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Light Truck Sales Plummet in May 2008

3 June 2008

May08sales
Passenger car sales have exceeded those of light trucks for three months running, with the gap widening. Click to enlarge.

May 2008 US sales of light-duty trucks dropped 23.6% compared to May 2007 to 601,703 units, according to Autodata. Overall light-duty vehicle sales were down by 10.7% for the same period, while sales of passenger cars increased 2.4%.

Car sales exceeded truck sales for the third month in a row, with the gap between the two widening each of those months. In May 2008, passenger cars accounted for 56.9% of all light-duty vehicle sales; the last time the passenger car percentage was at that level (on an annual basis) was in the mid 1990s (58.8% in 1995, 56.7% in 1996).

May08sales2
Percentage change in vehicle sales for Big 6 automakers in May 2008. Click to enlarge.

Major automakers saw their truck sales take a pounding in May. GM reported a 36.9% drop in sales of its light trucks on a drop in total vehicle sales volume of 27.5%. Ford reported a 25.8% drop in its total truck sales; Ford’s SUV sales were down 44.4%, and pickup trucks and vans were down 28.6%. Overall, Ford sales were down 16%. Chrysler LLC saw its truck sales drop 24.3% on a total drop in vehicle sales of 25.4%; Chrysler was the only one of the top volume automakers to see its car sales decline more than its truck sales.

Toyota’s truck sales dropped 12.2% on a total sales decline of 4.3%; Honda’s truck sales dropped 8.8% on a total sales increase of 15.6% (up 31.9% in cars); and Nissan’s truck sales dropped 10.2% on a total sales increase of 8.4%.

Echoing GM Chairman and CEO Rick Wagoner’s comments about a structural rather than cyclic shift in the US auto industry (earlier post), Chrysler Vice Chairman and President Jim Press said today that:

There is a new era emerging in the restructuring of the American economy. There is an unprecedented shift in the industry that is challenging, but we are determined to provide consumers what they need and want.

June 3, 2008 in Sales | Permalink | Comments (31) | TrackBack (0)

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Comments

Wow. It just took about 4 month to get the truck sale back to the 1996 and the drop is likely to continue. Hopefully the factories will be easy to convert for production of smaller cars so that the damage can be minimized. Otherwise bankruptcy is a possibility. This is extreme times for the US auto industry.

Yes. Extreme times for all domestic makers even Toyota and Nissan. They are not selling as many of their trucks as well and need to cut back.

Hopefully they can convert the truck lines into car lines quickly. Small cars are moving off the lot quickly. Prii are near impossible to find near me.


my (lightly modified) colorado gets 27 highway mpg. just goes to show you that if the auto makers wanted to, they could produce higher mileage vehicles, even light trucks. the tuning on these trucks though is just atrocious, and more ppl are opting for large v6's (and with dodge, v8's even!) that they will never use..

GM makes trucks no one wants, then is hoping for a public bailout 'to save jobs' ...
The Canadians should kick GM out and give the next handout to a car company that makes the sort of cars people are buying.

Are Americans going to show the world that they can change very quickly?

Another 12 months like that and gas guzzlers may be on their way out.

Let's hope that we will switch equally fast (and even faster) to Hybrids and PHEVs + BEVs, when available.

Will manufacturers be able to keep pace? Hybrids are hard to find.

I read today that there is a massive flood of applications for renewable energy projects in the SoCal deserts. The agencies have gotten so many they've had to turn them down just for the sheer volume. This includes both solar and wind energy projects.

When Americans smell money, they'll move very fast indeed.

One solution to keeping these trucks off the lot is retro-fitting for operating on natural gas. Natural gas is not expansive and is green out of the pipe. It would cost 1500-2500 for manufacturers to retro-fit them, sounds like a no-brainer since they are giving thousands in rebates.

Also smart tuning and these trucks could be allot more efficient.

Here's one major problem with pickups, they are tuned for potentially being loaded. What they should do is provide the driver with a switch for economy/loaded. Under economy mode timing and fuel could be pulled substantially across the band, run it hotter run it leaner which will return more mpg, and when loaded it will deliver good performance too.

All this could be done cheaply for them, I would say natural gas + good tuning switching would cost under 5k for manufacturers, and it would keep the current models off the lots until more efficient smaller ones get here.

don't you think?

well, today GM just announced that they would close 3 factories. One in Canada, the US, and Mexico. The Oshawa CA plant built trucks for sale in the US and they are not retooling it.

CEO Wagoner noted that higher gasoline prices represent "a structural change, not just a cyclical change."

Actually I do think that today's prices represent in part a cyclical cycle as well as representing the reality of burgeoning demand in other markets. Prices will stabilize after a lot of pain and suffering. Too bad the people who were so called in charge didn't realize this would happen again. You'd think anyone who looked at what happened in '73 would've realized how precarious it is to depend on ridiculously low gasoline prices.

In Europe, many large vans come 2.5L turbo-diesel six cylinders and mid size vans come with 4 cylinder turbo-diesels. Furthermore, vans are more aerodynamic than pick-ups because they do not have an open back, which creates more drag (this also means that stuff doesn't fall out and litter the highways and cause accidents). I think we are likely headed in that direction over here. Either the manufacturers currently present in the US will have to start making vans like that or European manufacturers not currently in the US will start bringing them over.

@ AYM
GM will close 4 plants -not 3-
2 in USA, 1 in Canada and 1 in México.

http://www.treehugger.com/files/2008/06/gm-general-motors-closing-down-plants-suv-trucks-volt.php

All the cost of doing business. Shut down the non-productive and expand the productive. GM just committed to investing 9 billion Euros to expansion of Opel brand. That's a lot of money for any company to put up.

Finally it looks like all the phony blue collar truck drivers will be getting into cars. Gotto grow up some time.

If the last part of the graph was plotted with the same scale as the rest of the graph then you would have a vertical dive for the sales of Truck (which makes me more than happy since I hate all these ugly truck and SUV).

Anyway GM seems determined to do the move, Ford is lagging but have the FOCUS and an Hybrid platform, but Chrysler is deep in the big caca. They don't have a subcompact or a compact model like Ford and GM to sale during the next 2 years, and apparently they don't have anything annouced either like the Volt or the Prius...hmm maybe "big 3" will become "not so big 2"

Look what a modest increase in gas prices accomplishes.
Imagine if we had a forward thinking government that taxed gas to this level after 9/11.

Surprisingly, Ford and GM are actually well-positioned to take advantage of Americans buying small cars. The solution is to simply start producing the European product line of Ford and GM here in the USA, which is not a bad idea considering the popularity of those models in Europe.

Imagine if we had a forward thinking government that taxed gas to this level after 9/11.

I imagine those congressmen and women would have found themselves unemployed after the 2002 elections.

You don't have a thinking government for 8 years, but at least you have a sinking government now :-)


http://s.wsj.net/article/SB121207677528729631.html

Norway's Think Global plans to launch an electric car, called the Think City, in the U.S. in 2009.
The Oslo-based electric carmaker, which recently set up a U.S. office in Menlo Park, Calif., is trying to determine what geographical areas to focus its sales activities on, with an aim to launch the car – the Think City – in 2009. Think, a Ford Motor Co. unit until the U.S. auto maker sold it to a Norwegian company in 2003, is also searching for a site in the U.S. and Mexico to assemble the car.

It really doesn't take much to get better gas mileage from one of these light trucks, any DIYer could do it with stuff from a Home Improvement store. This guy here- http://www.evworld.com/article.cfm?storyid=870 -got a 28% improvement in gas mileage. And that's just from the aerodynamics, imagine what you'd get if you're good with engines. Read it! Its worth it.

You're right treehugger.

Got an earlier newsfeed that only had 3 plants closings announced. Gotta wonder how much more carnage will be seen as time passes.

And this is just the start id expect alot more closings in the next 4 years and likely an across the board paycut as well.

Raymond,

You are correct. One reason multinationals keep their stability in downturn markets is an ability to quickly adjust product lines. In this case if small is beautiful all of a sudden (it should be) GM and Ford have popular brands selling in Europe. And with GM investing $13.5 Billion in their Opel division - it is clear they plan to sell a lot more small cars both in Europe and the U.S.

Part of the plant closings are to accommodate the 19k employees they jettisoned to early retirement. The transition to electrification along with emerging markets will raise the volume of sales for all but the worst auto makers.

Personally, just from anecdotal evidence, the demand for trucks is still there, and I think it's stronger than what reflected in the numbers. The sales figures here may reflect more on poor consumer confidence, rather than aversion to trucks. Also, the current panic and the glut of used trucks certainly didn't help.

Recession or not, but if the events happened that price of gas is going to plateau for awhile (say 6 mos or cheaper gas in winter), I'd not be surprise that short-term memory loss will occur, and a surge in truck sales will happen again.

I'd rather like to look at the total light truck sales for the whole 2008 before I'd say that it's the end of the truck era for Americans.

Well, I think we found the breaking point and it seems to be a lot lower than the $5-$10 a gallon some suggested. Looking at the latest (since January) run up in the price of oil and the susequent rice in fuel prices. It seems that around $3.00 a gallon was what it took to change peoples vehicle buying behavior. This switch to cars over trucks will have some dramatic results that have already begun to show. Demand for distilates and gasoline is dropping and the days supply is increasing. The National MPG Avg will go up and the Summer driving season will have a much smaller impact this year. The fact that these cars are replacing legacy trucks will change things for at least the next couple of years. The price of oil has dropped to $122PBL and is falling.

the first and hardest hit by the housing slump has been people who build houses. these people almost exclusively drive trucks.

maybe a large portion of the drop in new truck sales has been because the people who build houses have put off truck purchases because of economic uncertainty.

the disappearance of Home Equity Lines of Credit (HELOC) has also damaged the high end sales of all types of vehicles. it'd be worthwhile to see what proportion of truck sales were made using money from a HELOC.

Our behavior vis-à-vis transportation is beginning to change, but I have yet to see the average driving speed decrease appreciably on the highways near me. The 2nd power law of air resistance (drag=kv2 where V is the velocity and K is the car shape constant) makes speed reduction the best fuel saver. When I see a rash of traffic tickets being issued for failure to meet the minimum speed limit, then I’ll then know that we’re there

Axil

I'm not sure we will see a drop in MPH. The need, even the perceived need to be somewhere by such n such time overrides the reduced speed savings. A few will slow down, but almost no-one adhered to the 55mph speed limit the last time.

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