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.”
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.
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 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.
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.
And 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.