Pickup Industry

The pickup truck industry has experienced a tremendous decline in sales over the past 6 years, down to 12% of total light-vehicle market from 23% in 2005, and at the lowest point since 1980. The main causes of the decline in sales are: high gas prices, high unemployment rates and dormant housing industry. Pickup trucks are up 17.9% from the same months in 2010, however, total vehicle sales have increased 19.4%, so pickup trucks are increasingly losing market share. In 2005, the pickup trucks best year, unemployment was 5% and gas prices were $2.28/gallon. This led to many people buying pickups for personal use. However, now there is 9% unemployment and $3+/gallon gas prices which have led to the 50% decrease in sales. With a long term trend of rising gas prices, consumers are shifting into the small car and hybrid market, and away from light-trucks. Purchasing a motor vehicle is usually financed through credit. The cost of credit is primarily determined by interest rates, so the purchase of automobiles is negatively correlated to interest rates. The luxury automobile segment is becoming increasingly important as the baby boomers are reaching their highest income-earning age. While the automobile industry is forecasted to grow as a whole in the next five years, due to environmental concerns as well as gas prices, pickup trucks are losing traction in their market share; however, sales are still likely to increase.

While the automobile industry is forecasted to grow as a whole in the next five years, due to environmental concerns as well as gas prices, pickup trucks are losing traction in their market share; however, sales are still likely to increase.