Take My Pickup - Please
April 15, 2009

By Bill Visnic

Headlines declared the auto industry achieved a showroom mini-victory in March by markedly improving sales over a dismal February. But the improved numbers were something like lipstick on a pig as March's boost nonetheless concealed some ugly realities.

One of the most foreboding trends to continue despite the March uptick: the still-accelerating plunge of the full-size pickup truck market. If segment sales do not stabilize this year, revenue-ravaged automakers may have to take drastic measures.

The economic meltdown and $4 gasoline conspired to make 2008 a lousy year for large pickups, but the shriveled numbers for 2009 are making last year's sales look like a comparative bonanza.

According to data from AutoObserver parent Edmunds.com, full-size truck pickup sales for the Detroit Three automakers in the first quarter plunged 45.2 percent for General Motors Corp.'s Chevrolet Silverado line, 44.9 percent for Ford Motor Co.'s F-Series and 32 percent for Chrysler's Dodge Ram.

Projected to annualized (but unadjusted for seasonal variation) total, the first-quarter full-size pickup totals are at least one-half -- and approaching one-third -- the respective totals of these model lines at their zenith in the mid-2000s.

Consider Ford, the full-size pickup leader. Based on unadjusted first-quarter sales, the company is tracking to sell about 326,000 F-Series this year. Compare that with the F-Series' best sales year, 2004, when a bulging 888,818 units were sold. If 2009 full-year sales track with the first quarter, Ford will be dealing with a loss of more than a half-million units from the F-Series peak.

For GM's Chevrolet full-sizers, the line's best year was 2005, tallying 705,951 sales, according to Edmunds.com. For 2009, the C/K line is on course to move 269,132 units -- a 62 percent fall.

Dodge's Ram always has lived with 3rd place, so the absolute numbers are less extreme, but the proportions are similar: Ram's best year was 2003, rolling 449,373 through the showrooms. Based on first-quarter unadjusted sales, Ram is on pace this year to sell 186,476 units, a loss of more than a quarter-million sales from the Ram's zenith.

Prospects are no better for the upstart Japanese automakers, who looked at the segment's outsized numbers from earlier in the decade and decided they needed a piece of the action. For a time, their efforts brought furrowed brows in Detroit. But no longer, as the disastrous market has savaged Japanese makers' full-size-pickup volume to a why-bother level.

For Toyota Motor Corp., which projected sales of 200,000 units for the redesigned Tundra fullsize pickup currently on the road, it came close in the truck's first year, 2007 (also the Tundra's sales peak), selling 196,555.

But now, Toyota surely is regretting the $800-million-plus investment in the San Antonio, Texas, plant constructed to handle the predicted growth of Tundra sales. Last year, Tundra sales dipped to 137,249 -- and so far this year, Toyota's moved just 18,349 examples of its full-size pickup -- working out to a projected unadjusted annualized total of 73,396. That's a drop of more than 123,000 units in just two years, nearly 63 percent.

If Tundra's sales are a fraction of the Detroit big trucks, Nissan Motor Co. Ltd.'s upstart Titan is a fraction of a fraction. Titan's best-ever performance was the 86,945 units sold in 2005 -- little more than one-tenth the Ford F-150s sold that year. By the end of last year, Titan sales dropped to 34,053, according to Edmunds.com.

And wither Titan so far this year? Nissan sold 4,582 through the first quarter -- leading to an unadjusted projection of 18,328 for all of 2009 -- a 79 percent crash compared with 2005 sales.

Source: Edmunds.com

Heavy-Duty Discounts

Slow pickup truck sales are not due to a lack of effort in the way of incentives by manufacturers.

Industry incentives in total reached an all-time record in March, according to Edmunds.com. And incentives for pickup trucks were the highest of all. In March, the average Total Cost of Incentives, Edmunds.com's proprietary calculation of incentives, stood at $3,153 for every vehicle sold in the U.S. The average was $4,860 TCI for every pickup sold in America. In other words, the average large pickup sold was discounted by 21 percent.

Source: Edmunds.com

The Dodge Ram pickup has had the heftiest incentives for months, leading all trucks again last month. In March, the average incentive was $5,723 for every Ram pickup sold, according to Edmunds.com's calculations. The Ram is the most heavily discounted vehicle, with 24 percent being knocked off its price.

The GMC Sierra is not far behind at $5,556 per truck sold; its Chevrolet counterpart, the Silverado, averaged $5,340 in incentives per truck sold for a nearly 22 percent discount off its price. Nissan paid $4,913 in incentives for every truck for a discount of 23 percent.

Ford and Toyota were under the $4,000 mark. Ford spent about $3,696 in incentives for every F-150, a 19 percent discount. Toyota spent $3,211 for every Tundra, amounting to an 18 percent discount.

Slow Delivery

Despite hefty incentives and heavy discounting, some pickups are taking a long time to sell.

For the industry in general in March, the days to turn -- the number of days from the time a vehicle is delivered to a dealer until it is driven off the lot by a buyer -- stood at 98 days, the highest industry days-to-turn rate Edmunds.com has recorded since it began keeping records. The truck average was under the industry average at 81 days.

Ford, which launched a redesigned F-150 for the 2009 model year, is in the best shape in terms of days to turn -- and thus, inventories -- at 48 days to turn. In contrast, Nissan's Titan had the highest days to turn at 110 days, followed by the Dodge Ram at 103 days and the Toyota Tundra at 96 days. Chevrolet Silverado and GMC Sierra were in the mid 80s.

Source: Edmunds.com

Posted by Michelle Krebs at 10:42 AM under Analysis , Chrysler , Featured , Ford , GM | Comments (2) | digg this | Seed Newsvine

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