Ford Ranger: Automaker Mulls Demise of Small Truck Segment

If the Ford Ranger was a human being, he might be expecting a retirement banquet and that gold watch from the company president for work well done. But the Ranger is a vehicle made by Ford, so its drive out to pasture may take a while.

But all the signs are there.
Ford Motor Co. will close the St. Paul, Minnesota plant where the Ranger is assembled. Reason? Sales of the vehicle are down; only 92,420 Rangers, for example, were sold in 2006, down 59.1 percent since 2002.

And the category of compact pickups have been taking a hit. Industrywide, U.S. sales of these vehicles have dropped from about 800,000 in 2002 to about 611,000 in 2006. 2007 is not looking any better, either, with sales so far this year down 10.1 percent. The only model that seems to have gone against the grain is from teflon Toyota and its Tacoma pickup, with sales up 16.6 percent since 2004.

Pundits say that Ford has three alternatives. First is to simply can the Ranger. Arguments to support this decision include the fact that the Ranger is considered old and Ford can’t simply afford to continue to invest in something that continues to lose market share.

Second option is Ford to move the location in which it is made. The Ranger could be made in a plant in St. Louis which is currently building the Ford Explorer. But investments would be necessary and would that be practical? Finally, Ford could replace it with an import. Talk is that Ford could import a small truck like the Ford Courier from Brazil, the Ute from Australia, or the Mazda BT-50 constructed in Thailand.

But this particular alternative may be dead before arrival. The U.S. dollar is weak and there is a 25 percent tariff on imported pickups. So an import just may not be economically feasible.

As things stand now, the last Ranger will drive off the assembly line in late 2008.

Our take? The Tacoma shows there is still a demand for small pickups. But is it in Ford’s best interest, though, to pursue such a niche market. Both it and GM have announced they have withdrawn from the more lucrative mini-van segment to concentrate on crossovers. We can already see Ford CEO Mulally is going to have a tough call on the Ranger.