When 2008 is all said and done, the auto industry will have marked one of its worst years in decades. A slowing economy, high gasoline prices and fickle consumers will be among the top reasons cited for the difficult year, although the latter reason may not be fully explained. After all, if the economy sucks and gas prices are high, why wouldn’t consumers avoid big cars, trucks, and SUVs?
Now that gas prices have dropped, at least temporarily, consumers are once again flocking to the truck market, making the Ford F-Series and Chevrolet Silverado the two best-selling vehicles of October 2007 , a position they regularly held month after month. during years. Yes, trucks are making a comeback, but maybe not for the reasons you might think.
Let’s take a look at this recent phenomenon and whether the sales momentum of a key segment of auto sales will last.
Hit since the beginning of the year by sluggish sales, the truck segment has found itself in an unusual position: More passenger cars have been sold than trucks month after month for much of the year. At the center of this shift are high gasoline prices, which rose well above the $ 4 per gallon for regular gasoline earlier this summer. That, along with a bitter economy, hurt the sale of Ford F-Series, Chevrolet Silverado, GMC Sierra, Dodge Ram, Nissan Titan and Toyota Tundra. The $ 100 refills scared even the most loyal shoppers, who decided to wait for the market to come out.
During the toughest months, incentives for new trucks reached their highest levels as automakers lowered their prices in an attempt to get people to the showroom. Finally, in early September, when gasoline prices began to recede, buyers began to appear and sales rose. In October, Ford, GM and Chrysler were rewarded with a good boost in truck sales thanks to the combination of incentives and rapidly falling gas prices.
In fact, during the month, the Ford F-Series and Chevrolet Silverado finished in sales once again, easily outpacing the third-best-selling vehicle, the Toyota Camry, by fifty percent.
The increase in sales should also be attributed to something else besides incentives and lower gas prices, and that would be stifled demand. Assuming that quite a few homeowners would have switched higher earlier in the year but were hesitant due to market conditions, the latest push likely reflects the opening of floodgates to meet previously restricted consumer demand. Now has become a good time to buy and the market reflects that change.
Will the sales push last longer than a month or two? That remains to be seen. If gas prices stay below two dollars a gallon and the economy stabilizes, truck sales should stay strong. If the economy worsens, then all bets are off; the market could crash regardless of how low gas prices are.
Not everyone is thrilled that truck sales have picked up, particularly those who think it will make drivers use more gasoline, thus increasing our dependence on foreign sources of oil and causing more pollution. Yet for the big automakers that rely on truck sales for profit, the rally is welcome even if it turns out to be just a temporary boost.
