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New Honda Pickup Not Yet a Threat to GM and Ford: Doron Levin

By Doron Levin

Jan. 27 (Bloomberg) -- Honda Motor Co. has been slow responding to conventional wisdom that says a major automaker operating in the U.S. must offer a pickup truck, the most profitable vehicle category.

Honda's new Ridgeline, the first pickup from this cautious automaker, goes on sale in March at about 1,000 Honda dealerships in the U.S., at prices ranging from $28,000 to $32,000, depending on equipment.

Yet Ridgeline isn't the sort of pickup that should upset Ford, General Motors and Dodge dealers -- not right away, at least. Those automakers well recall what havoc Honda's Accord sedan has wreaked on sedans like the Chevrolet Lumina and Dodge Stratus.

Ridgeline comes equipped with a V-6 engine only, not a V-8 as offered by Ford, GM and Chrysler Group. It's smaller than the Ford 150, Chevrolet Silverado and Dodge Ram models, the nation's most popular pickups. Those well-established, homegrown brutes are promoted relentlessly for their size, their ability to haul heavy loads and slog through mud and snow.

Who needs such rugged vehicles? Perhaps not most of the people who buy them. They are often driven for reasons of image, not for utility.

``We're not trying to be the Ford F150,'' said Gary Flint, Honda's chief engineer for the project. ``If we wanted to do that, we would have built something its size.''

Macho Out

Honda designers were aiming to give Ridgeline a refined, intelligent, comfortable feel, Flint said, with numerous features that may appeal to customers who realize they need a pickup's utility now and then and aren't into the macho thing.

The niftiest feature, an industry first, is a lockable trunk under the pickup's bed, easily reachable from the tailgate, allowing owners to secure luggage, valuables and other gear in a weather-tight enclosure. That space has always existed; Honda is the first automaker to figure out how to use it.

Engineers maintain that the new smaller-size vehicle, which operates on a four-wheel-drive system, can haul loads of up to 1,500 pounds or tow a 5,000-pound trailer, enough to carry a 22- foot boat.

Tokyo, Japan-based Honda built Ridgeline as part of its slow, deliberate, and inexorable strategy of introducing multipurpose vehicles like the Odyssey minivan, CRV small sport utility, Pilot large sport utility and Element, also a small, quirky-looking appearing sport utility.

Long-term Threat

Last year, Ford sold 939,511 large pickups, General Motors sold 894,524 and DaimlerChrysler AG sold 426,289. Add to those figures the sales of new large pickups from Nissan Motor Corp. and Toyota Corp., plus midsize and compact models, and the market for all types grew to about 3.2 million in the U.S. last year, an increase of 3.1 percent from 2003.

Honda aims to sell a mere 50,000 Ridgelines, not enough to dent the U.S. pickup market significantly. That's fortunate for Detroit, since Ford, GM and DaimlerChrysler earn a disproportionate chunk of their operating profits from large pickups.

The longer-term danger to makers of large pickups, however, is subtler. ``We want to change the way people think these vehicles should feel and should handle, as well as their usefulness,'' said Andy Boyd, a Honda spokesman.

Honda research shows that 18 percent of its owners in the U.S. also own a pickup, and the automaker thinks 50,000 to 60,000 owners of Honda vehicles buy pickups every year. To the extent Honda style and brand appeal to this group, the company sees an opportunity to intercept buyers before they consider, say, a Toyota Tacoma or Dodge Dakota pickup.

Lutz Praises Ridgeline

The more telling issue could be widespread consumer recognition that pickups can be more refined and useful, and feel more like sedans when they are driven. Such recognition will force some automakers to spend more quickly and more heavily for redesigns and more sophisticated engineering.

At the North American International Auto Show in Detroit earlier this month, Bob Lutz, GM's vice chairman, brought a large contingent to inspect Ridgeline. He told Flint: It's the best ``packaging'' of any vehicle he has ever seen, meaning the best layout and use of space.

Lutz praises competitors sparingly, especially those from abroad.

If the Ridgeline does prove to be a game-changer, it's likely that Honda will need more production capacity in North America, which is already beginning to approach capacity. In December the company said it should reach capacity of 1.4 million vehicles by 2006.

A big splash by Ridgeline also may spur a new crop of pickups even more quickly from the competition, models with more clever use of space, a friendlier feel and somewhat smaller engines.

To contact the writer of this column: Doron Levin in Southfield, Michigan at dlevin5@bloomberg.net.

Last Updated: January 27, 2005 00:21 EST