Pickup truck increase drives US auto sales to 3-year high; analysts say its sign of recovery
September 5, 2012
Associated Press – September 4 – Big pickups carried U.S. auto sales to their highest level in three years.
Demand for full-size pickups jumped 16 percent in August, helping to make it the strongest sales month since August 2009. Overall auto sales increased 20 percent from a year earlier to nearly 1.3 million, according to Autodata corp.
The rising demand shows that businesses need to replace aging trucks and feel more confident about the recovery in U.S. housing — an industry where pickups are essential for hauling equipment and crews.
“Businesses don’t usually go buy a fleet of trucks unless they have good reason to believe that business will be ramping up,” said Jesse Toprak, vice president of market intelligence for the TrueCar.com auto pricing service
Ford, GM and Chrysler, the biggest makers of full-size trucks, notched double-digit gains in overall sales last month.
In pickups, Ford’s F-Series, the top-selling vehicle in America, saw a 19 percent sales increase, as did Chrysler’s Ram pickup. Sales of General Motors’ Chevy Silverado rose 4 percent, while the GMC Sierra was up 9 percent. Toyota’s struggling big truck, the Tundra, posted a huge increase of 68 percent.
The rising demand helped push total U.S. auto sales last month to an annual rate of 14.5 million. That’s the best monthly sales pace since the government’s “Cash for Clunkers” rebate program in August of 2009.
Pent-up demand is part of the reason for last month’s truck increase. The average vehicle on U.S. roads is nearing 11 years old, and some are simply wearing out.
But automakers and industry analysts say the economic recovery — new housing in particular — is also starting to make buyers feel more comfortable about a big-ticket purchase.
There’s a direct correlation between the housing market and pickup sales, they say. When people who work in housing or other construction are more confident, they tend to invest in equipment. Some may be adding crews and need vehicles to get them to and from job sites.
Housing has been in the dumps since the 2008 financial meltdown. But recently there have been some good signs. U.S. new home sales rose 3.6 percent in July to match a two-year high reached in May. In the past 12 months, sales have jumped 25 percent. But new-home sales remain well below the annual pace that economists consider healthy.
Truck sales fell dramatically in 2008 and 2009 as gas prices spiked and the housing industry collapsed. Since then, they’ve never fully recovered.
Gas mileage also is playing a role in the pickup increase. Newer models are lighter than older ones and can be equipped with small but powerful V-6 engines. A business owner can cut costs dramatically by replacing a 10-year-old pickup, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting firm.
A new Ford F-150 with a six-cylinder engine can get up to 23 miles per gallon on the highway. A V-8-powered F-150 got only 18 mpg on the highway in 2002.
Jeff Jira, 32, of Pewaukee, Wis., had no intention of buying a new truck when he went to his local Ram dealer to get his 2007 pickup serviced in late August.