End of the Road for Honda's Ridgeline?

Some of the most profitable vehicles made over the last two decades are pickup trucks, with analysts saying that the $40,000 and up full-sized pickup truck is also the most profitable non-luxury vehicle sold by Detroit. But Honda (NYSE: HMC  ) , with a single light-duty truck model on the market, hasn't found the same traction as its domestic rivals.

Ford (NYSE: F  ) has sold 623,309 F-Series pickups so far in 2013, 20% more than it sold at the same point last year, representing a rate of some 60,000 trucks per month. At least one analyst estimates that Ford generates as much as 90% of its global automotive profits from its F-Series alone. Similarly, General Motors' (NYSE: GM  ) own profits hit a two-year high this past quarter on the strength of sales from its Chevy Silverado that's allowed it to increase pricing by some $400 million. Indeed, GM's average transaction price in the third quarter rose 3% sequentially as truck buyers have proved willing to pay nearly 7% more for the vehicles. 

Honda, however, hasn't been so fortunate. Through October the automaker has sold only 14,807 Ridgelines -- just about what Ford sells in a single week -- which explains why there's speculation the 2014 model may be the its last production run. According to Wards Auto, the compact pickup is taking a two-year leave of absence, a big change from the original rumor it would run through early 2016 and then see a new generation of truck emerge in 2017. 

2014 Honda Ridgeline. Source: Honda Motors

Of course, rumors about Honda's only truck have prematurely killed it off before. In 2010, after saying there would be a 2011 model but not announcing anything beyond that, industry experts suggested that it had reached the end of the road. The same thing happened the following year as well.

The truck was introduced in the U.S. in 2005 as an '06 model, and peaked the following year at more than 50,000 units sold. But sales went into a tailspin soon thereafter, and by 2012 had fallen below 10,000 units. While Ridgeline sales rebounded sharply last year and are up another 32% so far this year, it's apparent that it won't return to its glory days.

When the Ridgeline was introduced, it offered some innovative features, such as a unibody design commonly seen on models like Honda's Pilot, but unique to the traditional body-on-frame construction found in trucks. It also had a car-like independent rear suspension and a "dual-mode" tailgate allowing it to drop down like a pickup truck or swing out to the side like an SUV. It was definitely a different animal than GM's Chevy Colorado or Ford's Ranger, models that were subsequently killed off here in the U.S.

While some of the design components like the in-bed storage compartment were adopted by others in the industry -- Chrysler now offers storage in the bed of its Ram pickup, for instance -- the blending of a pickup truck's utility with a car's practicality was only really appreciated by industry enthusiasts. After the initial rush of buying and the onset of the financial crisis, the car-buying public lost its ardor for the design, which is why we keep hearing about its impending death year after year.

Even if this is another dead end on the death-watch road for the truck, a complete overhaul of its design for something that hasn't been all that popular could be costly for Honda. Toyota (NYSE: TM  ) has become the third-largest light pickup truck sales leader, with its Tundra and Tacoma models selling 22,264 units combined in October, but perhaps Honda sees an opening for another light-duty truck. Detroit dominates the big pickup trucks, but the Tacoma is the top mid-size truck in the U.S.

Pickup trucks are one of the biggest profit drivers for vehicle makers these days, and Honda undoubtedly wants a share of the pie. Resurrecting the truck with a new design that will fatten Honda's bottom line is a road it needs to travel on.

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Read/Post Comments (13) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 23, 2013, at 9:52 PM, Jim85035 wrote:

    The high-output 3.5-liter, 24-valve VTEC® V-6 engine produces 250 hp and an equally impressive 247 lb-ft (SAE net) of torque.

    Chrysler'sEngine: V8 DOHC Displacement: 4.7 Liter Horsepower: 310 HPMax RPM: 5650 RPM

    Torque: 330 lb-ft @ 3950 rpm

    2014 Silverado and Sierra. The company has announced that its 5.3L V8 powertrain will have 355-horsepower and vehicles equiped with it will be rated at up to 23mpg.

    The Honda can't pull much at all . it really isn't a truck as the American people know it.

  • Report this Comment On November 23, 2013, at 10:20 PM, GaMbaJd wrote:

    I bought a Ridgeline a couple of months (2013 model - identical to 2014 except for price increase plus I got a few thousand discount for buying end of year.

    Yes, it can only pull 5,000 lbs. But I am not a contractor or farmer, so that is more than enough for anything I want to pull. And I'll bet more than MOST people pull with their truck.

    And I saved at least $13,000 over the cost of a Full Sized Armored Personnel Carrier a/k/a American Pickup.

    Plus I have a DEPENDABLE Honda motor etc.

    But then again, I am not an average American.

    For example I don't spend thousands a year eating out etc.

  • Report this Comment On November 24, 2013, at 6:08 AM, bugman302 wrote:

    Honda TOTALLY blew it in the beginning by marketing this truck a a "golfing" play toy. That stigma has stayed with it ever since, It would make a great service truck with the trunk in bed design is marketed that way since the Ranger is gone. I also heard they did not get very good mielage...

  • Report this Comment On November 24, 2013, at 7:54 AM, AcuraT wrote:

    While some will still buy a reliable Honda truck, GM and Ford in particular have improved their quality tremendously since the 1990s. Consumer Reports and JD Power agree. Honda's problem is that its advantages are not an advantage anymore over the domestics, and its lack of towing kills it in any kind of commercial use. As a result, they may still offer it - but sales will not return to their hay-day as this article correctly states.

  • Report this Comment On November 24, 2013, at 9:00 AM, fouraces55337 wrote:

    Has to be the most god-awful ugly and homely looking truck anyone has EVER built!

  • Report this Comment On November 24, 2013, at 9:03 AM, MsgValadez wrote:

    The best feature I like about this truck is its front wheel drive. The worst part is its expensive sticker price with its low mpg close behind.

    For the life of me, Honda has a good mid-sized truck and I can't believe they haven't improved its appearance, price and mpg.

    =mv= Moore, Oklahoma

  • Report this Comment On November 24, 2013, at 7:50 PM, jhiggins80 wrote:

    Trucks became popular because they were very useful and because of less coach work and labor they were less expense than most autos. Well like TV the manufacturers got greedy and now a nice truck costs $35000. Are they on drugs? I'll ride a motor scooter before i pay that kind of price for a utility vehicle and Autos are heading the same way. I stopped buying new trucks when they topped $10000 and my car sets in the garage for days at a time and I ride the senior transportation bus for free. Produce another cheap VW type Bug very austerely but dependable and watch the sales explode.

  • Report this Comment On November 25, 2013, at 4:05 AM, Bucketduck wrote:

    Trucks like this will never sell that well. You can't tow anything, and it gets terrible mpg. What is badly needed, yet conspicuously absent in the market is a small pickup with a 4 cylinder diesel motor that gets 35mpg on the highway. Price it under 20k and they would sell very well.

  • Report this Comment On November 25, 2013, at 8:33 AM, jdm111992 wrote:

    Ford makes the Ranger in overseas markets...with four full doors....a mini crew cab. perfect for the NOW average pickup driver...go online and check it out...Ford has done very well in the past 5 years, but can still do better. And remember that in the 80's Ford produced a Ranger with a diesel engine.

  • Report this Comment On November 25, 2013, at 11:42 AM, PS75425 wrote:

    Although the Ridgeline could be possibly be the "best" PU truck for those that don't really need one ... all I think Honda had to do to make make it a more viable product was to 1) add more power 300 or so 2) add a gear or more to the tranny ...3) do something about the dreadful MPG, considering it only has 250hp...

  • Report this Comment On November 25, 2013, at 12:38 PM, msugost8 wrote:

    I have one of the first Ridgelines made back in 2006. It now has 336,000 miles on it and runs perfect. I will wait two years for the new Honda truck to come out. My wife and I have been loyal Honda buyers since 1984. We have seven children all with you guessed Hondas.

  • Report this Comment On November 25, 2013, at 4:05 PM, MarkHP48 wrote:

    Toyota (NYSE: TM ) has become the third-largest light pickup truck sales leader....simply Wrong Mr, Motley Foll writer. As usual, you don't research you subject matter. The Dodge Ram is the number 3 selling light duty pickup in the US & has been for decades. Its sales have been up just as much as Ford's on a percentage basis. Drop your bias.

  • Report this Comment On November 29, 2013, at 3:10 PM, CalGuy wrote:

    I think Honda could significantly increase it's pickup truck market share if it changed the purpose of the 2016 Ridgeline. Some of the changes I think Honda needs to make are; 1) Make a compact pickup based on the CR-V instead of the Pilot, something like the 2008 Toyota A-BAT concept, 2) provide a hybrid and small diesel engine options with timing chains instead of timing belts, 3) be able to haul 4' x 8' sheets, 4) have RWD or AWD (forget any notion of a dedicated FWD pickup), 5) have a base version of the truck for under $20k, and 6) be able to get over 30 MPG highway.

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