U.S. Auto Sales: Midsize Pickups Stage Full Recovery As States Let Down Their Guard

You read earlier this week how midsize pickups, despite adding the Ford Ranger and Jeep Gladiator to their ranks, suffered in terms of market share this year. It’s been a wild ride, these past few months, but the biggest strike against the purchase of a midsize truck remains the same as before: the existence of full-size trucks — which automakers seem far more likely to discount, boosting their vehicle-per-dollar proposition.

Especially in these pandemic times.

Detroit moved an unexpectedly large number of half-tons over the past two months, greasing the wheels via a sudden love affair with zero-interest, 84-month financing. Full-size trucks dipped instead of dived, but midsizers have now picked themselves up and dusted themselves off.

Not in terms of overall sales, mind you, but in terms of current volume versus pre-virus forecasts. Midsize pickups are the only segment to show a higher-than-forecast sales figure for the week of May 10th, J.D. Power data reveals.

After falling 48 percent below forecast in the week ending March 29th, retail sales of midsize pickups rebounded to 3 percent above forecast last week. In contrast, full-size trucks, which fell no more than 25 percent during the depths of the Great Lockdown, ended last week down 10 percent (after nearly reaching parity the week before).

Easy financing is great, but dwindling inventory levels are beginning to hamper sales of big Detroit trucks. Ford, Fiat Chrysler, and General Motors can’t get their pickup plants online fast enough.

The situation is different with midsizers, which works to their present-day advantage. There’s also a good inventory of, say, compact cars out there — and will be for some time, it seems. After taking the hardest hit during the lockdown, compact mainstream car sales remain depressed to the tune of 44 percent. (Compare that to an average of 25 percent below forecast for the top five segments.)

Overall, retail sales in the U.SD. last week were only off pre-virus forecasts by 26 percent; much improved from the 59-percent plunge seen at the end of March. Only six states still allow only online or remote sales. Twenty-eight states, representing 58 percent of the country’s 2019 sales volume, have allowed dealerships to reopen, with 16 more allowing dealership visits by appointment.

With the easing of lockdown measures comes greater volume across all segments and in all markets. Some cities, like Dallas and Phoenix, barely registered a blip during the lockdown, whereas hard-hit locales like New York City, Philadelphia, and Detroit saw sales sink to essentially zero. That’s (hopefully) all in the past now, as even New York has crossed the 50-percent threshold on the way to normality. The city’s sales last week were 48 percent below forecast. Detroit and Philly saw sales volumes 29 and 34 percent below forecast, respectively. The same figure applies to San Francisco, another hard-hit market.

As the full-size pickup’s share of the retail mix shrinks, average transaction prices and incentive spend per unit has seen a corresponding decline. It’s not that discounts are shrinking — just the size of the vehicles in the growth segments. Foreign automakers have stepped up their discounting game, J.D. Power reports, helping mainstream non-Detroit Three vehicles take the lead again. As of May 10th, this cohort amounted to 47 percent of the U.S. retail market, up from 45 percent the week before.

Mainstream Detroit Three vehicles made up 41 percent of the mix, with premium vehicles holding steady at 12 percent.

[Image: Ford, General Motors]