Pickup Sales Are In Decline, Thanks to High-Interest Rates and Lower Spending - The Average Joe


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    Pickup Sales Are In Decline, Thanks to High-Interest Rates and Lower Spending

    Noah Weidner

    April 5, 2024

    America loves pickup trucks — even if their only cargo is family, friends, and groceries. For the 41st consecutive year, the Ford F Series was 2023’s most popular vehicle in the country, boasting 677K registrations. However, this nearly half-century love affair is suffering at the hands of the American economy.

    Built tough… but is it worth the price? American truck dominance is no longer certain as demand for pickups declines. With higher interest rates and dwindling savings, fewer Americans are willing to fork out $50K-100K for a fully loaded model, especially when the average price of a new car hovers around $47K. That’s bad news for Detroit’s auto giants, which rely on full-sized pickups to drive profits.

    • Ford ($F) witnessed a 10% plunge in truck sales in the first quarter — while Stellantis ($STLA), Ram’s parent company, faced an even steeper decline of 15%.
    • Both companies held more idle inventory than their competitors, with Ram boasting more than 101 days’ worth of pickup stock.

    Auto barometer

    Despite their differences, truck sales are starting to look more like EV sales — which have dipped as Americans have tightened their financial belts and embraced smaller, more affordable rides. This shift has prompted many EV automakers to slash prices and offer financing on preferred terms, but consumers are increasingly turning to more practical alternatives.

    • Compact SUVs and budget-friendly sedans are gaining traction, as evidenced by robust sales growth for Toyota’s RAV4 and Honda’s CR-V in the latest quarter.
    • Hybrids are also on the rise, with Ford experiencing a 42% surge in sales of light hybrid models, offsetting the drop in truck sales.

    Forward-looking: Legislative and activist calls to hike registration costs for heavy vehicles and impose aggressive emission fees could further inflate the price tag of America’s beloved F-150. However, despite these challenges, the pickup truck business may not be at the end of the road, especially if interest rates ease up.

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