Trucks at Work

Are strong pickup sales a recovery signal?

A post to the “Driver’s Seat” blog on the Wall Street Journal caught my eye the other day, as it postulated that the sustained strength of pickup truck sales here in the U.S. may be a “top indicator” of an economic rebound.

Whether that’s true or not remains to be seen, but one definite ripple effect is that some vehicle makers are beefing up their manufacturing workforce to handle light truck demand – an all-important move in terms of job creation for this country of ours.

For example, take Ford Motor Co.: It’s U.S. vehicle sales overall in April were up 18% compared to the same month last year – the best April sales numbers Ford’s seen since 2007, it noted – with sales of cars up 21%, sport utility vehicles 16%, and trucks up 16%.

Yet the Ford F-Series pickup alone posted a whopping a 24% increase in sales last month to 59,030 units – the best April sales results for the F-Series since 2006 – with demand up 19% year-to-date; numbers that convinced Ford to add workers to its Kansas City assembly plant to further capitalize on that demand spike.

"F-Series pickups continue to build on their momentum as the housing and construction industries rebound,” noted Ken Czubay, Ford’s VP for U.S. marketing, sales and service. “The full-size truck segment growing three times faster than industry average and is fastest-growing segment this year.”

Thus the automaker is adding more than 2,000 jobs at its Kansas City facility to support high demand for Ford F-150 plus the planned production of its all-new Transit family of commercial vehicles starting next summer; with more than 1,000 of them brand-new hires.

[The breakdown follows: 900 assembly line jobs and a third shift to be added the third quarter this year to build F-150 models, with another 1,100 jobs to start in the fourth quarter in large measure to prepare for Transit full-size van production in 2014. The plant currently has 2,450 hourly workers working on two shifts.]

Ford added that such “plant expansions” create major impact in local communities and beyond. For instance, the Kansas City assembly facility is supported by more than 250 suppliers nationally and more than 10 suppliers locally – all of whom benefit from the addition of a third production.

Additionally, when Transit production starts next year, close to 275 suppliers nationally and six suppliers locally will grow their business; creating what Ford calls a “job multiplier effect” of nine jobs to every one or more than 18,000 jobs created just to support the plant’s ramp-up efforts.

But it’s not just Ford seeing success from the light truck sales surge: indeed, all makers of light trucks in the U.S. are experiencing a hefty uptick in volumes.

Chrysler Group LLC, for example, said its overall vehicle sales jumped 11% in April to 156,698 units –the group's best April sales figures since 2007 – with Ram Truck brand sales up 49%, which is the largest April percentage sales gain of any Chrysler brand.

Sales of light duty Ram pickups jumped 54%, said Chrysler, driven by the Quad Cab models, while heavy duty Ram sales climbed 30% and Ram Cargo Van set a sales record for the month of April with a 110% sales gain versus the same month in 2012.

General Motors did some bang-up business as well in April, selling 237,646 vehicles overall in the U,S, this past April, up 11% compared with a year ago.

“Car-buying conditions are strong and will continue to release pent-up demand,” said Kurt McNeil, GM’s VP-U.S. sales operations, adding that the company is “very optimistic” because important car and truck launches are just getting underway, with its all-new 2014 Chevrolet Silverado 1500 and GMC Sierra 1500 crew cabs due to start arriving in dealerships this summer.

He noted that by type GM’s April sales of crossovers jumped up 14%, while truck sales – including pickups, vans and SUVs – climbed 17% and car sales increased 6%. Yet large pickup sales shot up 23%, the automaker noted, helping push its estimated retail segment share up more than one percentage point and its total share is up almost a point.

Even Toyota Motor Sales U.S.A. (TMS) – the U.S. division of Japan’s Toyota – witnessed a truck sales spike despite an overall falloff in vehicle sales.

TMS said its April total vehicle sales dropped 5.4% to 158,069 units year-over-year on a daily selling rate (DSR) basis while volume-wise sales were off 1.5% percent versus April of 2012. Yet the division’s overall trucks increased 11.4% in April to nearly 70,000 units, with the compact Tacoma continuing to lead its segment with sales of 12,971 units, up 19%, while the bigger Tundra model racked up sales of 8,276 units; an increase of 14.6% versus April of last year.

“From an industry standpoint, continued retail sales growth indicates the underlying strength of the market, which is a great sign for the months ahead, especially with new products, low interest rates and plenty of pent up demand,” said Bill Fay, TMS’s group VP and GM.

Let’s hope those indicators bode well for the overall economy, too. 

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