Sedans and smaller cars used to dominate the market as the most popular, but that trend has shifted in pickup trucks’ favor this year.
For the first time in recent memory, pickup truck sales outpaced car sales. While the recent surge has to a lot to do with the coronavirus pandemic halting car production, the other reason is that car sales have been slowly declining while pickup and SUV sales are increasing across the board.
Recently, there has been a slow shift towards pickups and SUVs fueled by a particular set of buyers increasing while others have decreased. Households, for example, earning between $50,000 to $99,000, have been buying pickups while lower and higher-income buyers have reduced across the board.
Since 2014 GM has seen their pickup sales jump from 10% to a third of overall sales with similar results at Chrysler and Ford. The trend has meant that the manufacturers have increased their higher-margin truck offerings while reducing their car choices.
It’s not just a desire for cargo space and pulling power that is fueling the trend. Stimulus related loan incentives have pushed zero-interest loans from 4.7% of total sales to 25.8%. People taking advantage of these incentives have started to cause a shortage in pickup supply as manufacturers have paused car production. And that will remain true until plants are allowed to reopen.
The good news for manufacturers is that the demand won’t just go away. As soon as companies like Ford resume production, they’ll have customers lined up around the block waiting to get the 2021 F-350 or the newest Ford Ranger. Customers may decide to go with alternatives in the meantime, but a majority will likely postpone their purchases until recent models are restocked.
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