Ford, GM Say Housing Recovery Will Fuel More Pickup Sales
"Housing is probably along with autos the brightest spot in the economy," Kurt McNeil, GM U.S. vice president for sales operations, said Tuesday on the company's August sales call. He said August pickup truck sales rose to 10.9% of GM total sales from 10.4% in July, and GM expects a rise to nearly 12% in the remaining portion of the year.
Historically, pickup truck sales and the housing market are closely correlated because when the housing market is growing, workers in the industry -- such as contractors, roofers and plumbers -- buy new trucks. Moreover, pickup truck sales make seasonal gains in the second half of the year. In fact, September is "truck month," when truck marketing increases. "We are at an inflection point," McNeil said. "September favors higher truck sales."
On the Ford call, economist Jenny Lin declared: "We believe that the recovery in the housing sector does play a role in continuing to support our full size pickup sales. We are going into the high season for the truck sales, (which) will support continued strength in full-size pickup sales."
Sales of Ford's F-150, the top selling U.S. vehicle, climbed 19% in August to 58,201, the year's highest monthly total. Sales of the Chevrolet Silverado, the second-best selling U.S. vehicle, climbed 4% to 38,295. Sales of Dodge Ram pickup, the eighth best-selling vehicle and the best-selling Chrysler Group vehicle, gained 19% to 25,215. Clearly, the Detroit Three benefit disproportionately from improved pickup truck sales. August combined sales of Toyota (TM) Tacoma and Tundra rose 53% to 23,540.
Ford analyst Erich Merkle noted that pickup sales account for 11.2% of total industry sales, up from 10.7% in July and 10.2% in June.
For GM, the trends in Silverado sales are particularly encouraging. While Silverado August incentive spending was down $800 from July, the average transaction price was down $200. Year to date, incentive spending is down $200, while the average transaction price is up about $2,200. Moreover, GM will unveil its all-new 2014 Silverado next year.
Edmunds.com analyst Jessica Caldwell said Ford will have to battle to maintain its lead in the pickup truck segment.