September 20, 2007
Competition drives pickup truck segment to a 20-month high in the U.S., says J.D. Power
Westlake Village, California – Competition among automakers is driving large pickup truck net prices closer together and leading to a 20-month high in market share in the U.S., says J.D. Power and Associates. The large pickup truck segment comprised 14.9 per cent of new-vehicle sales in August, the largest share of the market for the segment since December 2005.
“Incentives played a major role in large pickup sales in August,” says Tom Libby, senior director of industry analysis. “The heightened competition in this truck segment has caused a convergence of net prices, and the gap between prices for the seven large pickup models has narrowed from $4,800 in January 2007 to $3,400 in August.”
Incentive spending may also have affected large pickup truck owner loyalty in August. Loyalty, which is calculated on the number of owners who traded their vehicles for one in the same segment, was 74.2 per cent in August among owners of large pickups, the second-highest level in the past 20 months.
“We expect the aggressive incentives that we saw last month to continue if volumes are to be sustained,” says Bob Schnorbus, chief economist, J.D. Power and Associates. “The decline in the housing market is clearly having an impact on the auto industry, and pickups may be the most directly affected segment. With consumers fearing further declines in the housing market, the large pickup segment will continue to face considerable challenges, and incentives will be critical in softening the blow in the months ahead.”