Click here for more 2006 NAIAS coverage!

Heavy Duty Diesel Rumors in Detroit
By: Mike Levine Posted: 01-10-06 00:30 ET
© 2006

Page: [1]

Toyota is expected to introduce its all new Tundra full size pickup at next month's Chicago Auto Show, and the anticipation is strong for the reveal of Toyota's first true, full-size pickup.

But Detroit truck execs are already looking past this event to Toyota's next move in the segment - the introduction of a heavy duty truck.

Ford, GM, the Chrysler Group have much to be concerned about with news of Toyota entering this market segment because the Detroit Three stand to lose the most from entry into their last exclusive segment of the truck market.

Heavy duty trucks bring heavy duty profits and bragging rights to manufacturers, who are constantly one-upping each other in horsepower and torque to claim their pickup as the strongest and most capable on the road. That's because heavy duty buyers are more likely to buy based on capability than because of brand loyalty.

A new HD truck that offers measurable advantages over the other trucks can rapidly gain market share at the expense of the others. Witness the recent lesson of General Motors. GM moved the sales needle from less than 10% market share in newly sold HD trucks in 1999 to over 30% market share by 2002 after it replaced it's weak 6.5-liter diesel powerplant with the strong 6.6-liter Duramax. Almost all of this market share increase came from Dodge, the weakest player in the space with an engine/transmission combo that just doesn't measure up to superior Ford and GM diesel powertrains.

This is the business case that Toyota product planners must be betting will repeat itself. Build the right truck with the right engine, and buyers will quickly flock to your product, bringing dollars and bragging rights with them.

GM also proved that domestic HD buyers can quickly get over feeling squeamish about buying Japanese. The Duramax diesel is designed by Isuzu in Japan.

But if buying a Japanese brand HD pickup is a concern for some buyers, Toyota may well have found a way to combat this.

An industry source has told PUTC that Toyota is talking to Cummins, producer of the venerable I6 diesel found in the Dodge Ram Heavy Duty, about Cummins designing and producing an all new V8 diesel for use in a HD Tundra. This all new diesel would also feature a special device to quiet a diesel's vibrations and cackle to Toyota levels of refinement.

A second source added fire to this rumor by telling PUTC that DaimlerChrysler is working fast and furious to lock up Cummins as its exclusive diesel supplier, thereby shutting Toyota out of this engine option. Apparently Cummins has wiggle room in its current DCX contract to speak with other truck manufacturers.

Toyota has a deep enough talent pool internally that it could very well source a diesel in-house, but partnering with Cummins would offer the intangible benefits and goodwill that come along with Cummins' history and reputation, helping to speed adoption and foster heavy duty domestic Tundra sales.

Toyota isn't the only foreign truck maker looking to compete in the heavy duty segment. Nissan, is also watching closely and seems to be betting on Toyota making this move as a lead-in to its own HD ambitions.

Asked about Nissan's plans for a heavy duty Titan, Fred Standish,
Director of Nissan Corporate Communications, told PUTC that Nissan, "wants to be a player in every market segment (of the pickup market)."

"The dynamics of every segment have changed where foreign manufacturers have entered, from sedans to minivans. Product lifecycles have dropped. It used to be that you could keep a truck for five, six, seven, 10 years and not change it very much. That will change with (Japanese) manufacturers entering full size pickups," says Standish.

A third source at the show told PUTC that, like Toyota, Nissan is also speaking with Cummins about producing a diesel engine for its heavy duty entry.

Asked about this possibility, Standish had no comment, but when asked about the feasibility of Nissan building its own diesel in-house, Standish said, "internally, building a diesel would be difficult. That's something we'd likely source out."

Aside from Cummins, speculation leads us to only Caterpillar and John Deere as other possible US domestic diesel engine providers for a Japanese heavy duty pickup, but neither of those manufacturers has built an engine for this type of application. Ford has an apparent lock on Navistar's Power Stroke diesel.

Other speculation leads us to believe that if Cummins does ultimately build a diesel for Toyota and/or Nissan, that might force Dodge to seriously look at offering a Mercedes built diesel in the RAM HD, another move that would dramatically change the HD landscape. It would be awfully hard for a domestic buyer to purchase an HD pickup, other than the Ford Super Duty, that was 100% US designed and built if the Mercedes scenario become reality.

Domestic trucks with Japanese and possibly German engines. Japanese trucks built in the United States with rumors of American diesels. Domestic truck buyers are likely to find it very challenging to buy future heavy duty pickups based on anything other than the truck's bottom line cost, performance, and quality.

And for the record, when we asked Mark Amstock, Toyota's SUV and Truck Marketing Manager, about these rumors, Amstock was quick to respond, "No comment. The engineers don't tell me that kind of stuff."

Page: [1]