Numbers Show Tundra Is Poised to Eclipse GMC Sierra, Possibly Overtake Ram 1500

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Over the last few weeks, PickupTrucks.com has published both 2012 half-ton retail sales figures and 2012 total half-ton sales, which gives us the data we need to talk about “fleet mix,” or the percentage of trucks that Ford, GM, Ram-Fiat, Toyota, and Nissan sell to fleets.

  • F-150 sales – 19.1% fleet
  • Sierra 1500/Silverado 1500 sales – 11.5% fleet
  • Ram 1500 – 12.3% fleet
  • Tundra – 4.2% fleet
  • Titan – 16.5% fleet

These numbers show that Ford is the king of fleet sales, and that Toyota doesn’t depend on fleet transactions nearly as much as the rest of the truck manufacturers listed.

Why does this matter? Because fleet sales should never be compared to retail sales, as a fleet buyer has very little in common with a retail buyer (more on that below). Yet despite this inequality between a fleet buyer and a retail buyer, Ford, GM, and Ram-Fiat are never shy about quoting total sales numbers (which include fleet) and then using these numbers to brag about their “increased share.”

Specifically, if we look at retail numbers only, Toyota’s share of the retail half-ton truck market is about 9.5%, and that number is only going to grow as the 2014 model hits the street.

Tundra Sales Poised to Grow

Whenever a new model hits the ground, sales improve. Both Toyota and GM are bringing new trucks to the market this year, so they should both see growth from the numbers below (graphic borrowed from PickupTrucks.com).

2012 Half-ton sales - RETAIL only

2012 Half-ton sales – RETAIL only. Image from PickupTrucks.com (click to see the original)

Ram, on the other hand, is on the wrong side of the new model launch curve. Instead of selling the hell out of their new truck with lots of new features, they’re spinning their wheels trying to overcome production issues (including workers sabotaging new trucks, if you can believe it). Ram still hasn’t delivered trucks with the new Pentastar V6 (at least not in volume), their air suspension system isn’t available yet, etc.

If you launch a new truck but can’t get it to market before GM and Toyota launch their new trucks, than you’ve squandered your opportunity. Therefore, I don’t see Ram sales growing in 2013 at a rate any better than the rest of the industry. In fact, we may see them underachieve (which, incidentally, is what the early figures are showing, as Ram sales are only up 8% compared to 20% for the rest of the industry).

Then we have GMC. The sales gap between the GMC and the Tundra is very close, and the Tundra is 2-3 good sales months away from tying GMC sales. That would be historic (only, admittedly, sales figures really don’t matter, so this is all about bragging rights).

My Soapbox – Why Fleet Sales Can’t Be Compared to Retail Sales

Fleet buyers care about one thing: cost. How much does the truck cost today, how much will it cost tomorrow, etc. When fleet purchasers evaluate pickups, they look at a handful of costs and concerns:

  1. Total up-front cost
  2. Long-term cost
  3. Resale value
  4. Cash flow

As I wrote a couple of years ago, the math works out in such a way that it’s really the total up-front cost that drives fleet sales, as operating costs are roughly equivalent from one model to the next, and resale value isn’t really important to buyers who drive their trucks into the ground.

Good commercial financing (like the programs offered by Ford Motor Credit) can also help promote fleet sales, as they can reduce the cash flow hit that business must take when they invest in new equipment.

The point? When you hear a Ford or GM fan tell you about how many trucks their favorite company sells, you can explain that a big chunk of those sales are the cheapest trucks on the planet, and that anyone can get that fleet business…they just have to be cheap enough.

Kudos to Ford, GM, and Ram-Fiat for making their trucks so cheaply.

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  1. Mickey says:

    I agree with resale isn’t on the company minds. When they are done using that truck the truck goes to auction and they look at it as cash back but don’t expect alot out of it. They look at how much it was used and in the company mind they jusitfy what they got/used. That’s why they go the cheapest route in buying a truck. They know the people that use it won’t care about the vehicle. They just hope someone would. If someone did then the company does benefit from it in two ways. Better resale or they keep it longer. Company has to look at it what is it going to cost them. The mighty dollar is what we greedy people think about and how can we get on forbes list.

  2. mk says:

    My .02 cents is GMC and Chevy, although separate divisions, are still considered all in one GM. Therefore, GM is king over Ford and has been for years. About 10 or so more years ago before they axed Saturn and Pontiac and Olds, I heard rumors that GMC was going to get the ax first over those 3 divisions but that never came true. I still don’t see the need for GMC since same truck as Chevy basically we all know that so why didn’t GMC go away is beyond me since I thought Pontiac was for sure to stay over GMC. I thought wrong.

    Toyota may overcome GMC in numbers in 1-2 years maybe but really don’t care about that to be honest. What are the number of sales without fleet sales included?

    • MK,

      Those are the retail numbers (no fleet) in the graphic. I also agree it seems wasteful to have both GMC and Chevy. Although, apparently, that is how GM competes against all the trim lines of say Ford. GM views the GMC as a more step up in luxury versus Chevy.

      -Tim

  3. Larry says:

    This is kind of a dumb thread. Toyota does not even make a truck like the Ram 1500 tradesman or the F150 XL. These are bare bones work trucks. Try to get a Tundra without electric windows and rubber floor instead of carpet.

    Construction companies, oil drilling companies, etc don’t buy Tundra trucks. Tundra is being sold to mostly the weekend warrior. That’s all fine and it should not figure into the total market issue. The day toyota starts making low end trucks for the fleet market then the numbers might be relevant.

    • Larry – We’re sort of saying the same thing, except my point is that Toyota does a better job of selling consumers on features and capabilities than GMC…or it looks like they will be shortly.

  4. tonyspin says:

    I am not so sure the Tundra will get the bounce in sales Toyota is hoping for with the new truck. It is really just a 2nd gen with new front fenders and a new bed, and most truck buyers are savvy enough to realize that. To compete with GM and Ford, they must also offer more cab/bed configurations, a HD model, and a diesel engine choice.

    • Tonyspin,

      You are right in thinking that most “truck” guys who have owned trucks for years will see it for what it is. However, the new truck buyers will see it as a great competitor of the other brands due to the new interior. Toyota HAD to improve the interior while it didn’t really need to improve the exterior that much.

      What I find interesting is that Toyota’s Sweers didn’t seem to be concerned at all about the engine. In fact, you could say he was very, very pleased with it. And with just a few exceptions on the forums, most every customer seems pleased. It seems to me that if Toyota could just work on improving their fuel economy (not bloat it like the other guys), they would keep up just fine.

      However, I think Chrysler/GM are going to force Toyota to develop a diesel engine and possibly an HD version. If that happens, Toyota will have to significantly change their plan/mission of being the top 1/2 ton truck. They will instead have to develop a true work truck – something Tundra pickups are not.

      -Tim

      • ToyRulz says:

        Hi Tim,

        Its “slight” but I bet its enough for most real Toyota Tundra fans to know the oppurtunity and voices of many were not wasted…

        The engines are reported to be “recalibrated” with retuned exhaust that will provide slight improvements to fuel economy and sound throatier during acceleration.

        http://www.nydailynews.com/aut.....-1.1283407

        Also read a review on PUTC of Rams V6 with dial-a-gear 8speed – good empty – but down to 11s when towing a small load. My point, there is not much in it – full size tow/haul performance is inversely proportional to fuel economy. Till customers accept low riding wing-shaped aero-trucks made of aluminum and titanium – you will not see a big improvement – even the V8-alternative Ecoboost struggles to have significant gains and trades much towing for it.

        I will take Toyata’s honest “slight” improvement that maintains reliable towing performance over bloated EPA stickers from fragile technologies that combine to give an edge on paper and have you pay the dealer later for repairs and a surprise at the pumps.

        • ToyRulz,

          That article is basically the same news that we reported. Although, it does talk about the change in the CrewMax seat. I missed that when I was there for the unveil.

          Sweers also spoke to a change in the gear box. We will have to just wait to see all the new numbers/information in September.

          You last point, “I will take Toyata’s honest “slight” improvement that maintains reliable towing performance over bloated EPA stickers …” is precisely what Toyota is banking on.

          -Tim

  5. mk says:

    agree, tundra needs more bed/cab configs and improve mpg since they are in last place of the big 3 in both categories now. Engine and tranny only need improving on fuel economy is all they needed to do and they even blew that one as well. I cannot say whether the interior or exterior is better until they come out and none of us can say better or worse as of now until it comes out. Looks are not everything, but fit and finish are a lot more important, at least to me.

    Heck, even GM I heard is now considering a diesel in a small fuel efficient car and yet no diesel in a 1/2 ton truck or make a 3/4 ton tundra or crewmax 6 1/2′ bed as a simple option to mfg. I see hardly any toyota sales increases with this new model 2014 re-design.

    • MK,

      Chevy has launched the Cruze in a small diesel. Should be for sale by the end of the year. I haven’t heard anything on pricing or MPG estimates.

      -Tim

  6. GoI3ig says:

    One of the bigger “fleet” customers in my neck of the woods is government. Between the federal, state, and local governments, they account for a lot of trucks.

    I’ve never seen them buy anything foreign as I suppose it would be politically incorrect.

    I drive a “fleet” Ford Expedition at work, and a Toyota in my personal life. It gives me a nice side by side comparison. I know which one is in the shop more.

  7. tonyspin says:

    I have said this before but I wish Toyota had spent the development money for the new truck differently. Instead of spending some of the budget developing the “1794”, I would rather have seen them use the money to make the truck more capable. Some improvements I would like to see are, larger fuel tank, 8 speed tranny, true limited slip or a locker, and more cab/bed configurations. It goes without saying that if they want to compete with the big boys, they have to offer, a HD version and a diesel.

    • Tony,

      I wonder what happens to your argument if the 1794 sells fairly well? I mean it is probably loaded with profit for Toyota and will have them competing better with the King Ranch type trucks.

      There are two sides to the truck debate. Those that want the truck for a truck and those who want the truck as an upgraded mini-van. So far, the market is moving to the latter.

      -Tim

      • GoI3ig says:

        Right you are sir. Toyota tried to cater to the “work” crowd with over sized knobs and door handles. I remember the sales pitch…you can do it all with gloves on.

        After all was said in done, the interior was seen as a Tundra weak point.

      • ToyRulz says:

        Tim – that is exactly what Toyotya is banking on ;)

        They are after the light duty personal use customers.

        People keep saying Toyota needs an HD or deisel or 3/4-ton to compete against the 3 for market share – and if they did it (yes it would rock) but then it will be they should do commercial vans, 1-tons duallies and so forth.

        The time is not right – they don’t want to do it and it flop – the effort must make business sense with sustainable profits. You think they have it tough selling Tundra in Ford and GMs back yard – imagine 1-tons. May be better to tap that market with Hino.

        From the 2014 release – it is obvious to me that Toyota is not currently interested in this market (yet).

        They want us to know they can do it and that they will do it well if the market is there – but it isn’t yet. You want the big trucks – buy lots of Tundras to pay for it and build the market.

        I think the cost of stripper fleet trucks is not that different than consumer models – economies of scale apply and Toyota does not have the volume to lower production costs much, they do not want to cut corners and ruin their rep, and why cut profits just to sell more at cost.

        Toyota probably could have bought their way into this market with Ram and didn’t – why didn’t they and why did Fiat… I’m surprised Nissan didn’t go for it as I have considered Nissan the Japanese Dodge for years and they needed new Titan.

        • Here is something interesting for people to think about. I just read that estimates are the typical profits from a full-size 1/2 ton truck sale are $7-10k for the automaker and $3-5k for a compact truck. I would guess then a stripped down “fleet” truck probably is $2-4k. That isn’t a lot of profit nor justification for Toyota to invest in a new automotive plant that might cost $1-2 billion.

          -Tim

      • Tonyspin says:

        I agree, they will make money on that truck, and the Limiteds and Platinums too.

  8. mk says:

    I wonder how toyota or anyone can make 7-10K profit per 1/2 ton truck, especially when I always buy them at dealer invoice pricing? Is there that much difference in mfg. cost to make vs. dealer invoice pricing? I would think not but I do not know that end of it at all.

    One thing I know for sure is that the pricing of these vehicles, namely our tundra, is going up nearly 3% per year and if this trend continues before long in today’s crappy economy, NO ONE, well a lot of us anyways, are not even making 3% raise increases on our jobs and to have all of our raises and then some go up and up year after year to pay for a 35K tundra soon to be 40K then 45K, etc. etc. is getting way overpriced not many will be buying into the marketplace. I spent 32K on my 2012 tundra and was 27K in 2007 identical tundra. I thought I would never spend over 30K EVER on any new vehicle, that time has come much sooner than I wanted it to.

    • ToyRulz says:

      I bought a new 2003 Corolla in fall of 2002 – when trying to get best deal possible – I requested quotes from several dealerships and got nearly the same price from all (only difference was the dealer added stuff like undercoating etc…

      I then ended up at my Local dealer where my salesman said there is no margin to drop price on Corolla. Its MSRP was set by Toyota to be competitve with Civic and that leaves only about $500 per unit profit for the dealership’s overhead – they are not worth selling for less (it would cost them money). Honda dealer said similar – even said that is why Honda does not do stainless exhaust like Toyota – so they lower their manufacture cost a bit for initial profit and see you back just past waranty to replace it so dealer makes a bit too.

      Raw materials are cheap and there are nearly the same number of parts and labour in making Corolla and Camry or Tacoma and Tundra – profits come from happy customers moving up.

      Tundra makes money and gives Toyloyals something to move up to rather than jump ship to competitor. These peope moving up are not all of a sudden realizing that lanscape materials haul better in a truck than their Camrys – Tundra is meant to be best personal use truck – or a premium work truck within its light duty specifiacations.

      It is not fair to say Tundra is less capable than an HD or 250 or 2500… If you need more than Tundra spec – it is not “personal use” (as it relates to 95% of the people) and you best be giving competitor a minimum profit so they can say they sold more F-Series. Toyota is in business to make money – not to hurt other companies (that is just a perk of making money from their customers).

    • mk – I too feel that these trucks – and new vehicles in general – are too damned expensive. However, there are a lot of reasons for these increases…additional safety, fuel economy, and emissions regs, increased costs in commodities, more consumer demand for comfort/luxury features, etc. I’m not defending these price increases mind you, just pointing out that some of it is a function of the market and the rules.

      As for profit per vehicle, the exact amount of profit companies like Ford and Toyota make on a specific model is closely guarded. However, we know from financial news reports, conversations with people in the industry, etc. that:

      1. Most automakers make a paltry profit on small cars – as little as a few hundred dollars, as much as a couple thousand dollars. That’s astonishing when you consider the smallest cars are $15-$20k.

      2. Materials and labor are a small portion of a vehicle’s expense…probably no more than 30%, and often times less. This means that the majority of the money you pay for a car goes to overhead (specifically, engineering and design and facilities).

      3. Generally speaking, it takes just as much time and money to build a Corolla as it does to build a Tundra (with some vehicles, the Tundra is actually EASIER to build than smaller cars that cost less).

      SO what does that all mean? It probably costs Toyota (or Ford or GM or whomever) the same amount of money to build a new truck as it does to build a new economy car, at least if you look at labor and materials. However, by the time you add on the cost of developing new engines and transmissions, designing steel safety cages, building and maintaining billion dollar factories, etc., the cost per vehicle fluctuates.

      Since body-on-frame trucks are relatively simple to design and construct, and since the engine families used in these vehicles tend to be shared across multiple platforms, they’re actually quite a bit more “profitable” than a small car.

      However, this whole notion of profit per vehicle is an accounting trick…if you look at an automaker’s NET profits after they pay for engineers, factories and factory workers, etc., the margins are small – Toyota had one of the most profitable years in history in 2006(?), and their margin wasn’t much better than 6%.

      SO, to answer your question, Toyota (and Ford and GM etc.) DO make $7 – $10k per truck they sell, but only because they can amoritize a lot of R&D costs across multiple models.

      Put another way, the $10k Toyota makes on a Tundra is used to make Tacomas, 4Runners, Sequoias, and a handful of Lexus products a little less expensive…

  9. Tom says:

    Don’t get your hopes up too high. You got a new commercial of a Tundra towing a stripped out shuttle on a nearly flat bridge for a few hundred feet, and a new interior comming (finally)Same old driveline which was good in the past, but is old news now. What, now the max torque is 200 rpm lower on 5.7s? Still sucks gas.

    New ugly grille? Does the thing still bounce like the (then new) 2010 model I test drove 65 miles? It wouldn’t matter how great a truck it is, if it bounces down the road empty. Gauges didn’t tell me much in the way of exact numbers, kinda like an old throwback truck.

    No thanks, I bought another truck that actually rides smooth.

    You guys can keep saying EPA numbers are inflated, but last time they did a gas mileage comparo on PT.com, Tundra was last. So I guess we can say “Tundra; The official truck for those that don’t gave a crap about fuel cost, or ride”

    Keep dreaming.

  10. Mickey says:

    Tom that’s nice you drove a tundra 65 miles and it bounces. Do you really understand how this truck was built? Also why are you concerned about mpg’s when you have a truck? Go get a car for your ride and mpg’s. You’re pissed because your truck didn’t get to pull the shuttle. Next time ask your manufacturer to get involved with the public.

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