Ford Cites Weak Pickup Market in February
Only the people who really have a practical need for trucks are buying trucks.
Of all the blows Chrysler, Ford and GM have suffered in the last six months â€" and that's a lot, including a credit freeze, a U.S. recession and monumentally low consumer confidence â€" the drop in truck sales is still probably the most damaging.
"It is not good for us when the consumer moves out of fullsize pickups," said Ken Czubay, Ford vice president, sales and marketing, in a conference call today with reporters and Wall Street analysts.
That could be the understatement of the century, only it's still early in the century.
Ford isn't the only one. I was blown away by something Gary White, GM North America vice president, vehicle line executive â€" full size trucks said at a New York dinner last fall. He's in charge of bread-and-butter models like the Chevrolet Silverado, GMC Sierra, Chevy Tahoe and Suburban, GMC Yukon and Denali, and the Cadillac Escalade.
White said that his fullsize trucks were the only profitable products at GM. Not the most profitable, the only profitable products.
For the whole U.S. industry, including foreign and domestic brands, auto sales fell 41.4 percent from the year-ago month, to a total of 688,909 cars and trucks, according to AutoData Corp. February was the sixth month in a row of sales below 1 million units.
Car sales in February were down 38.4 percent. Trucks were down 44.1 percent. February sales in the United States were also a disaster for Honda, Nissan and Toyota. Their truck sales were also down more than their car sales, but both are way off.
George Pipas, U.S. sales analysis manager for Ford, said that when U.S. gas prices spiked in May and June 2008, fullsize pickups fell to about 9 percent of the total market. When gas prices fell again, that rebounded to an average of 14.6 percent in the fourth quarter of 2008, he said. But in February, fullsize pickups fell back to about 11 percent of the market, Pipas said.
That's despite Ford having a newly introduced F-150 pickup, and Dodge having a new Ram pickup. If car companies were redwood trees, the years when they introduce a new fullsize pickup should be nice, wide growth rings. Not this time.
"To a greater extent than two or three years ago, people that are buying trucks are the people that need trucks. At the margins, there is some personal-use buying going on (but there are) not too many discretionary purchases going on the in the market right now," Pipas said.
Czubay said, "The two-adult household that buys a pickup truck to tow a boat, that market, quite frankly, is not present any more."