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April 19, 2017

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Can ubiquitous US pickup gain traction in China?

PICKUP trucks, those ubiquitous vehicles on US highways, are slowly making some inroads in China, as evidenced by the higher-end truck models that will be on display at the upcoming Shanghai Auto Show.

The pickup market in China is poised to take off very soon. Today, pickups account for only 2 percent of China vehicle sales, but that means there is great untapped opportunity in a vehicle market as large as this, said Peter Fleet, vice president of marketing, sales and service at Ford Asia-Pacific.

Pickups originated in the US. They are light-duty trucks with an enclosed cab and an open cargo area in the back, with low sides and a tailgate. In Australia, they are called utes, short for "utility," which was the original purpose of the design. Today in North America, pickups account for 18 percent of sales and are mostly used as passenger vehicles — some with very luxurious interiors and front exteriors styled like autos.

Will the concept sell in China? Global vehicle manufacturers think so. They are jockeying to gain a foothold for an expected surge in sales, figuring that those first off the rank will benefit from the biggest market shares. That is creating a lot of buzz at the auto show.

Despite small sales numbers, China is already the fourth-largest truck market in the world, with 14 percent growth last year. Carmakers see two positive signals for the pickup segment: changing consumer attitudes and eased government regulations.

“We see a significant opportunity with Chinese buyers who are increasingly looking for more capable, more refined and more stylish pickups,” said Mark Fields, president and chief executive officer of Ford.

Chinese customers have had exposure to pickup trucks through TV, film and the Internet. What they see is helping dispel the idea that the vehicles lack comfort and modern features.

The trend feeds off the popularity of SUVs, which sport some truck features, and by growing interest in the concept of a rugged, romantic outdoor lifestyle, according to a recent survey.

Sales expectations are helped by relaxed government policies on driving pickup trucks in China’s urban areas. Before 2016, they weren’t allowed in central business districts. Last year, the rule was eased on a trial basis in Hebei, Liaoning, Henan, Yunnan, Hubei and Xinjiang provinces.

Vehicle makers are hoping that restrictions on driving pickups will be eliminated entirely.

Ford will showcase its midsize Ranger pickup model and the more powerful F-150 Raptor at the show.

Ranger is Ford’s best-selling midsize pickup in Europe, South Africa and New Zealand. Ford announced that it will introduce the model in China next year.

The F-150 Raptor is a high-performance off-road truck and the best-selling pickup in the US. It enjoys a reputation as a “muscle car,” with the SuperCrew four-door model featuring the latest advanced technologies, including a military-grade, high-strength aluminum-alloy cab.

Ford has modified the F-150 Raptor to meet the China’s standards but said that hasn’t affected the vehicle’s hardware.

Nissan Motor Co is introducing its latest high-end pickup called the Navara at the auto show. The pickup is being marketed as a boon to small businesses that want to use the vehicles for work and play.

Many Chinese consumers remain a bit cautious about pickups. They aren’t familiar enough with this segment, said Yan Ying, an employee from a market research company.

“The price of a high-end pickup truck is too high,” said Rong Hao, an independent photographer.

“I have a budget of 300,000 yuan (US$43,578), and a high-end pickup costs around 500,000 yuan. I will buy a sports-utility vehicle instead.”

Rong also noted that it would be pointless to buy a vehicle that is currently prohibited from inner city driving.


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