A quick guide to the agreements that'll see the pickup market consolidate during the 2020s.
Car companies have been sharing development costs for years, so it’s hardly shocking to see them doing the same with pickups/utes.
For one, we’ve just seen Ford and Volkswagen announce the co-development of the next-generation Ranger and Amarok, due for market launch in 2022. Isuzu and Mazda are also sharing costs on the next D-Max/BT-50.
Similarly, the next Mitsubishi Triton platform will spawn the new-generation Nissan Navara, and potentially the next Mercedes-Benz X-Class and Renault Alaskan. The only difference here being that Renault-Nissan-Mitsubishi are part of a wider alliance, with many synergies like this.
Why is this consolidation (or to be cynical, hegemony) happening?
Brands today are faced with some unique challenges, perhaps the biggest of which is where to find enough money to develop electrified cars with driverless technologies that meet regulatory requirements and customer demands – more the former than the latter, I’d argue.
The best way to pump up your research and development funds are to cut costs elsewhere in the business, by co-developing products with other brands. Not only does this save R&D costs, but also adds economies of scale.
The balancing act is ensuring the end result, a product sharing a lot with another brand’s offering (maybe pure badge-engineering, maybe shared platforms, often a hybrid scenario), remains desirable and leaves space for the marketers to inspire or excite the punters. It’s a hard balance.
This is especially true in markets such as Thailand, Argentina and indeed Australia, where utes are status symbols and desirable vehicles rather than simply workhorses. They’re also top-sellers, so the consequences of getting the balance wrong can be high.
For instance, the Toyota HiLux and the Ranger were the top-two selling vehicles in the country last year, the Triton was seventh, and the D-Max, Holden Colorado and Navara occupied positions 15-17. Utes in general own about 20 per cent market share.
So, what’s the lay of the land?
Ford will build the next Amarok for Volkswagen from 2022
This week’s announcement between the two brands, which sold a combined 1.2 million light commercial vehicles worldwide in 2018, lays out the memorandum of understanding.
Ford will engineer and build ‘medium-sized pickups’ for both companies, expected to go to market in 2022. This means the 2022 Amarok will be a Ranger underneath. Ford will also provide the basis for the next Transporter (based on the Transit Custom), while VW will return the favour by producing a version of the smaller Caddy van for Ford, to replace the current Transit Connect.
“Volkswagen CEO Herbert Diess and Ford CEO Jim Hackett confirmed that the companies intend to develop commercial vans and medium-sized pickups for global markets beginning as early as 2022,” the announcement says.
“The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies. The companies estimate the commercial van and pickup cooperation will yield improved annual pre-tax operating results, starting in 2023.”
However, the two companies insist while “the alliance will enable the companies to share development costs, leverage their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies”, they will maintain ‘distinct brand characteristics’. Meaning they’ll look different outside and inside.
The other big question is where the products will be made. VW makes the Amarok in Argentina and Germany, Ford the Ranger in Thailand and the US. Clearly there’ll be some consolidation there.
The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee, the pair told media and shareholders. This committee will be led by Hackett and Diess and will include senior executives from both companies.
The 2020/21 Isuzu D-Max will spawn the next Mazda BT-50
In July 2016, the two companies announced a “basic agreement” expected to see Isuzu produce the next generation of Mazda utes, based on Isuzu’s pickup.
The agreement covered “next-generation pick-up truck collaboration, allowing Isuzu to enhance its product competitiveness and Mazda to strengthen its product line-up and maintain own-brand market coverage”.
“Isuzu will produce next-generation pick-up trucks for Mazda, based on Isuzu’s pick-up truck model,” the statement said.
This was around the same time Isuzu and General Motors axed its longstanding agreement to co-develop the Colorado and D-Max. Mazda, bereft of its former Ford partnership (which now makes sense), was a perfect replacement.
What you can expect is the new BT-50 to use an Isuzu platform and rugged truck engine, potentially with some Mazda design tweaks and its interior know-how serving as differentiators.
Isuzu is among the world’s biggest heavy-duty diesel producers, but its Thailand-based light commercial division (responsible for Isuzu D-Max and MU-X) will benefit from Mazda’s cash.
In turn, Mazda gets a readymade tough base for much less than the cost of developing a BT-50 successor alone — something with no viable business case anyway given a lack of demand in many key markets outside of Australia.
Australia is Isuzu’s biggest export market for the D-Max, while Mazda Australia was a key driver in getting its parent company in Hiroshima to negotiate the Isuzu supply deal.
Mitsubishi and Nissan to share platform, Renault and Mercedes-Benz plans less clear
This one is vaguer, but also more obvious.
Despite the arrest of former alliance mastermind and chief Carlos Ghosn for alleged financial trickery, or resulting from alleged intra-company power struggles (depending on your view), the Renault-Nissan-Mitsubishi alliance and cross-shareholding arrangement remains intact.
Thus it’s obvious the next Nissan Navara and Renault Alaskan (if the French brand bothers with another ute) will share a platform with the next Mitsubishi Triton. Developing one architecture and spinning off three top hats is much easier than doing it twice or three times over.
Moreover, while Mercedes-Benz may either not worry about a new X-Class (unlikely), or might in fact go it alone and do the job itself in-house (more likely), it could once again opt for help from the Alliance, with which it has its own complicated arrangement for shared product development.
Based on talks this writer had with Mitsubishi management in Thailand recently, it looks like Mitsubishi Motors (MMC) could take a lead role in developing the pickup/ute platform used across the Renault-Nissan-Mitsubishi Alliance.
We already know the trio will share an architecture in (potentially) different states of tune, wearing different designs and different cabins, but we now know MMC expects to be the Alliance member chosen to run the project.
In short, the member best suited to run a certain platform development will theoretically control the project, with financial and engineering/design assistance from its partners during the cycle. Each brand can focus on its bread-and-butter, and borrow tech to underpin the rest.
MMC chief operating officer, Trevor Mann, an ex-Nissan executive, was asked at the launch of the updated Triton if the unseen next-gen model would use next-generation Navara parts. Given MMC is the Alliance’s junior partner, this was the expected situation.
His response? “I think it's the other way around. It’s not a promise but if you look at the expertise we have…”
Jointly developing platforms means there’ll be more money to invest, meaning Mitsubishi will theoretically have the budget to make the next pickup architecture what it wants, instead of being constrained by costs. It cuts Alliance-wide R&D spend without hindering the product capability.
“Based on the expertise question, the company with the most expertise at a certain category would take the lead, which is why I intimated we would be the potential leader for frame [body-on-frame] platforms,” Mann added.
This is the wider strategy moving forward across the Alliance, the three-way Franco-Japanese cross-sharing arrangement designed to slash development costs by reducing unseen duplications, and save swathes of cash by upping production scale and purchasing power.
That said, Nissan has responded by saying ‘not so fast’.
"I'm aware of Mitsubishi said," Nissan’s chief product specialist Pedro de Anda said to us afterwards.
"[But] They are different brands with different customers. For Mitsubishi, the Triton is very important to them obviously. But these vehicles must be more than just different bonnets or different from fascia. Ideally all of the panels should be different, even the glasshouse can be different."
In other words, one platform and drivetrain, with different exterior, interiors and tech. Mitsubishi may take sole ownership of its novel Super Select 4WD system, for instance, while Nissan alone may offer coil rear springs rather than leafs.
Renault and Mercedes? Less clear, though one Mercedes engineer told me in Europe last year that the Nissan JV was a learning experience first and foremost. If the X-Class proves popular (no sure thing), MB might instead go it alone next time, as it did with the generation-two ML-Class SUV.
Holden Colorado and Toyota HiLux? They’ll probably go it alone
Expect the new Colorado to instead become more consistent in-house. By this we mean the next generation Thai-made version sold in Australia will likely look and feel much more similar to the macho US version sold as a Chevy, than the current pair do.
On the Toyota front, it’s hard to imagine the world’s top car maker will pair up with anyone on the new HiLux.
It may have joint-ventures with BMW (Supra and Z4), Subaru (86 and BRZ), Mazda (hybrids) and PSA (vans and city cars), showing it’s no stranger to partnerships, but we’d expect the new HiLux to be a Toyota through and through.