DETROIT -- Skeptics of General Motors' decision to revive its smaller pickups say GM is headed down a dead-end road: Buyers simply prefer to pay a bit more and get a bigger truck, the thinking goes.
But an Automotive News review of more than a decade of pricing, inventory and sales data shows that market dynamics have shifted in the years since compact pickups (now commonly called mid-sized) fell out of favor. The pricing delta between the smaller trucks and their bigger showroom siblings has widened considerably in recent years, creating more breathing room for mid-sized offerings priced from $20,000 to the low $30,000s.
The data suggest that GM's contrarian move to re-enter the segment this fall with the new Chevrolet Colorado and GMC Canyon comes at an opportune time.
The move is still a gamble -- one that GM's main truck rivals see no reason to take for now -- given the epic collapse of the smaller-pickup market during the past 15 years.
Smaller trucks such as the Ford Ranger and Chevy S-10 were the rage in the 1990s, outselling full-sized pickups in some years. Then, steep discounts on the bigger trucks, lubricated by overproduction, shortened the pricing ladder between the two segments. Encouraged by cheap gasoline prices, buyers opted for more truck.
As a result, U.S. sales of compact pickups shriveled to just 227,111 trucks last year, from more than 1 million in 2000, according to the Automotive News Data Center.
But in recent years, restrained production and insatiable demand for content and features on full-sized pickups have tamed discounts and pushed prices to gaudy highs. Net prices -- average transaction prices that factor in incentives such as lease subsidies and cheap financing -- hit a record $37,568 in the first half of the year, Edmunds data prepared for Automotive News show.
From 2011 through the first half of 2014, net prices on full-sized pickups were 43 percent higher on average than on mid-sized trucks. That's a sizable jump from the nine-year period from 2002 to 2010, when they were 34 percent higher on average. The gap could grow in coming years as Ford leads what is likely a broader transition to more-expensive aluminum bodies to improve fuel economy. Ford is raising prices for its 2015 aluminum F-150 pickup by as much as $3,615.
"We've seen [full-sized] truck prices rise so much in recent years, it does leave a void in the market for smaller trucks with decent content and amenities," Edmunds senior analyst Jessica Caldwell says. "The timing is as good as it's been in at least a decade."