Last month, light-duty trucks outsold cars by the widest margin since December 2005, according to the Associated Press. In October, 502,038 light-duty trucks, which include half-ton pickups, SUVs, minivans and crossovers, were sold, representing 54% of all new retail car sales, according to J.D. Power and Associates. The news comes as a mixed blessing.
Robust truck sales are a good barometer for economic health, according to the AP. SUVs, crossovers and trucks typically come with higher asking prices than cars, which is a tangible representation of the increase in consumer confidence we’ve seen over the year. It’s also a good sign for small businesses which invest in new equipment, such as a new half-ton pickup, as output increases.
On the flip side, the gains that trucks have made are probably seen negatively by environmentalists. Even the most fuel-efficient crossovers are often hundreds of pounds heavier than their car counterparts, which typically contributes to a 1 or 2 mpg decrease in relative fuel economy.
Cheaper and more stable gas prices are helping out truck sales, too. When gas sharply climbed to $3 to $4 a gallon in 2008, truck sales finally lost out to cars for the first time in eight years, says the AP. Gas prices currently stand at $2.80 a gallon, according to AAA, which is higher than the $1.50 to $1.90 range seen during the peak popularity of trucks, but it’s not enough to dampen sales in October.
It’s important to point out that while trucks have outsold cars over the past couple of months, cars will most likely make up the bulk of sales in 2010. Nearly 4.5 million cars have been sold year-to-date, which represents about 53% of industry sales.
The strong truck sales have also played a contributing role to the upswing in market share and sales at Ford, Chrysler and General Motors. All three domestic automakers are more dependent on truck sales than cars: Trucks comprise 65% of Ford, 68% of GM and 77% of Chrysler sales in October.