As trade, BMW goes in, pickup drives out

Well-heeled discover luxury trucks

DALLAS -- Art gallery owner Tim Wiford didn't really want another Lexus.

So he bought a Ford pickup -- a leather-studded $60,000 F-150 with massaging seats and a cruise-control system that will apply the brakes if needed.

"One of the reasons I bought it is it will also parallel park itself," said Wiford, 49.

Wiford, who has owned pickups in the past, joined a growing number of big-city white-collar consumers who are stepping up -- literally -- into luxury pickups.

Last year, 25 percent of the F-series trucks Ford sold cost $50,000 or more, making them the top-selling luxury vehicles in the U.S., according to TrueCar.com.

Some buyers trade in flashy Mercedes-Benz, BMW and Audi sedans for polished four-wheel-drive pickups that can bounce down dirt roads at a weekend ranch towing hay and horses.

The website estimates that Ford earned $10.8 billion from its sales of high-end haulers -- 33.5 percent of the company's total pickup revenue.

The fast-growing Ram pickup was second on TrueCar's list, and both trucks far outpaced the third-place Mercedes-Benz E-Class and sixth-place BMW 5-series sedans.

"In 2009, only 1 percent of the pickups we sold cost more than $50,000," said Bob Hegbloom, president and chief executive officer of the Ram brand. "That number is now at 16 percent and growing."

Indeed, luxury pickups accounted for four of the 10 top-selling vehicles over $50,000 in the U.S.

"Why? We can do anything or go anywhere in one, and you can't do that with a 3-series BMW," said Eric Lyman, vice president of industry insight at TrueCar.

Doug Scott, the truck-group marketing manager at Ford Motor Co., said the company "doesn't know where the ceiling is with these vehicles."

"We've come up with Platinum and King Ranch and Limited models, and people still want more," he said.

Ford said it introduced its first high-end pickup in 1999 with the Harley-Davidson F-150.

Virtually all pickup manufacturers have them now and are considering more -- with good reason.

Luxury pickups accounted for 15 percent to 33 percent of most manufacturers' truck revenue last year, TrueCar said, and truck sales keep the Detroit Three rolling.

When Ford introduced the high-end King Ranch model in 2001, it appealed mostly to wealthy ranchers, construction company owners and others with blue-collar roots.

But the current group of high-end pickups is attracting a new owner -- urbanites with six-figure incomes, many of whom have never owned a pickup, dealers say.

"We're doing appraisals on trades we had never seen before at our dealership -- Mercedes-Benzes and Audis," said Jeff Enright, managing partner of Park Cities Ford and Park Cities Lincoln in Dallas.

Not only have pickups become increasingly refined -- Ford's new F-150 has a lighter aluminum body and the Ram a carlike coil-spring suspension -- but they can also match most features in German luxury sedans.

The F-150 Platinum model, for example, has LED headlamps, blind-spot monitoring, active park assist and a 360-degree camera system -- just like a 7-series BMW sedan.

"These customers were sitting in a valet line somewhere, and a guy drives in in a new F-150," said Brian Huth, general manager of Five Star Ford in Plano. "The running board pops out automatically and they notice the panoramic sunroof. Then they look into it and find massaging seats and all this technology."

Moreover, luxury pickups can haul and tow more weight than a high-end car, typically have much better resale value and often cost considerably less.

For the last 10 years, Wiford, the art gallery owner, had driven a Lexus GX470 SUV. He decided to look at a pickup when it was time to trade the Lexus. Like many business owners, he frequently uses his vehicle as a mobile office, sometimes delivering art to patrons as well.

"I hadn't set out to buy a $60,000 pickup," Wiford said. "I didn't even know about most of its features. But my wife and kids loved it. And what really gave us permission to get it was it was just as luxurious as a Lexus but more practical."

Before the 2007 recession pounded truck sales, automakers sold a record 2.5 million pickups in 2004 and again in 2005.

Though sales are pushing toward 2 million again, automakers' revenue and profit from trucks today may be higher than the peak 10 years ago -- partly because of luxury pickups.

"I haven't done the math," Ford's Scott said. "But I would say there are more total dollars being spent on trucks now than in '04 and '05."

General Motors would probably agree.

The GMC Sierra Denali -- a luxury pickup introduced in 2001 -- accounts for about 20 percent of GMC's light-duty pickup sales and nearly 50 percent of heavy-duty Sierras.

"It's a family vehicle, a work vehicle and also a vehicle you can take on vacation," said Stuart Pierce, marketing manager for the GMC Sierra. "People are willing to spend more on them because they can do so much."

Hegbloom, of Ram, which was the fastest-growing pickup in the truck segment last year, said he is always looking for amenities to add to models such as the Laramie Longhorn and Laramie Limited.

"When I go to car shows, I'll be over checking out Audis and Mercedes-Benzes and even Bentleys," he said. "That was where I first saw real wood in an interior, and we have real wood now in some models of our trucks."

Despite the frills that adorn some high-end pickups, TrueCar's Lyman says the trucks are still tough.

"I can get luxury features, but if I want to go to Home Depot or tow one of my toys on the weekend, I can do this and still have prestige," he said. "There's refinement, but you still have all this capability."

That versatility appeals to affluent customers, said Enright, the Ford dealer in Dallas.

"They want it all and they don't want to sacrifice anything they've gotten accustomed to," he said. "The first Platinum we sold this year was to a gentleman who traded a luxury sedan so he could be the first at his country club to have one of the trucks."

Business on 07/03/2015

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