Windecker

Pickup trucks are true American icons.

Also, they have earned vast amounts of money for their manufacturers while providing for both the real and perceived needs of their buyers. Pickups are volume products, averaging for the past five years, 3.1 million sales in the United States. As job-providers for many tens of thousands of automotive industry workers, pickups carry a heavy economic load.

Unlike SUVs, pickups come in only two basic sizes, compact and large. For the past few years sales of the more aggressively marketed large units have pushed awareness of the compacts into the background. It has not always been so as illustrated in the accompanying table.

Large pickups hit a record 14.5 percent of all U.S. vehicle sales in 1978, a year of economic exuberance and little incursion by the compacts. That peak was quickly followed by an economic dip and growing sales of compacts, causing low shares for both the large and total pickup categories.

In 1978, large was good, but new domestic compacts were on the horizon and gasoline prices doubled through the early 1980s. By 1986, the large-pickup share of industry had been halved.

In 1986 and 1987, compacts, pushed by new domestic models, high fuel costs, young buyers and faddishness, outsold the large variety. Quickly, in 1988, gasoline prices subsided, the youth market moved on, the fad quotient dissolved and America’s big-is-better mode returned. In 1988, large pickups regained their ascendancy.

Following the 1988 crossover, compacts continued a general pattern of decline in both market share and volume. Concurrently, and more than offsetting the compact decline, sales of large pickups accelerated sharply through 1996, benefiting from relatively stable gasoline prices and decent economic growth while suffering only a moderate share loss from the relatively short-term fuel cost and economic activities. The 1997-2001 years brought only modest share gains to the large pickups.

Following the 1998 total-pickup peak of 19.1 percent of the combined car/truck industry, the total pickup market has declined as large pickups were unable to offset the again declining compacts, particularly in recent months as the large units began to lose share.

Apparent in the data are basic patterns: compact pickups first driven by new-product aura, lower prices, high fuel costs, youth and faddism, peaked in 1987 and then, quickly buffeted by the obverse of those factors declined quite rapidly. Yet they remain a reasonably attractive market as their 2002 sales reached 796,000 units, despite receiving only moderate product and promotional support.

The large-pickup pattern is equally discernable: consumer economic exuberance confirmed by high or record total automotive industry sales, low or consistent gasoline prices within inflation rates and the concept that big is better pushed the large pickup market upsurge through 2001. Today in the early months of 2003, the industry is working within a less than exuberant economy, upward gasoline prices, a rather shrill attack on bigness, softening leading indicators, threatening CAFE actions and a major imponderable in the Persian Gulf.

The indicators are not showing kindness to large pickups, Toyota is becoming more aggressive, Nissan is about to enter the market, Ford is revamping the F-Series and the rule of 100 percent exists (see AI, pg. 16, January, 2003). The large-pickup segment is facing considerable stress.

The compact units should, under the current circumstances, if not gain share, at least moderate or cease their downtrend. It is a generally accepted rumor that General Motors has new compact pickups coming online in a year or so, but there are conflicting reports of only minor makeovers from the other manufacturers, hardly a scenario for a compact-pickup segment rebirth.

There is reasonable evidence that the aura of the large pickup has recently dimmed, that they are under additional pressure and the compacts are a weak junior partner with little of the current marketing muscle that would be required to take up any additional slack from the large units. However, it would be premature, based only on the 1998-2003 total pickup decline, to see the 1998 peak and subsequent decline of the total-pickup market as an early warning of a truly significant culture change. But, the shortterm movement bears watching.

Again, the near-term imponderable is the Gulf. A quick resolution would help settle the consumers’ nerves. A drawn-out process would not be helpful. Stay tuned and stay alert.