Well we all know the rise in gas prices is not new news. The price per barrel of crude oil is the leading story in virtually every daily publication. $120, $125, $130, $136 (a record) are all numbers we are unfortunately far too familiar with these days. With these prices translating to roughly $4/gallon at the pump not only are consumers taking a hit but so are the leading pickup truck manufacturers. The chart below shows that as gas prices continue to increase the demand for pickups continues to decline.

Truck demand  vs gas prices may 2008

Moreover, the month of May brought an end to the F-Series’ reign as the US’s best-selling vehicle, one of the industry’s longest running records. For the first time since 1991 the F-Series was replaced by the Honda Civic in this category. It should be further noted that Civic was not alone. Also coming out on top of the F-Series were the Toyota Camry and Corolla as well as the Honda Accord. This has obviously sent Ford and others scrambling to develop new ideas of how to push the declining pickup market. Ford recently announced employee pricing for everyone on all F-Series trucks for the month of June. This is big news and a desperation attempt by the OEM to put more money on the hood in a declining market. They are obviously trying to sell more vehicles and traditionally this tactic has worked… more money on the hood translates into increased demand and increased sales… Traditionally!!!

With the truck market, however, we’re seeing the opposite. While OEMs are offering record incentives, the increasing gas prices have continued to have a negative impact on demand. While incentives for both Ford F-Series and Chevy Silverado have had double-digit percentage increases, year-over-year demand has declined at a tremendous rate.

Truck prices vs. incentives may 2008

So what does this mean for the the future of the pickup market? I think it’s safe to assume that if gas prices continue to climb we will no doubt continue to see a decrease in pickup demand and, more than likely, drastic moves by the OEMs to rectify the problem. Already this week we have seen GM announce the possibility of a complete shutdown of the Hummer line. While this measure is highly unlikely for either the F-Series or the Silverado line, we can certainly expect to see record incentives being placed on all full-size pickups.

So is there any good news for these OEMs? Well apparently so. A recent article in Autoremarketing cited a study by Acxiom Corp. that found owners of the Detriot Big 3 (Ford, GM & Chrysler) light-duty trucks are far more loyal to their vehicles than owners of any import brand. Furthermore, these Big 3 pickup owners are more likely to have several pickups of the same brand and/or have another vehicle from their line in their driveway. So while they might be taking a big hit right now and offering incredible incentives, owner loyality will perhaps pull them through. Until then, employee pricing on a new F-Series has me wishing I waited until now to buy mine!!


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Comments

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  1. Free PPC

    Thanks for the very informative info…

    But that’s not change my taste for
    the F-150.

    I like F-150 regardless of the its price
    and the price gas.

  2. Leif - Compete

    I couldn’t agree more. I’m still happy to drive mine everyday!

  3. Ling

    GM is closing 4 plants, axing thousands of employees and selling off the Hummer. Ford already sold off a couple of brands, and is planning on selling more. The world is going hybrid, and Detroit is suffering because they still don’t get it. You hold on to your F-150 cause it’ll be a collector’s item soon…

  4. A. Longo

    Neat comparison.

  5. Andy

    Nice article Leif.

    I drive a Tundra, it would be interesting to show all the popular trucks and/or SUVs and try to extend the chart back several years to show the impact (or lack of impact) of gas over that time since it started skyrocketing after the Katrina disaster.

    I’ve wondered before about the link between truck owner and level of loyalty compared to the ‘average’ vehicle owner with no truck, thanks for confirming!

  6. mike jones

    They need to make a hybrid lamborhgini, that’s something i would support!

    http://www.minimovie.com/film-128295-Welcome%20Back,%20Clinton

  7. Villend

    How can I to see some stats about this site: http://www.voimex.com

    send your comments to

    F.Villend
    villendf@yahoo.com

  8. Cable Ties

    this is not funny

  9. gm pickup trucks

    gm pickup trucks

    Sounds interesting but not for every one.

  10. ELD DANISMANLIK

    wonderful blog, thank you

  11. bassan

    hi, msj 237 wonderful blog 237 share


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