Trucks are extremely popular in America, and almost everyone loves them. While trucks continue to be a great buy for the working class, modern trucks are also becoming great options for richer folks. This has led to a boom of truck sales for automakers, so much so that it’s helping make many of them profitable.
The incredible growth of the full-size truck sales
According to a recent report from Edmunds, full-size trucks have simply become the most popular car segment in America. Not only that, but full-size trucks have also made a great comeback from the Great Recession.
Back then, gas was at a premium, and many folks also didn’t have the money to spend on a fancy truck. As a result, only about 1.1 million full-size trucks were sold in 2009, according to Edmunds.
However, a decade later in 2019, that number has more than doubled to over 2.4 million full-size truck sales. Not only that, but as Edmunds wrote, automakers are also offering far more amenities and options on their truck than before, and this has also led to more people buying their trucks.
Furthermore, some automakers, like Ram in particular, are using smart marketing strategies to get people hooked on trucks. Edmunds reported that about a third of all Ram trucks were leased, which is the highest leasing rate in the industry. This has allowed Ram to be far more popular with younger drivers than other truck brands have been.
How profitable trucks truly are
Another thing that Edmunds found was that customers spent a lot of money on their full-size trucks. This is mostly due to the fact that more people outside of the working class are buying trucks, and they’re often equipping their new trucks with a lot of options. Those options, of course, will add to the final price tag of those trucks.
For example, Edmunds said that the average transaction price for a full-size truck in 2019 was a staggering $49,888. The rest of the auto industry only has an average transaction price of $37,310, which means that the average full-size truck is being sold for about $12,500 more than the average non-truck. For automakers, this means a lot of profit, and for customers, this means a lot of extras and amenities.
This extremely high average transaction price, when combined with how many full-size trucks are sold every year, has allowed full-size trucks to dominate American auto sales. Edmunds reported that, in 2019, roughly $125 billion worth of trucks were sold. This made the full-size truck segment the best-selling segment by a wide margin.
Why automakers won’t be complaining anytime soon
Automakers like Ford see this as a blessing and a curse. On one hand, this incredible truck market has made Ford and others a lot of money. On the other hand, if this truck market collapses, then Ford and other automakers will be in serious trouble. That’s exactly what Edmunds said in its report. Edmunds wrote that truck sales are “highly correlated” with the economy.
This correlation doesn’t exist when it comes to sedans and SUVs, according to Edmunds. What that ultimately means is that, when the economy is strong, the truck market is strong. And, while the economy was certainly strong in 2019, the same can’t be said about 2020. The COVID-19 pandemic has done severe damage to the economy, and automakers are suffering as much as anything else is.
That’s probably why automakers won’t be complaining about rising truck sales anytime soon. Right now, that’s exactly what those automakers want. More truck sales mean more profits for them, and unfortunately, many people probably won’t be buying a brand-new $50,000 truck anytime soon.