Pickups poised to make comeback

Analysts expect trucks to lead sales growth in 2013

Joe Hinrichs, Ford Motor Co.’s president of the Americas, on Thursday announces Ford’s plan to add 2,000 workers to the Claycomo, Mo., plant where the F-150 pickup is assembled. A stronger economy helped truck sales rise 18 percent in the first quarter.
Joe Hinrichs, Ford Motor Co.’s president of the Americas, on Thursday announces Ford’s plan to add 2,000 workers to the Claycomo, Mo., plant where the F-150 pickup is assembled. A stronger economy helped truck sales rise 18 percent in the first quarter.

Big, burly pickups - dismissed as dinosaurs five years ago - are expected to lead the auto industry in sales growth this year, analysts said Friday.

“I think this will be the year of a truck comeback,” said Jesse Toprak, senior analyst at TrueCar.com.

Pushed by strong economic winds, truck sales were up 18 percent in the first quarter and should remain robust for at least another year, analysts say.

Housing sales and construction, two major drivers of truck sales, continue to improve. And gas pricesare almost 30 cents a gallon cheaper than they were a year ago.

Even more important, many business owners believe the economy is finally on the mend and feel increasingly comfortable trading their worn-out 11- or 12-year-old vehicles for new trucks.

“People started replacing their old cars a couple of years ago,” Toprak said. “But businesses want lots of assurance that things really are getting better before they move.”

They will find plenty of temptation.

For the first time since 2007, four of the six manufacturers that compete in the full-size pickup segment will offer all-new or mostly new trucks.

The 2013 Ram, for example, arrived late last year, and the 2014 Toyota Tundra, introduced a few weeks ago, is expected at dealerships this fall.

In the next six weeks or so, Chevrolet’s 2014 Silverado and GMC’s 2014 Sierra will roll into showrooms, the first new pickups from General Motors in six years.

“There’s just a lot of pent up demand from consumers who postponed decisions in 2008 and 2009,” said Alec Gutierrez, senior analyst at Kelley Blue Book.

That should result in higher automaker earnings this year.

Despite pickups’ steep tumble in 2008, they remain the most profitable vehicles in the auto industry, analysts say.

Ford’s still-fresh F-series truck has long been the top selling vehicle of any kind in the U.S., followed by the Chevrolet Silverado - and both have substantially higher profit margins than cars.

Chrysler’s newly refined Ram, the seventh-best-selling vehicle in the U.S. last year, continues to be the automaker’s top performer.

“It used to be for every customer I’d take from Ford or Chevy, they’d take some from us,” said Bob Hegbloom, director of the Ram brand. “We’re still trading even with Ford, but I’m taking buyers from the other three guys.”

Three years ago, manufacturers sold 1.3 million pickups in the U.S., half of their pre-recession total of 2.5 million.

Sales climbed to 1.6 million last year and are still growing.

“If we maintain 18 percent or higher growth this year, we’ll be approaching 2 million,” said Doug Scott, Ford truck group marketing manager. “I said a year ago that I didn’t think the segment would ever get back to 2.5 million, that 2 million would be a high-water mark. Now there’s a lot more optimism about it.”

Better fuel economy may be attracting some buyers, particularly people who use their trucks for work.

Ford was first to put a premium on pickup economy, developing a high-torque turbocharged V-6 engine as an alternative to a V-8.

The EcoBoost V-6 is rated at 16 miles per gallon in the city and 22 on the highway.

Ram went even further, bolting an eight-speed automatic transmission to a new V-6 for 2013 that can get as much as 17 mpg in the city and 25 on the highway.

This summer, Ram will also offer the first diesel engine in the light-duty segment.

Meanwhile, GM says, the new 5.3-liter V-8 engines in its trucks will get 16 mpg in the city and 23 mpg on the highway.

All those ratings are 15 to 20 percent better than they were five years ago.

Buyers can also expect some deals. Manufacturers are already advertising lease deals on their pickups for less than $300 a month.

“Competition in this segment has always been fierce and will probably just get more intense,” said Maria Rohrer, marketing director for mid- and full-size Chevrolet trucks.

In its bid to get more market share, Toyota added two luxury models to its 2014 Tundra lineup.

The company thinks those trucks will attract high-end “personal-use” buyers who tow trailers on the weekend or use their trucks for recreation and want to be pampered while doing it.

Most of those buyers fled the segment when gas hit $4 a gallon in 2008 and the economy collapsed, leaving mainly people who use their trucks in their jobs and have no alternative to a pickup.

“There’s just sort of a gravitational force toward pickups right now,” said Andrew Franceschini, national truck marketing manager at Toyota.

Business, Pages 27 on 05/04/2013

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