Minor Miracle: Truck Sales Are Up

Matt Posky
by Matt Posky
minor miracle truck sales are up

With some analysts now estimating the coronavirus outbreak’s cost to the automotive industry at as much as $100 billion, there’s not much reason to hope for any vehicle segment to trend in any direction but downward. However, domestic pickup sales have surprised us.

Despite the industry taking it on the chin overall, domestic truck sales are actually improving in the United States — at least by the measure with which we gauge domestic sales performance. Seeing the writing on the wall last month, domestic nameplates began incentivizing product like wild. Apparently, bargains ride two-up with the lead horseman of Pestilence. That, in combination with southern states being slower to enact social distancing measures, helped prop up truck sales. While that may result in the region having a longer recovery, it seems to have padded the market’s fall ever so slightly.

Automotive News quoted Cox Automotive as saying March’s incentive offers were uncharacteristically intense. Discounts typically appear at the start of a month and wrap by the end for more accurate assessment of their effectiveness (though that’s happening more internally as automakers abandon public monthly reports). But most of the factory incentives last month commenced in the middle of March as manufacturers finally realized COVID-19 was set to obliterate both output and sales.

Brad Korner, general manager of Cox’s rates and incentives program, said many of last month’s offers will remain active for at least another few weeks, as automakers were still evaluating how consumers responded to them. However, Asian manufacturers that still report every month aren’t offering much promise. Cox said they all endured sales declines of between 31 and 48 percent though March.

Pickup volumes only appear to be riding a temporary wave aided by impressively low fuel prices, the swap to quarterly reporting, regional delays in social distancing measures and appetizing deals with financing options stretching all the way out to 84 months. In the last days of March, domestic brands had incentive spending averaging around $7,200 per car.

From Automotive News:

As sales dried up at dealerships around much of the country starting in mid-March, there was far less disruption in states such as Texas, Florida and Georgia, where governors were slower to put restrictions on residents and businesses. March pickup sales were exactly in line with J.D. Power’s pre-coronavirus forecast in the Southeast and off just 1 percent in the South Central region. Meanwhile, sales in the Northeast plummeted 29 percent below expectations.

“As some states put strict social distancing orders in place, others were business as usual, and for us, that meant truck sales continued,” a GM spokeswoman said.

The coming months could prove more challenging for all vehicle segments, including pickups, as more states restrict commercial activity and tell residents to cancel all nonessential travel. Markets where stay-at-home restrictions are in place “typically show an 80 percent reduction in sales from the baseline forecast shortly after orders are enacted,” J.D. Power said.

Ford’s F-Series still ended up as America’s biggest overall seller, though it lost 13.1 percent in the first quarter vs the previous year. By comparison, Chevrolet’s Silverado surged by 26.6 percent in Q1 while the GMC Sierra improved by 30.7 percent. Ram’s combined truck sales (which includes the Ram Classic) also rose 7 percent. Barring a miracle where COVID-19 suddenly dissipates, no one expects Q2 to be quite so healthy. While incentives will probably remain in place, the sudden surge in unemployment and continued social distancing efforts are expected to tamp down volumes dramatically through April.

[Image: General Motors]

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3 of 9 comments
  • Robotdawn Robotdawn on Apr 06, 2020

    Scout, take a look at the Jeep Wrangler sales when they did the same thing. They fell off a cliff.

  • CKNSLS Sierra SLT CKNSLS Sierra SLT on Apr 06, 2020

    So-as a detractor of the redesign of the 2019 Silverado half-ton-(the reason I bought a 2018) the sales slipped after the redesign. Now-apparently the potential buyers either have become use to the look-or the discount around here is between $14,000 to $15,000 off sticker, and that's enough to where they don't care about the clunky right and left front fenders of the truck.

  • StormEagle 400 miles range
  • Inside Looking Out Enforcing laws? It is so yesterday! Welcome to California!
  • Lou_BC You'd think cops would have an understanding of the laws they are supposed to enforce.
  • Merlyn I’m on my second Spark and love it! I can pass any car I’ve never had a problem going up a hill it does just fine. As for cargo I can fit three suitcases, two book bags and still have the front seat for a passenger. Not sure what point this guy is trying to make. I have hand free phone service and Sirius radio plug in my phone and have navigation. I would buy another spark in a heartbeat.
  • Buickman I won't own one and I'll be happy!