Declining Demand for Trucks
Pickups sales have been high because they are reliable when it comes to engine power and performance. In fact, Detroit automakers are considering this type as sales and profit boosters as compared with SUVs.But, in today’s modern time, the pick ups evolved into more sophisticated vehicles. They now have expensive features found on cars that include leather seats, booming stereos and large passenger compartments. Moreover, pickups have also adopted the same image as SUVs and are now parked in industrialized areas – gone are the days for “construction site only parking”. Unfortunately in terms of popularity and sales, SUVs surpassed pickups. And even for companies with the newest models, truck sales have dropped while rebates and other incentives are climbing.
Two months ago, Bucky Hacker exchanged his 2002 Dodge Ram Quad Cab pickup with a subcompact car - the Mazda 3 with top of the line Mazda throttle position sensor. A student from Oak Ridge, Tennessee, Mr. Hacker bought his Dodge vehicle to drag a boat and also to attract girls with its very masculine appearance.But he was ridiculed. His Dodge gas consumption reached 13 miles per gallon just for towing the boat while his new Mazda averages twice that or 26 miles per gallon in city and highway driving.
According to him the reasons behind the decline in the truck sales are the customers’ growing sense of environmental concern, the steeping gas prices, and the uncertain housing market which triggers number of contractors to delay buying new trucks. All these caused the sales drop to 5 percent so far from last year’s weak market. Such percentage is more than 50 percent of the overall decline in industry sales which is so far 2 percent down this year.
According to the Power Information Network, the average discount on a Dodge Ram is $6,000 – a $500 increase since January. On every Silverado pickup, Chevrolet is paying an average of $2,343 in incentives. When the truck was new at the beginning of the year, the brand doubled its discounts. A data from CNW Marketing Research, which follows industry trends, showed that 6 years ago, 28 percent of consumers all over US who bought pickups did so because of the vehicles’ appearance.
Ford, which strongly depends on trucks, has 24 percent sales on pickups and 41 percent on the company’s gross North American profits during the past five years. This was according to Mr. Johnson’s computations in a research report.Same as Ford, GM, too, heavily relies on pick ups. GM’s 32 percent of gross profits is composed of 20 percent pickups sales and others; while Chrysler pickups contributed 25 percent of its profits and 18 percent were pickups vehicle sales during the past five years.
However, despite economic dread, some dealers say their pickup truck business has remained as it is. Meanwhile, auto makers that were badly affected by such trend on trucks are optimistic that they will soon find a way to regain their losses. To make pickup trucks marketable again like decades ago, car companies must address the issue on the vehicles’ fuel economy and make some more innovations. After all, everybody now is affected by the continuously increasing gas prices while considering vehicle design and styling.
