Pickups Can't Do the Impossible, but They're Keeping the 'Buy American' Crowd in the Majority

Rarely are week-to-week sales a useful yardstick of industry (or brand) performance, but the past month’s upheaval has changed that view just a bit.

We told you last week how, despite the U.S. car buyers staying away from dealerships in droves, pickups fared significantly better in late March than any other segment. The drop in sales for these must-have machines, while still steep, paled in comparison to other types of vehicles.

Not surprisingly, that decline continued in the past week. Still, with loyalty among domestic buyers sitting at a two-decade high, Detroit’s grip on what’s left of the market remains secure for now.

According to data compiled by J.D. Power, Sunday, April 5th saw retail sales fall 84 percent compared to a year earlier. Last week, the industry contracted 59 percent compared to pre-virus forecasts, and light-duty pickups followed the downward trend. While the segment ended March on something of an upswing, volume loss last week was considerable — despite it being half that of the industry as a whole.

With buyers visiting remaining dealerships choosing trucks at a much greater rate than anything else, the Detroit Three closed the week with 50.8 percent of the country’s retail volume. That’s down slightly from last week’s 51.1 percent. A surge in zero-percent financing offers and 84-month loan terms have helped Fiat Chrysler, Ford, and GM retain as much of a dwindling market as possible; customer loyalty hasn’t been this high since the Bush administration.

How loyal are Detroit Three owners? Last week, 83 percent of Detroit Three owners or lessees who swapped into a new vehicle drove off in another Detroit Three product. That’s down 1 percent from a week prior, but it shows the power of pickup brand loyalty, and what can happen to stats when one group of car buyers stays home while the other continues shopping. Loyalty among the non-Detroit Three crowd was 74 percent, down nearly 10 percent from a month earlier.

“Strong messaging is attracting current Detroit 3 vehicle owners and helping them to remain loyal and is also enabling conquest of major competitors,” J.D. Power stated.

The message FCA, GM, and Ford want to get across? If no-interest, long-term loans can’t get you through the door, there’s even more cash waiting on the hood.

Surpassing the previous week’s record incentives and average transaction price, the industry spiffed its way to a new high water mark last week. Average incentive spend per vehicle, industry-wide, was $5,100 (up $300 from the week ending March 29th). Last week’s record ATP rose $800 to $36,300. For light duty pickups, average incentives amounted to $7,300 per vehicle — up $100 from last week’s record.

How high can they go? With stay-at-home orders expected to last through the month, if not longer, we won’t have to wait long to find out.

[Image: Fiat Chrysler]