Surge Predicted for Light-Truck Sales

Jan. 8, 2013
Commercial sales of light trucks should surge this year because of the need to replace aging vehicles coupled with significant fuel economy improvements across a range of models, according to OEMs and industry analysts

Commercial sales of light trucks should surge this year because of the need to replace aging vehicles coupled with significant fuel economy improvements across a range of models, according to OEMs and industry analysts.

Research firm Polk, for one, believes that the large pickup truck segment, which it said has declined over the past five years, will likely grow with several important new launches in 2013 and into the 2014 model year – with General Motors, Toyota and Ford Motor Co. all planning to showcase redesigned vehicles in this segment during the next 18 to 24 months, the firm reported.

Increased marketing activity to support these launches, together with a recovering market for new housing starts – which impacts registrations of new pickup trucks within the construction industry – should result in growth in this segment in the coming year, Polk noted.

James Bell, head of consumer affairs for GM, told Fleet Owner that improved fuel economy of the new 2014 Chevrolet Silverado and GMC Sierra pickups rolled out by the OEM late last year will be one of the major drivers of pickup sales in 2013.

“Fuel savings really moves the needle, especially for the smaller [work truck] guys,” he explained. “We’ve really gotten the combustion process right now and our active fuel management system, which shuts down four cylinders when that power isn’t needed, is a really huge advance where fuel economy is concerned. It makes these pickups that much more efficient work tools.”

Chrysler has also focused on fuel efficiency for its truck models, especially where the Ram 1500 pickup line is concerned.

But Bob Hegbloom, director of Chrysler’s Ram Truck division, told Fleet Owner that fuel economy is only part of the equation for work truck users, be they single vehicle owners or fleets.

That’s why Chrysler developed and launched its new Ram Commercial division in November last year; to provide work truck users with a “one stop shop” not just for pickups but for vans and beefier chassis cab models as well.

With the entire auto industry growing by two million units year-over-year in 2012, and further growth expected in 2013, commercial business will be key as it represents about one quarter of the total volume, Hegbloom explained.

“But we needed the proper structure in place to meet the needs of the commercial buyer, so that they can ‘hit the easy button’ when it comes to their business needs,” he said. That includes not only pickups but vans as well, such the Ram C/V van introduced in 2011 and the upcoming 2014 Ram ProMaster, which will go on sale beginning in the thrid quarter this year.

Based on the successful Fiat Ducato, the Ram ProMaster will be significantly redesigned with familiar Ram Truck styling cues, offering features and powertrains preferred, Chrsyler noted – and will be yet another model added to the commercial portfolio within the Ram Commercial division.

To help fuel demand for those products, Ram Truck is also focused on growing a network of Ram “BusinessLink” dealers focused on the needs of commercial customer, and Hegbloom said about one third of Ram Truck dealers were so established by the end of 2012.

"Time is money in the commercial sector, so if we can save them time and make it easier to access a range of services – such as our ‘On The Job’ incentives, specifically designed to lower the expense of commercial upfits – then we’ll win customers as this is a very loyal segment,” he stressed.

Polk added, though, that the growth in light trucks is reflective of a much broader spike in demand for automobiles in North America.

The firm said new light vehicle registrations in the U.S. in 2013 are expected to increase 6.6% over 2012 levels to 15.3 million vehicles, with North American production volumes predicted to increase to the 15.9 million unit range (a roughly 2.4% jump from 2012) driven by an improving economy and capacity expansion in the region.

Also, Polk's analysis indicates new vehicle introductions in 2013 will escalate dramatically, with 43 new vehicle introductions in the U.S. planned for the year, up nearly 50% over 2012 levels. In addition, 60 vehicle redesigns are expected in the coming year. New launch and refreshed product activity is likely to result in an uptick in registrations as showroom traffic and, in turn, sales tend to increase in the timeframe surrounding new introductions.

"We expect continued recovery in the industry in 2013 and 2014, a positive sign for the U.S. economy," noted Anthony Pratt, Polk’s director of forecasting for the Americas. "The auto sector is likely to continue to be one of the key sectors that lead the U.S. economic recovery; however, we don't expect to realize pre-recession levels in the 17 million vehicles range for many years."