America is a nation known as “The Great Salad Bowl” because of the multicultural makeup of its people – similar to salad ingredients – and this diverse collection of backgrounds is what makes this country as great as it is distinct. This mixture and exchange of customs, ethnicities and beliefs serves as a foundation from which the United States has advanced into an ever-changing “America” with a uniqueness that’s all its own. Consequently, we have developed our own tastes, such as a penchant for football and automobiles, and few things are more markedly American than the pickup truck. With a propensity towards striving to live the American Dream and rooting for the underdog, the country is rebounding after taking a hit during the recession and the auto industry is helping lead the charge. In particular, the large pickup segment stands out in its recent comeback, but it’s important to study the causes of the revival in large pickup sales in order to predict the segment’s future performance in the post-recession economy.
Over the past five decades, the U.S. “Big Three” automakers have accounted for 70% of the nearly 698 million vehicles sold. Formidable auto manufacturers from Japan, particularly Toyota, Honda and Nissan, have since entered the U.S. market and have by and large been embraced by American consumers. But one stark contrast remains between them and domestic automakers: while the Japanese have made tremendous gains through their meticulous study of American preferences, domestics continue to enjoy one noteworthy competitive advantage in the form of their history of designing and building pickup trucks. This familiarity with utility vehicles and those who purchase them has proven critical to the success of domestics in the U.S. market as trucks have been among the most popular vehicles for years.
As pickup trucks, especially large pickups, have become a staple of the auto industry in America, the sales performance of the segment is of particular importance with regards to the market’s health. In 2013, total pickup sales represented 13.6% of all deliveries, which ranked it fourth among all segments. However, as recently as 2005, before the economy spiraled into the Great Recession, the pickup segment contributed 18.8% of total sales and was the largest in the industry. With sales trending upward in the past few years, consumers are displaying a renewed appetite for pickups and sales last year topped 2 million units for the first time in six years.
Since 2009, the total pickup sales have grown by 53%. But while the segment’s rate of recovery has been strong, a critical factor to consider is how the large pickup sub-segment increased by eight percentage points to reach 88.4% of all pickup sales. During that time, small pickup sales decreased by 9.4% while large pickups jumped by 68.3%, but there is more to the story than merely an evolution of the truck market. While trucks have historically held a major piece of the U.S. auto industry, it is specifically the rebound of the large pickup segment that is outpacing the market and because the segment is a catalyst for the industry’s resurgence, understanding what influences play a part in its growth is vital as a means of anticipating future trends. Our inaugural edition of NADA Perspective takes a deep dive into what variables impacted the performance of large pickups in the segment’s recovery, including what effect those factors are expected to have going forward. Download the January 2014 NADA Perspective here.