Sales of big pickups are beginning to stall Web source: http://www.detnews.com/apps/pbcs.dll/article?AID=/20060222/AUTO01/602220374/1121/AUTO Half of full-size pickups on the market saw sales decline in 2005; nearly all stumbled out of the gate in 2006 Brett Clanton / The Detroit News In the often fickle auto business, where yesterday's hot seller can be tomorrow's discounted dud, sales of big pickups have remained rock steady in the face of gas spikes, economic downturns and changing consumer tastes. But despite a fiercely loyal customer base, full-size pickups have started to lose steam in what could be a troubling sign for Detroit's automakers. Half of full-size pickups on the market saw sales decline in 2005, and nearly all models stumbled out of the gate in 2006. Unsold trucks are piling up at dealerships, and several automakers, including Nissan Motor Co., have been forced to cut truck production. On Monday, Chrysler reopened a Dodge Ram pickup plant in Warren that has been idled for five weeks this year in the face of slumping demand. "You got people who are definitely worried about their jobs right now," said Matt Davidson, 48, a production worker at Warren Truck Assembly. Despite the recent slowdown, Detroit automakers say the full-size pickup category remains stable and declines are to be expected after record sales in 2004. "It's still the largest segment out there," said Joe Veltri, director of Dodge truck marketing and product planning at DaimlerChrysler AG's Chrysler Group. Even with fluctuations in sales, Detroit automakers say the category will remain strong in the coming years, with domestics holding their lead even as foreign rivals try to make deeper inroads. Protecting their turf in full-size pickups will be especially important to Ford Motor Co. and General Motors Corp. as they try to recover from losses in their home market, and to Chrysler as it seeks to keep its recent turnaround on track. Foreign automakers such as Toyota Motor Corp. also have placed huge bets on the full-size truck category. In such an environment, any slip in sales, no matter how slight, is taken seriously. That's why automakers are bending over backward to keep consumers interested, offering everything from comfy interior features and bigger cabs to improved fuel economy and added towing power. Analysts said the category's recent lackluster performance could be attributed to a range of things, including consumer wariness about gas prices, the rise of crossover SUV models and lack of interest in some designs that haven't been updated in several years. "How durable that softening is will be an interesting thing to look at," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. In 2005, full-size pickup sales accounted for roughly 2.4 million sales, roughly flat with the previous year. Though some of the biggest players slipped, including the Ford F-Series, Chevy Avalanche and Dodge Ram, Detroit automakers largely viewed the year as a success. "The category as a whole has held up quite well despite the spike in gas prices and all the other factors we had play out last year," said Paul Ballew, GM executive director of market and industry analysis. GM, whose Chevy Silverado and GMC Sierra saw gains, posted its best year in full-size truck sales since 1978. Ford, meanwhile, said it was only slightly off its 2004 peak of 939,000 with F-Series sales last year. But 2006 could be different. Even with a new Toyota Tundra and Chevy Silverado arriving late this year, full-size truck sales are likely to fall 6 percent as consumers tire of older models, said Tina Jantzi, manager of North American auto forecasting for J.D. Power and Associates. After this year, the firm sees full-size pickup sales growing slightly through the end of the decade. Yet the domestics are likely to lose market share in the segment as foreign competition intensifies. Now owning 91 percent of full-size pickup sales, the Big Three will slip to 89 percent by 2010, according to J.D. Power. "Let's just wait and see," said George Pipas, chief sales analyst for Ford, whose F-Series truck has been the best-selling full-size pickup for 29 years. Of more immediate concern may be rising inventory levels among full-size truck manufacturers. At the end of January, Chrysler had a 142-day supply of Ram trucks, Ford's F-Series stood at 124 days, and 122 days' worth of Nissan Titans were waiting to be sold. Though not uncommon to build up for the spring selling season, the numbers are well above the 60- to 70-day supply automakers prefer to keep on hand. Over the long term, Pipas expects full-size pickups to continue representing about 15 percent of the overall market. That's because truck buyers are considered among the most loyal vehicle shoppers around, both to the vehicle they drive and the manufacturer. Barring a massive spike in gas prices, that is unlikely to change, the automakers said. Yet last summer, when gas prices soared to about $3 per gallon, consumers shopping for full-size trucks indicated they may hold off on their purchase, said Jack Nerad, executive editor of auto-buying guide Kelly Blue Book. But now that gas prices have fallen, interest levels in full-size trucks appears to be back up. "But that doesn't mean they're not going to buy a new one at some point," Nerad said. "For a lot of people, there's really no substitute for a full-size pickup." You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
