Mitsubishi, Toyota and Mazda Scramble to Fill Truck Gap

Date:2017-05-16 Source:autonews

 

Virtually every company -- from Japanese juggernaut Toyota to Mazda and Mitsubishi -- amplified plans to tilt lineups more toward light trucks and, in some cases, even introduce new nameplates in the segment.

 

"We have been increasing capacity for SUVs and pickups, and we will make full use of that to increase supply of light trucks," Toyota Executive Vice President Osamu Nagata pledged last week while announcing a 30 percent slide in operating profit in the fiscal year ended March 31.

 

Toyota and its Japanese rivals need to do so, and fast.

 

Japanese brands long have banked on their fuel-efficient small cars and family sedans to drive profits. But U.S. car sales tumbled 12 percent in the first four months of the year while light-truck sales climbed 4.4 percent.

 

Not having a bigger piece of the light-truck market was one reason every major Japanese automaker except Honda reported collapsing operating profit in the fiscal year ended March 31.

 

And Honda's profits increased only in comparison to miserable earnings the prior year when results were hammered by mammoth costs to cover recalls of faulty Takata airbag inflators.

 

Market shift

 

Massive foreign exchange losses took the biggest bite out of balance sheets in the just-ended fiscal year, as the Japanese yen appreciated against the dollar and other currencies.

 

But the cooling U.S. market also pinched Japan brands. They ramped up incentives to move slow-selling cars, which undercut profits. More light trucks — with their fatter margins and lower discounts — could have buoyed profits.

 

Some executives think the shift toward light trucks isn't ending anytime soon.

 

 

"I think SUV sales will continue growing even if gas prices rise," Mitsubishi CEO Osamu Masuko said, noting that customers prefer the higher seating and sense of safety in crossovers.

 

"The SUV segment is increasing its market share worldwide, and this is where we have long been strong," he said. "So, we will continue to make full use of this technology."

 

Honda said it is getting some traction from last year's rollout of the redesigned Ridgeline pickup and CR-V crossover. It is meanwhile dialing down output of the Accord sedan.

 

"We are working to increase the output of SUVs," Honda Executive Vice President Seiji Kuraishi said. "If we can put that on a steady track and sell SUVs, we believe we can make use of our strengths."

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