Surge in pickups expected

One reason that demand for new pickups is expected to be high is that 27 percent of the full-size trucks on the road are more than 15 years old. This 1967 Chevrolet is a bit older than that, but those older pickups will have to be replaced at some point.



DETROIT — Auto companies are betting on a surge in pickup sales now that home building is on the rise.

Chrysler said recently it is adding 1,000 workers to its Ram pickup factory because it sees higher demand for the redesigned truck. Ford and General Motors also say truck sales are climbing fast after several years of small but steady growth.

Truck sales rise or fall with home construction, because they’re the vehicle of choice for contractors and construction crews, and there are growing signs that home construction and prices are in the midst of a steady recovery, said Tom Libby, the lead North American forecasting analyst for the Polk research firm.

Another encouraging sign: Home prices are rising in many markets.

“Almost every day there’s another report of a positive measure,” Libby said.

Another reason why sales could surge is the record age of trucks currently on the road. Ford Americas President Mark Fields said 53 percent of full-size pickups are now older than 10 years and 27 percent are more than 15 years. Many of those trucks will have to be replaced soon.

“You can see there’s a lot of pent-up demand out there,” Fields said at an industry conference. “There could be a lot of opportunity.”

Fields said full-size trucks have accounted for 11 percent of U.S. auto sales since 2009. That market share shot up rapidly in October to 13 percent, according to Citi analyst Itay Michaeli. He expects demand at that level for the next few months, especially because gas prices have eased.

Ford’s top U.S. sales analyst, Erich Merkle, wouldn’t say how much Ford has increased truck production to meet demand, but Ford’s overall car and truck production is up 7 percent in the fourth quarter to 725,000. As of Nov. 1, it had 238,000 pickups in its inventory, up from 192,000 at the same time last year, indicating it’s expecting a jump in sales. The F-Series pickup has long been the country’s best-selling vehicle.

Chrysler CEO Sergio Marchionne is predicting higher Ram sales because of the truck itself. The new Ram, which just hit the market, can get up to 25 mpg on the highway and has a host of new technology, including a system that automatically shuts down the engine at stop lights to save fuel. Ram sales were up 20 percent in October over the same month last year.

New pickups from GM, due out early next year, also will pique buyers’ interest. GM plans to release more details about the Chevrolet Silverado and GMC Sierra.

Polk expects U.S. sales of new cars and trucks to reach 14.4 million this year, up from 12.8 million last year. The company forecasts 15.4 million in 2013, so even if there’s no recovery in pickup sales, demand will increase simply because the overall market is growing, Libby said.

Chrysler said it was adding 1,250 workers and will invest $240 million in three Detroit-area plants to boost truck and engine production. The new employees would boost Chrysler’s global workforce to 63,450.

The hiring is another step in Chrysler’s comeback from its 2009 government-funded bankruptcy. The company, majority-owned by Italian carmaker Fiat SpA, is profitable again and has hired 12,000 workers since leaving bankruptcy protection in 2009.

Chrysler will add the workers at the War­ren, Mich., Ram plant in March. An additional 250 jobs could come to the Mack 1 plant, which will be retooled to make V-6 engines instead of a large V-8 made there currently. Production of the new engine will begin in 2014.

Chrysler said it has invested $4.75 billion in the U.S. since June 2009.



Fri, 11/24/2017 - 10:24

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