Pickup truck sales grow in Brazil, and Strada leads the market – 05/20/2023 – Market

By the end of the year, at least ten new pickup trucks will have reached the Brazilian market. There are from the compact Chevrolet Montana (from R$ 118.7 thousand) to the gigantic RAM 1500 Limited (R$ 530 thousand). Both have buckets designed for travel and leisure, not work.

This is the new market trend, driven by the constant search for profitability. Automakers have found customers interested in this type of vehicle both out of necessity and differentiation.

“The issue of profitability is observed more in medium pickups, where the added value of the product is much greater than in entry models”, says Milad Kalume, business development manager at Jato Dynamics. “It’s a strategy similar to that adopted with SUVs.”

The numbers show that the planning has worked. Around 330,000 pickups were sold throughout 2022, which made the segment reach a 17.7% share of the passenger car and light commercial vehicle market, according to Jato.

In the first quarter of 2023, this share reached 19.3% of total sales in the country, which is well above the global average for sales of this type of vehicle: 5.8%.

“The big increase [das vendas e da participação no Brasil] occurred between 2020 and 2021, which is due to the fact that pickups are less technological than other vehicles and, therefore, have suffered less from the lack of semiconductors”, says Kalume.

In addition to maintaining a more regular production pace in the midst of the Covid-19 pandemic, these utilities –especially diesel-powered ones– were in demand by agribusiness, which remained active. Rural producers have access to discounts for purchasing vehicles from different segments, in addition to having specific lines of credit.

Another modality is the system called barter, which are transactions based on the exchange of goods, without monetary intermediation. Toyota and Stellantis (which brings together the RAM, Fiat, Jeep, Citroën and Peugeot brands) launched this option in 2021, making it possible to exchange corn and soybeans for vehicles.

Mitsubishi joined the practice this year in seven states: Bahia, Goiás, Maranhão, Mato Grosso, Pará, Piauí and Tocantins. The Mit Barter program allows you to purchase models such as the L200 pickup with payment in grains. The utility costs from R$ 244,000 in the GL diesel version, exclusively for direct sales.

Automakers also take advantage of regional events to gain market share. Nissan, for example, offered the Frontier with great discounts during Agrishow 2023. The fair held earlier this month in Ribeirão Preto (inland São Paulo) even had off-road test tracks. The Japanese brand’s pickup was sold for BRL 200,000 in the SE version, a 25% discount. The list price is R$ 267.7 thousand.

The rise in pickup trucks is also due to the urban delivery segment, which has strengthened throughout the health crisis and stimulated demand for small-size options.

Between May and July 2020, the iCarros purchase and sale website, owned by Itaú bank, recorded a 62% increase in searches for pickup trucks compared to the same period in 2019. The most popular model was the Fiat Strada, whose new generation had only two months on the market.

In addition to the natural interest in novelty, there was a heating up of delivery as a reflection of social distancing.

Sales took off, and the model became the best-selling car in Brazil, a position it has held since 2021. The four-door double cabin version helped win over a new audience, which previously dreamed of having a compact SUV.

But if on the outside the size of the Strada brings the impression of being a superior segment car, inside the space is basically the same as the diminutive Fiat Mobi. The hatch lends a good part of its components to the utility vehicle.

It is at this point that profitability comes back to the agenda. The simplest version of the Strada with a double cabin costs R$ 112,000. The sound system is sold separately, but there is air conditioning, power steering and side airbags among the standard items. Its 1.3 flex engine has 109 hp of power.

The Mobi has a 1.0 flex engine (74 hp) and only has the front airbags required by law. The speakers are there, but the radio is also sold separately. For the rest, the standard item package is similar to that of the pickup truck, but the price is much lower: R$69,000, which means a difference of R$43,000.

With the lack of space in both, life is bad for those traveling in the back seat of either car. Still, it’s better to be in the hatchback, which has a steeper backrest.

This problem will be noticed in most comparisons between a conventional passenger car and its version with a bucket. But the ability to carry all the stuff in the back seems to convince the public to spend more, even if the dreamed trips with the world on their shoulders never happen.

To reconcile comfort and large volume for cargo, it is necessary to invest in medium and large pickup trucks. They are models over five meters long and not very suitable for cities – both due to their size and the higher level of emissions. In the countryside, however, they are objects of desire.

The most expensive novelty in the segment is the RAM 1500 Limited, launched this Thursday (18). Its BRL 530,000 includes luxuries such as a reclining, ventilated and heated rear seat. It’s a limousine item, but placed in an SUV that was born to pull boats and trailers across North America. The vocation justifies its 400 hp 5.7 V8 engine, whose thirst for gasoline is proportional to its size.

It is 5.92 m long, 2.09 m wide and 1.97 m high. When opening the doors, the footboard automatically lowers. It is a step to facilitate entry into the cabin, where you can see the other cars from above. Inside, there is a 12-inch screen for the multimedia center and electrical adjustments for the steering wheel and pedals.

In the eyes of the city, it is an unnecessary and inconvenient vehicle. But in Brazil, rich in agribusiness, there is a queue. The first batch of the RAM 1500 Limited, with 540 units, was sold in a few hours this Thursday.

Its main competitor, the Ford F-150 (R$ 480 thousand), went through the same situation. On February 14th, the first 250 units were sold in less than an hour. On the 16th, the second wave of 250 vehicles was sold in nine minutes.