Hyundai Is Serious About Building a Pickup Truck

Source: Hyundai

When the Hyundai Santa Cruz was unveiled at this year’s Detroit Auto Show, it nearly stole the show. There had been whispers that Hyundai might look into bringing a truck to the show, but you couldn’t even call them rumors. Then, out of nowhere, Hyundai showed up with the Santa Cruz and got everybody talking. Was it just a show car? Would a production version ever see the light of day? Reuters is reporting though that Hyundai is seriously considering building the Santa Cruz.

That doesn’t necessarily mean that production of the crossover-based pickup is a guarantee. Hyundai said there were “hurdles” in the way of production but didn’t clarify or elaborate on what those hurdles are. Reading between the lines though, it sounds like Hyundai’s trying to make sure a pickup truck like the Santa Cruz concept can be built in a cost-effective manner, as well as trying to determine the best way to convert initial interest and excitement into actual sales.

The Santa Cruz concept itself was definitely not production-ready, and a production version might not look exactly like the concept. The final decision on the platform, the powertrain, and even the layout could strongly influence the final design, so don’t be surprised to see one or more variations of the Santa Cruz at future auto shows. Hopefully the production version at least draws a lot of inspiration from the concept because the design of the Santa Cruz was spectacular. It looked muscular but well-proportioned and attractive.

One of the most desirable qualities of the Santa Cruz was that it rejected the typical truck look and instead drew its inspiration from the crossover SUV segment. It would be a smaller alternative to even the Chevrolet Colorado or Toyota Tacoma, with its bed offering more versatility and functionality than the hatch in a typical crossover. It’s a niche that could actually be extremely profitable. Customers are flocking to crossover SUVs for their style and features, but that doesn’t necessarily mean they want to throw firewood, muddy dogs, or sweaty sports equipment in the back of their Ford Escape.

Source: Hyundai

Meanwhile, with the price and size of even midsize pickup trucks steadily increasing, customers who want a more compact and less expensive truck are still high and dry. The latest crop of midsize pickup trucks is a refreshing alternative to the humongous fullsize trucks on the market, but none of them are truly small. Wagons and crossovers are still the only alternatives available if the Tacoma is bigger than you need.

A major part of keeping the price down on a production version of the Santa Cruz though is going to be making sure it isn’t hit with the “chicken tax.” Avoiding that would require Hyundai to produce its truck in the U.S. Consequently, it would also probably have to share a platform with a vehicle that Hyundai already produces here. If Hyundai can’t find a way to build a production version of the Santa Cruz in the U.S., it’s unlikely that it will be able to justify the cost of paying the import tariff.

For anyone who isn’t familiar with the “chicken tax,” it’s a 25% tariff that originated in the 1960s as a result of European countries placing a tariff on the importation of American chickens. While the majority of the original tariff has been repealed, the tax on pickup trucks remains in place. Labor groups and American automakers love the advantage that it gives them in the U.S., but at the same time, it’s a bit of an arbitrary policy.

What may work to Hyundai’s advantage though is the free trade agreement between the U.S. and South Korea. While it didn’t immediately eliminate the chicken tax, it slowly phases it out. By 2021, trucks manufactured in South Korea will be importable without the 25% tax. If it can’t find a way to manufacture the Santa Cruz in the U.S., it may simply wait until the free trade agreement allows it to manufacture the truck in South Korea.

Hopefully the Santa Cruz can make it to production sooner than 2021. Developing a new vehicle is a slow process, but especially if U.S. production is an option, it would be awesome to see a truck make it to market that truly goes in a new direction. Done right, a fuel-efficient but fun, crossover-based, small pickup truck would be awesome and probably just what the American truck market needs.