A hybrid? Forget it, say rising number of pickup buyers.
Sales of trucks at some dealerships jumped by more than 30 percent in December.
Cartersville, Ga. — In these days of climate change and personal penny-pinching, US automakers are showcasing their new, socially conscious wares: smaller, more fuel-efficient, and hybrid vehicles, designed for a greening economy.
In Cartersville, Ga., Donald Ray, a shiny Bluetooth earpiece clashing with a scraggly beard, has other plans. “I’m a truck guy,” he says, inspecting a used Chevy Silverado short-bed rumbling in idle at a lot here.
Thanks in large part to $10,000 dealer incentives and (relatively) cheaper gasoline, buyers are creeping out of the deep woods and urban jungles, emptying dealer lots of a gritty, gas-guzzling American icon: the full-size pickup truck.
With all other car-sales categories as flat as a mall parking lot, sales of trucks at some dealerships jumped by more than 30 percent in December – usually the slowest month of the year. In fact, dealers reported sales matching or surpassing figures from late 2007 – before the Wall Street meltdown, the freezing of credit markets, and the federal bailout of Detroit’s Big 3.
Hope for the economy
The return of truck buyers represents at least a glimmer of hope for a battered economy – a cautious sign of rising consumer confidence among rural mud-jumpers and urban latte-haulers. But it also presents a paradox for a country that, post-auto-industry bailout, has a social and financial stake in the survival of domestic car companies: Can Detroit afford to ignore the apparently enduring appeal of what country singer Shane Yellowbird lovingly calls “my old pickup truck”?
“The problem isn’t as much the people who need the truck for work, but it’s the people who haul lattes home from Starbucks who have been the prized customers of Detroit,” says Daniel Becker, director of the Safe Climate Campaign in Washington, which lobbies for higher fuel-efficiency standards. “These are people for whom the pickup is a vestigial piece of the past – it’s a lifestyle choice, not something they need.”
“There are two real crosscurrents here,” he adds. “There’s a tendency in Detroit to want to do things the way they’ve always done them, and that’s brought them to the edge of bankruptcy. The risk is that they take a dip in gas prices as a signal that they needn’t change their ways.”
Along with Thailand, where the modified pickup known as the songthaew is a major people-mover, the US is the world’s pickup-truck megapower. Created in 1925, the pickup has come to embody not only America's self-reliance and work ethic, but also the pastoral longings of suburbanites. The truck’s evolution from work vehicle to suburban cruiser, in fact, is what brought trucks like the Ford-150 to the top of the US sales charts.
F-150 still reigns
That love affair hit a rough patch last year. But even with Ford delaying the rollout of its 2009 truck models, the venerable F-150 still topped the overall sales charts for 2008, followed closely by the Chevy Silverado. Market share for large pickups started at 12.3 percent at the start of 2008, fell to 9.3 percent in May as gasoline became expensive, and rose to 13.8 percent in November, as fuel slipped back to 2001 prices. In January, large pickup trucks led all other categories in consumer consideration, as gauged by searches on Edmunds.com.
“The pickup truck is a uniquely American invention, so for those with an impulse toward nationalism it’s kind of a natural way ... to endorse American consumerism in a tough environment,” says Allen Jones, a Bozeman, Mont., novelist who uses “every square inch” of his 2001 Dodge truck for hauling stuff from hay bales to boat trailers.
Conclusion: From the potato plains of Idaho to the edges of the Barnett Shale gas reserves in Texas, American workers are still betting on their trucks. Here in Cartersville, Troy Cline, a grocery store clerk and freelance landscaper, has owned trucks forever and currently captains a faded 1986 Ford F-100. But the sight of a used Silverado brought him to a dealer lot this week for a potential upgrade.
“The economy is tough out here, but there’s still construction going on and people are still working,” he says. As for his own search for a new vehicle, he says, “Owning a truck is kind of a guy thing. It’s sitting up high, above the fray.”
Mr. Cline has plenty of company.
“I have several customers that I’m trying to find trucks for right now: a farmer, a realtor, and a local businessman,” says Keith Watkins, general manager at Heritage Chevrolet in Lugoff, S.C.. “They’re willing to start spending their money again, and that’s really exciting for us.”
And in Wichita Falls, Texas, Patterson Auto Group CEO Paul Tigrett notes a trend: Instead of trading in their trucks, many consumers have added a fuel-efficient car to their personal fleet. About 60 percent of his customers use their trucks for work, he estimates.
“If you’re a plumber or in the air conditioning business or whatever along those lines, you’re not going to show up at a job site in a Yugo,” says Mr. Tigrett. “You’ve got to have a truck.”
Role of incentives
Economists, however, caution against reading too much into the truck sale surge. For one, Detroit is practically paying customers to take bloated inventories off their hands, relieving pent-up demand.
What’s more, the fundamentals of the auto industry overall point to a continued slowdown in sales this year.
“Incentives and lower gas prices suggest that there’s still some life in the truck market, but it is still swimming against these overall national and global trends,” says Martin Zimmerman, Ford’s former chief economist and now a business professor at the University of Michigan in Ann Arbor.
Then there’s the crux for Detroit: How to balance investments in smaller, more-efficient cars against the American love affair with the big ride? In the past, Washington has been leery about imposing stricter fuel-efficiency standards on Detroit automakers and higher fuel taxes on drivers, lest they dampen enthusiasm for the high-profit truck series that has largely sustained US automakers.
But that conventional wisdom is likely to be challenged under President Obama, who has argued for tougher fuel-efficiency standards to reduce carbon emissions by 10 percent in 2020. Moreover, the Washington bailout raised the political and social stakes inherent in the survival of the Big 3.
The recent spike in truck sales is “a major reason why we have not tried to rely on gas prices to move cleaner, more-efficient vehicles into the fleet,” says Mr. Becker, in Washington. “[Automakers] work for us now, and they need to be much more concerned about the air we breathe and the atmosphere our children grow up in and the oil addiction that their vehicles promote. They now have a social responsibility that they failed to recognize before.”
But trying to use tougher federal or state emission standards to force Detroit to build vehicles that Americans ultimately may not want is likely to be counterproductive, says Jeremy Anwyl, CEO of Edmunds.com in Santa Monica, Calif. Offsetting a higher gas tax with federal rebates for purchasing high-efficiency vehicles, he argues, would be far more likely to wean Americans from their love affair with big trucks.