Mercedes-Benz let it rip today, announcing it plans to make its first-ever pickup truck. All they would’ve had to do was airbrush Kim Kardashian into the artist’s conception of the luxury hauler to break the Internet once and for all.
Some American pickup buyers – famously flocking to dealerships these days for the privilege of writing $50,000-plus checks for tricked-out versions of “everyday” Ford Motor and General Motors pickups – may be salivating at the prospect of a true luxury alternative, but I’d say the emergency brake is still engaged on this deal. Beyond the fact the company says the truck is intended for non-U.S. markets and won’t even see the light of day until the end of the decade, there are several good reasons why Mercedes-Benz isn’t likely to try cracking the code for the U.S. pickup market anytime soon:
Artist rendering of planned Mercedes-Benz midsize pickup. Courtesy Daimler AG
1. The pickup Mercedes-Benz announced is a midsize model – and midsizers are a questionable taste here
Yes, GM just introduced new Chevrolet Colorado and GMC Canyon midsize pickups and sales have been comparatively brisk; GM also launched those models amid considerable doubt from industry analysts and rival auto companies that U.S. buyers really want midsize pickups in any kind of significant numbers. Ford stopped selling the midsize Ranger in 2011, as did the then-Chrysler Corporation with its midsize Dodge Dakota.
Why? Pickup buyers migrated to the increased room and capability of fullsize pickups. The Detroit automakers effectively encouraged the shift with pricing and fuel-efficiency upgrades for the larger pickups that left scanty rationale for buying a midsizer.
Until GM’s relaunch of its midsizers late last year, Toyota Motor and Nissan Motor were the only two players and they combined to sell 230,000 units. Ford alone sold more than three times as many F-Series pickups last year.
Even more to the point, a primary purchase consideration for midsize pickup buyers long has been believed to be the quest for a lower sticker price. A luxury Mercedes-Benz pickup would seem to fly in the face of that motivation, no?
2. The “luxury pickup” concept doesn’t work, anyway
Ask Lincoln with its Blackwood and Mark LT, models which combined for roughly about 40,000 sales in seven or eight sporadic years in showrooms in the 2000s. The Blackwood remains a textbook example of marketing and product planning rushing to fill a perceived opportunity and failing miserably – at least partly because that opportunity wasn’t quite real. General Motors learned the same lesson with its oddball Cadillac pickup models.
It all gets a little weird when you slap a luxury badge on something that has a history as a “macho” work vehicle. Yes, somewhere between what they used to be and the role they now play in American households, pickups have gone “upscale” enough that $50,000 stickers barely raise an eyebrow and $60,000 prices are possible. But throw a luxury name into the mix and that seems to be the tipping point that makes that same truck “faux.” It’s taking The Duke and squeezing him into designer jeans.
3. The “Chicken Tax” remains in effect
A holdover from an esoteric 1960’s trade squabble with Europe, any company seeking to import a pickup truck to the U.S. is faced with a 25-percent tariff. As your economics teacher insisted, any business that has to sell a product for 25 percent more than its competitors is, ah, at a bit of a disadvantage.
The chicken tax has been a big reason the U.S.-based automakers largely have frolicked in a sandbox free of competitive rivals for nearly a half-century. I say “nearly,” because Nissan and Toyota circumvented the chicken tax by building their own fullsize pickups in manufacturing plants established on U.S. soil.
The strategy defused the chicken tax but has done little to relax the stranglehold Ford, GM and now Fiat Chrysler Automobiles (which owns the Ram brand) continue to exert on the pickup market. That, too, is a reality with which Mercedes-Benz would have to deal if it eventually tilts its pickup ambitions towards America.
Now, a few quick rejoinders to the above arguments:
1. Mercedes-Benz said the future pickup truck will be based on a structure borrowed from its commercial-van engineering
That could markedly reduce the company’s initial development costs – in turn potentially allowing a lot of latitude in the pickup’s pricing. A Mercedes-Benz pickup that didn’t come with a full-blown luxury price tag might be novel – while not being sized directly in competition with the Detroit automakers’ bread-and-butter fullsize pickups could combine with that “bargain luxury” pricing to create a unique market position conventional midsize pickups increasingly have lacked.
2. American buyers are paying a lot for pickups these days
Although the luxury-pickup concept has failed in the past, tastes change. And just maybe the past efforts failed because those pickups weren’t from the right luxury brand. Whatever the case, the evidence is readily available that new-truck buyers are willing to spend more than ever.
3. Building a pickup here wouldn't be a problem
Mercedes-Benz has a magnificent and seemingly ever-expanding assembly plant in Alabama that currently makes all manner of vehicles, from the C-class compact car to its large crossovers (Mercedes is changing the names of those and nobody can get the hang of the new monikers). Depending on some abstruse variables of manufacturing flexibility, it’s not inconceivable that the company could build a pickup at the Alabama assembly plant and the chicken tax could be damned.
If not Alabama, Mercedes-Benz announced earlier this month that it will build an all-new, $500-million commercial-vehicle assembly plant – remember, the company said it plans to base its pickup on a commercial-vehicle structure – in Charleston, South Carolina. That could be the kind of coincidence that turns into a pickup truck-producing deal if, after watching the U.S. market from the sidelines long enough, Mercedes-Benz determines the market indeed is ready for a luxury midsize pickup.
If current gasoline prices persist, by then we're all probably going to be driving pickups, anyway.
