Are Truck Trends An Economic Barometer?
Full size trucks lead the way
The Nissan Titan is one of six full-sized truck models available.
I read Edmunds’ analysis about pickup truck sales as being a measuring stick for the nation’s economic health and have to say I agree with what they shared.
Edmunds quoted Dale Buss, contributor to AutoObserver.com (an Edmunds publication), to outline their case. Buss said, “Pickup-truck sales gained more traction last month, and industry executives are starting to believe that their biggest and most profitable vehicles can be counted on to haul an even larger share of the fledgling recovery for the rest of the year and beyond.”
Big Trucks
In times past that has certainly been true. Pickup trucks are among the most profitable vehicles sold, especially crew cabs favored by businesses. When those orders rebound, then signs of recovery should follow. These trucks are favored by construction workers whose own industry — building new homes and businesses — has lagged in recent years.
The full-size truck segment is defined by six models: the Ford F-Series, Chevrolet Silverado, GMC Sierra, Ram 1500, Toyota Tundra and Nissan Titan. The Ram 1500 was formerly known as the Dodge Ram 1500 before the Chrysler Group, LLC decided to separate its Ram truck line from its Dodge car line.
Truck Trends
Last month’s auto sales weren’t spectacular, but there was one trend evident that supports what Buss and Edmunds had to say: sales of Ford’s F-Series topped 50,000 units for the month — the first time that happened since February 2008 — while GM sold more than 35,000 units of its Chevrolet Silverado. Ford and Chevy are the two top selling full-sized truck brands in America.
Importantly, Edmunds’ analyst Ivan Drury has noted that the trade-in rate for a new-truck purchase by people who already own trucks has surged to more than 72 percent in 2010, a number last seen in 2005. That number is in contrast to a figure in the mid- to upper-60s range for the past four years.
Big Incentives
Though big pickup trucks can be pricey, incentives are still high, averaging $4300 per truck according to Edmunds. Likely, the lion’s share of discounts are on the heavy duty trucks, but each of the manufacturers will put cash on the hood if that move spells the difference between a sale or the customer running off to the competition.
Edmunds sees truck sales improving over the coming years, perhaps reaching 15 percent of the market as it did back in 2005. That would help the automakers, particularly the Detroit 3, who still rely on big trucks and sport utility vehicles to generate profit for their respective operations.
Photo Credit: Nissan North America, Inc.
