The veritable explosion of pickup truck sales during the first quarter this year– with the sale of full-size pickup trucks up 26% to date year-over-year according to Kelly Blue Book’s Automotive Insights – is being driven by a host of factors, according to industry experts, but the vastly improved fuel economy and greater electronic “connectivity” are two major reasons, according to industry experts.
“Nearly every major pickup truck manufacturer – General Motors, Ford, and Chrysler– introduced a new redesigned pickup in the last year with better fuel economy, driveability, and new interior technologies,” James Bell, head of consumer affairs for GM, told Fleet Owner.
“Better fuel economy is a real driver here: we’re talking about 23 miles per gallon in highway driving,” he added. “That’s the kind of math that can significantly change total cost of operation (TCO) calculations for commercial users.”
The official fuel economy numbers released by GM for back in April for the 2014 Silverado, based on the use of 87 octane gasoline, are: 16 mpg city, 23 mpg highway, and 19 mpg combined for its two-wheel drive versions and 16 mpg city, 22 mpg highway, and 18 mpg combined for four-wheel drive models.
Bell – speaking by phone from a GM event being held at the Knibbe Ranch outside San Antonio TX to introduce the 2014 Silverado “High Country” special edition pickup model – added that as the average age of pickup trucks on the road today now around 12 years old, replacement demand is also adding some extra juice to sales in this segment.
“That high average age means that many customers probably haven’t been to a dealership showroom floor in a while; they haven’t seen the fuel economy nor the capability available with today’s pickups,” he stressed.
Rebecca Lindland, an economic and automotive analyst with Rebel Three Media & Consulting, added that the overall economic climate is changing for the better for many businesses – especially small firms such as landscapers, contractors, electricians, etc. – that rely on pickup trucks.
For example, in the first quarter this year, new home construction increased 20% over 2012 – fueling demand for trades such as electricians, plumbers. She also noted that there have been net job increases for 30 consecutive months and household balance sheets have improved slightly with assets increasing and debts decreasing.
“More importantly, banks are starting to lend again, especially to small businesses,” Lindland pointed out. “So it’s that combination of things that helping release that pent-up replacement demand.”
Yet it’s the vastly better fuel economy and electronic “connectivity” in her opinion that’s convincing pickup owners to buy new vehicles, rather than hold onto their current trucks or look at used models.
“Pickups really are ‘mobile offices on wheels’ today, so the interior needs to have the ‘conveniences’ of multiple USB ports and 110-volt outlets for plugging in laptops and other electronic equipment,” she said. “Many small business people now work 24/7, too, so pickups must be designed to do so as well.”
GM’s Bell added that he doesn’t believe demand for the more capable pickup models being sold today will slack off anytime soon – one reason why GM is preparing to roll out a 6.2-liter V8 engine option for its new 2014 pickups later this year.
“I like to use a surfing analogy to explain it,” he said. “There’s a ‘huge wave’ coming in terms of demand and we, like most of the OEMs out there, are walking across the beach toward that wave with brand new ‘surf boards’ – in this case new pickup models – in our hands.”