Full-Size Trucks Hauling in Profits for Detroit
Transaction Prices Rising More Than Double Pace of Industry Average
Just last month, we reported on used truck resale values being near an all-time high, and outpacing the overall industry in general. But the good news isn't just in used trucks. It seems new trucks are hauling in the good fortune for the Detroit Three as well. Since 2005, average transaction prices for full-size pickups have increased at more than twice the rate of the automotive market in general. Even taking inflation into account, average transaction prices have increased 8 percent in the past eight years.
Despite a relatively soft housing market, pickup sales have been strong in the 2010-2012 years, with growing new home construction, a domestic energy boom fueled by natural gas and oil discoveries, the full-size truck market looks poised for even greater growth in the years ahead. In 2013, record sales have taken place for all the domestic full-size truck brands, with almost all models up double-digits.
But the most important aspect of pickups to the automakers' business are the hefty profit margins they generate. By some estimates, as much as 90 percent of Ford's profits are due to F-Series sales, and as much as two-thirds of General Motors' profits. Padding the manufacturer's profits further is higher demand for the more premium-trim models than in years past.
Source: Automotive News (subscription required)