While rising gas prices have taken their toll on the pickup market, dropping sales considerably, decreasing revenue on further sales and also decreasing the value of trucks already in the consumer market, the pickup market has not been entirely destroyed. Pickup sales are still the third-largest automotive segment in North America, according to MSNBC.com.
Yes, it's true that sales have fallen. Estimates for 2008 sales are at 1.4 million units, down from previous annual levels at 2 million. That 1.4 million is still roughly 11% of all vehicle sales in the United States. Even though the vehicle value has dropped, pickups still enjoy hefty profit margins over the now faster-selling small cars.
The only difference currently is that people buying pickups are those who actually need them. According to MSNBC, the recent drop in truck sales should be attributed as much to the demographic of truck buyers as to gas prices. A quarter of truck buyers never used them to tow, haul or go off-road, says Dan Carney, author of the article. These drivers were the first to leave the market once gas prices shot up as they realized they could not afford driving a truck for purely aesthetic reasons.
This realization has led truck manufacturers, such as Ford, to rethink their truck design and marketing strategy. Manufacturers realize that they overdesigned their vehicles for towing and hauling abilities that were underused at the expense of fuel efficiency. New-generation vehicles will be smaller and less pricey, what automakers hope consumers are looking for in the present market.
SEMA members have the opportunity to prepare for this wave of smaller trucks. In addition, current truck sales are far from dead and SEMA members have the opportunity to continue providing specialty equipment for those vehicles.
For more original SEMA market research, including a full version of the above summary and archived PADI reports, visit www.sema.org/research.