Texas fairground set for pickup battles

DALLAS -- Ford has the F-150 King Ranch trim and a Dallas Cowboys special edition. Ram launched this past spring the 1500 Yellow Rose of Texas edition. And at the State Fair of Texas starting here this week, Nissan will unveil its Texas Titan.

It's not just a stereotype: Texans love their pickup trucks, buying about twice as many as Californians. Pickups account for nearly 19 percent of all vehicles purchased in Texas this year, compared with about 12 percent nationwide. And the state serves automakers as a testing ground and inspiration for new pickup concepts.

The intensity of that love affair is being put to the test, though, as the state's economy softens, dragged down by Houston's contracting energy sector and a strong dollar weighing on the state's sizable export sector. While Texas usually outpaces the nation economically, the first half of the year marked the first time this century that Texas added jobs more slowly than the U.S. as a whole, according to the Federal Reserve Bank of Dallas.

The effects show up in sales of light- and heavy-duty pickups, with new registrations down 3.7 percent statewide in 2015 and down 6.5 percent this year through July, according to data from IHS Markit, following three years of robust gains. The declines are steeper in the Houston area.

But the competition for buyers has only intensified, reflecting pockets of growth and opportunity amid the market's broader decline.

Steve McDowell, president of InfoNation Inc., which publishes the TexAuto Facts report, points to relative strength in Dallas' diversified economy, the Austin technology hub and the tourism economy that powers San Antonio.

"Pickups tend to track our construction activity more than just oil and gas," he said. Also, automaker incentives have been rising for several months. Low gasoline prices, while causing pain in the oil patch, are otherwise good for pickup sales.

Mitchell Dale, co-owner of McRee Ford in Dickinson, Texas, just south of Houston, said the retail sector is holding up better than fleet sales. Models such as the King Ranch and the Lariat "are top-of-the-line vehicles, and we sell a high mix of those," he said. "That market has not been impacted by the oil prices."

It was Texas that fueled the resurgence of the pickup market from the dog days of the Great Recession, when oil and construction jobs insulated the market from the nation's housing collapse and provided badly needed development dollars to the Detroit 3.

"The competition between these three companies in this segment is exceptionally intense because of the profitability per unit," said Tom Libby, manager of industry analysis for IHS Automotive. "You get exceptional product features and benefits to the consumer."

Meanwhile, Japanese automakers are trying to get a bigger piece of the market, with Toyota trying to crank out more Texas-built Tundras and Nissan introducing the second-generation full-size Titan, a decade after the previous one. Honda wants to make a splash with its redesigned midsize Ridgeline, though that segment has been a minor player in Texas.

The competition will go into overdrive starting this week, as the nearly monthlong state fair gets under way.

The event draws around 3 million visitors and every truckmaker that is anybody. It will showcase one of the most diverse ranges of trucks seen in a while, from Baja racers to ultraluxury five-seaters bathed in stitched leather.

"The luxury segment has grown dramatically in recent years, and it's an important part of the market," said Ray Huffines, whose family has been selling Chevrolet and Chrysler vehicles in the Dallas area for decades. For Texans, he said, high-end trucks are every bit a status symbol, not at all stigmatized for their working-class association.

Texas-inspired luxe trucks range from the original 2001 King Ranch (named for the sprawling ranch that covers an expanse of South Texas larger than Rhode Island) with saddlelike leather seats to the new Titan XD Platinum Reserve with open-pore wood trim and heated rear seats. The Nissan competes with the F-150 Limited, Ram 1500 Laramie Longhorn and GMC Sierra Denali, among others, all with prices that can run well into the $50,000s.

"Truckers have taken a stance and said, "I'm tired of the tin can. I want all of the luxury creature comforts and accoutrements of a luxury vehicle,'" said Fred Diaz, vice president of trucks and light commercial vehicles at Nissan North America. "And they have proven that they are willing to pay for it."

The Titan XD, Nissan's heavy-duty full-size truck, was named both the 2015 "Truck of Texas" by the Texas Auto Writers Association and the luxury truck of the year.

And for those who are serious about the market, a Texas-only model is a must. Nissan will unveil its take, the Texas Titan, at the fair. Diaz, who hails from San Antonio, said: "You almost can't overmarket Texas to Texans."

Ram's Yellow Rose comes in "stinger yellow" paint. Ford's King Ranch is sold nationwide, but its limited-edition Dallas Cowboys F-150 is available only at select Texas dealerships. The Chevy Silverado and the Tundra also have Texas trims.

"I think these special editions give people another reason to look at the truck," said Jessica Caldwell, senior analyst at Edmunds. "They may not get the Yellow Rose of Texas edition, but maybe they'll get something else."

Wherever they're sold, most of the trucks being shown off at the fair were inspired by Texas. That's because a flop in the Lone Star State also can damage a truck's credibility elsewhere.

"There's a sort of test," among the truckmakers, Libby said. "We have to make sure this appeals to the Texas market because they know pickups."