It appears that the housing recovery is having a positive effect on more than just the housing industry. According to GM and Ford, the housing recovery in the US boosted the sales of pickup truck by 16% during the month of August. And, they’re both confident that this trend will continue.
Kurt McNeil, the US Sales Operations Vice President for General Motors spoke about the company’s August sales on Tuesday. According to McNeil, the housing and auto industries are the brightest parts of the economy. McNeil revealed that GM pickup truck sales were 10.4% of their total sales in July. In August, this number increased to 10.9% of total sales. GM is expecting truck sales to increase to 12% of total GM sales by the end of 2012.
Housing Market Correlates with Pickup Truck Sales
In the past, US housing market conditions have always been in close correlation to pickup truck sales in the country. That’s because when the housing market grows, industry workers buy new trucks to accommodate their jobs. Workers such as contractors, plumbers, carpenters, electricians, roofers and others need trucks to move supplies related to their part in the of the home building process. In general, the second half of any given year is the time when sales go up for pickup trucks. Experts say that “truck month” in the US is actually September. And, with new home starts increasing, these sales will increase much more than in recent years.
Ford is also very optimistic about the way their pickup truck sales have been going. According to Jenny Lin, an economist, Ford truly believes that the US housing market recovery plays a continuous role in supporting sales of their full-sized pickup trucks. They believe that the combination of entering into their high season for selling pickup trucks, and the growing need due to home building, they will see strong sales this season.
The Ford F0150 is the #1 best-selling vehicle in the US, increased by 19 percent in August. This took the number of F-150s sold to 58,201. The #2 best-selling vehicle in the US is the Chevrolet Silverado. Silverado sales increased by 4 percent in August, climbing to 38,295 sold. The Dodge Ram pickup truck is both the #8 best-selling vehicle in the US and the #1 best-selling vehicle of the Chrysler Group. In August, Dodge Ram sales rose 19 percent to a impressive 25,215 sold.
The Detroit Three Pickup Truck Sales
The Detroit Three are commonly known as the three biggest automakers in the US. They are Chrysler, General Motors (GM) and Ford. All three saw pretty decent sales increases during the month of August, causing good reasons for positive outlooks in the auto industry. But, they’re not the only ones seeing sales increases when it comes to pickup truck sales. The combined total August sales of pickup trucks for the Toyota Tacoma and the Toyota Tundra were up by 53 percent, to a promising 23,540 sold.
Although pickup truck sales still aren’t what they used to be, neither is new home construction. Auto industry experts say that sales began to decrease when the housing bubble burst. Now, as the construction of new homes is beginning again, so are pickup truck sales. The more homebuilders start on new contracts, the more automakers are seeing their sales increase.
Pickup Truck Sales Expected to Increase Even More
Wall Street Journal online has reported a 13 percent increase in pickup truck sales by the Detroit Three. They predict that this number will increase substantially come December. This is the month when sales are the highest because of the tax benefits that come with making these types of purchases at the end of the year. These increases in sales also increase operating profit for the automakers. Higher operating profits can mean additional jobs within the auto industry, which can help to heal the US economy as a whole even more. More jobs mean more spending. More spending heals the economy faster, which will lead to more US home sales and a higher demand for homes. Increased home demands leads to even more new home construction which, you guessed it, leads to even higher pickup truck sales.
This is yet more proof that the US housing market recovery has a direct effect on the country’s economy in general. Just about every major industry in the US is in some way effected by home sales and new home construction. GM, Ford, Toyota and other pickup truck manufactures are very pleased that the housing market is healing because new home construction is giving them reasons to celebrate in 2012.