How truck sales track the economy

July 28, 2014

Sunset Ford of Waterloo is shown on Sunday, July 13, 2014. (Photo by Nikki Kahn/The Washington Post)

Economic forecasters are always looking for canaries in the data — indicators that can foretell, or at least give a snapshot of the economy. Sales of light trucks like pickups or SUVs are a favorite measure because they reflect both business optimism and a particularly potent kind of consumer exuberance.


The traditional type of light truck buyer is a company that needs pickups or cargo vans to haul materials or crew. Perhaps business is looking up, or the company is coming into enough profit that it can replace its aging fleet. Many buyers are contractors, landscapers, plumbers, electricians, or in some other way linked to the construction industry. For this reason, light truck sales often rise and fall with the number of new homes constructed, and the auto industry watches the housing market closely to predict demand for trucks.

The other type of light truck buyer is a suburban warrior making a passion purchase. SUVs and pickups are larger than life typically demands, but in flush times consumers have the means to satisfy this less-than-rational yearning for steel and horsepower.

The uptick in truck sales not only means increased consumer confidence, but also a fat bonus for automakers. Pickup trucks in particular are massively lucrative for Detroit, generating as much as 10 times the profit of a small car. No wonder that auto companies are rolling out more luxury packages for their pickup truck lines in an effort to reel in those who don’t haul 2x4s for a living. The F-150, for instance, may be ordered with a moonroof, 22-inch aluminum rims and massaging leather power seats. It’s a Porsche for the practical-minded profligate, and it can cost nearly as much as one.


These days though, gas-guzzlers are becoming somewhat of a harder sell, which is why Ford is switching its F-150 from a steel to an aluminum body. The 700 pound, or 15 percent weight reduction will help the truck get perhaps a couple more miles per gallon (the EPA has not yet issued its test results).

Jeff Guo is a staff writer for Storyline. He's from Maryland (but outside the Beltway). Follow him on Twitter: @_jeffguo.
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Todd C. Frankel · July 28, 2014