolet and GMC brands, as well as Ford’s, can be upward of $70,000. Ram’s 1500 model can cost about $60,000. Top-end prices can increase to more than $75,000 for tricked-out, heavy-duty pickups.
“It’s really gotten almost unbelievable where you can go on the price,” said Edmunds.com senior editor Bill Visnic. “There doesn’t seem to be a top for a buyer who’s out there.”
Luxury pickups combine the capability that truck buyers are accustomed to with luxury amenities and features traditionally found in luxury sedans and sport utility vehicles. They feature everything from LED lights and chrome exterior packages to advanced towing and driving systems. The 2015 F-150, for example, offers adaptive cruise control, active park assist and a 360-degree camera system.
Why offer pickups that can cost more than the U.S. median household income? Because there’s a growing demand, and they significantly increase profit margins per vehicle for automakers.
“They’re brilliant for the auto manufacturers because you’re going to charge plenty of money for that and it’s not a ton of investment,” said IHS Automotive senior analyst Stephanie Brinley.
Ford expects 30 percent of its F-150 sales this year to be in its top three Lariat, Lariat King Ranch and Platinum luxury trims. GM says 50 percent of its Sierra 1500 sales are in its top two Denali and SLT trims, and 25 percent of Silverado 1500 models are LTZ or High Country. Ram touts its four luxury trims account for 38 percent of its 2015 1500 models.
Hegbloom said he doesn’t see the luxury pickup market slowing anytime soon: “I don’t believe we’ve reached the ceiling yet.”
Neither do industry analysts, thanks to better financing options, a healthy economy and new models featuring advanced technologies and luxury amenities that buyers want.
“There’s just a more expansive market for luxury pickups right now,” Visnic said. “It’s a much more respective market.”