As Fuel Prices Fall, Pickup Sales Likely to Climb

Mileage group II

It wasn't that long ago when rising fuel prices caused many people to ditch their full-size V-8 pickup trucks in favor of more fuel-efficient subcompact cars. Then the recession hit and even more people moved away from big truck purchases.

Now it looks like all that is changing as the economy seems to be on an uptick and fuel prices continue to fall. Just about every full-size pickup maker has some kind of new product to show off in dealerships. In fact, according to The Detroit News, these events are having a huge impact on pickup and SUV sales, with both segments seemingly headed toward pre-recession heights.

With all four domestic pickup makers (Chevrolet, Ford, GMC and Ram) seeing double-digit improvement over 2012 numbers and fuel prices at a 12-month low, this is a good time to be a pickup truck dealership. Some experts are predicting that close to 16 million new vehicles are likely to be sold by the end of the year; that number includes close to 2 million pickup trucks. When the recession began, many criticized the big domestic automakers for their reliance on bigger vehicles with higher profit margins; it left them unable to respond to buyers looking for fuel-efficient, smaller vehicles.

Some experts are predicting that existing conditions — new products, lower fuel prices and people looking to upgrade their older vehicles — are likely to continue through 2013 and into 2014, the Detroit News reported.

 

Comments

not sure where everyone is seeing the economy better, but in my area where I live, just in my developement, there are 26 houses for sale and a few in forclosure, the housing market is very bad, and people continue to loose thier houses, my are market was ok thru the recession, I'm not seeing things get better for trucks or anything else...

@All American, Do you like the tailgate. Cause that is what you will be seeing a lot of. LOL

@Nitro

I would suggest to your neighbors to move to Texas. Or any where else there is an oil boom right now. I know a lot of guys down here working in the oilfields that actually live up in Michigan, and go back home on their time off. Sure it is rough, but they are making the sacrifice to give their family a better life. I don't think current generations are willing to make the sacrifices previous generations did though. They want it handed to them and are not give up anything to achieve anything. That may not be the case for all, but it is what I see in most. If things aren't going good for you then move to Texas, North Dakota, Louisiana, or any of the the other states that have an oil boom. Trust, there is plenty of work. It may not be the work that some want to do, but it is there and it pays very well.

Please stay out of Austin though, we're full! There's no oil here, no jobs, and there is chaos in the streets I tell you! LOL!! For all the people that have criticized Texas, especially Californians, there sure are a helluva lot of them moving here! In fact, more people move to Texas than any other states, and it's been that way for the past 10+ years! My neighborhood is full of transplants, most of which didn't even have jobs when they came here. You wonder why native Texans have so much pride?? Ask the millions of people who have moved here and who continue to move here every year! In Texas, everything is bigger and better. Period.

The economy has been getter better here in Colorado, for the last five years my contracting business has been doing better every year compared to the year before that plenty of jobs here!

@Nitro Well said! The writers and reporters who cover the economy, and others who specialize in writing about their specific fields (automotive?) often don't know the difference between "economies" and Markets.

The stock market is hot. Wall Street is doing great.

However, main street in most of America today is either hurting or barely recovering. The government is run by people who spent their whole lives running colleges and municipalities. They know nothing about stimulating markets or economic growth.

A weak economy is the main reason that fuel prices are slightly off. A few bombings in the middle east or a terrorist attach somewhere, and $4.50 gas is back as sure as Bob's your uncle.


Fuel prices fluctuate, anyone who buys a truck because fuel prices are cheaper is an idiot. Its the same people that you see buying a brand new truck and then selling it for a subcompact a year later. When you buy a truck you take into consideration that fuel prices may be $5 a gallon in a year, and if you can't afford it or don't want to pay it then you buy something more economical.

Price of gas is still too high and the prices of pickups are going up! I am still waiting for the damned outrage! I am biting my tongue every time I fill up. No one seems to give a crap that we are paying insane gas prices for 5 years. No one cares that true unemployment is 14% No one cares. No media hysteria over these issues. Amazing how brainwashed Americans are. If the media doesn’t tell them to care, they don’t care.

And another thing, so far, EVERYTIME this kind of falling as price message comes out, gas prices drop for 10 days to two weeks THEN, they CLIMB again under some manufactured news or tied to news such as Libya, etc.

EXPECT more of the SAME when the MSM tells us once again... "Prices at the Pump Rise UNEXPECTEDLY on news of _________"

@Chris Your right! I've seen some of the women there and they are big! lol

yeah its like the guy who earlier said my neighbors need to move to find work, its not that they cant get work here, its that they have a great job buy a big house, then they loose their big job, and there goes the house, all becuz some banker said go ahead and buy this house heres the loan, with no education on givin the young ones the tools to figure out what happens when that money goes away, or how to prepare for IF that happens, we live in a society where CNN tells us the economy is great and you should buy a huge house with your great job, people believe it, and then do it, just like the people who believe moving accross country will solve all your issues without knowing what going on in the first place

@Scott

As more and more barrels come out of US soil, the less foreign affairs effect our fuel prices. Currently the US does not put out enough barrels to meet it's own demand, but we are getting closer and closer each year. Some predict it will happen in the next few years. I can tell you that there is more then enough currently discovered oil in Texas to keep us pumping forat least the next 30+ years. There also a lot of places we now the oil Iis there, but are pending a pad to be laid dows. Texas is not alone with oil , there are a lot of other states discovering more oil that we know have the technology to get to. A vast amount of my customers are oil companies that I comunicate with on a regular basis on the future of our partnership. I can tell you that there this enough to keep us going, the only thing that will change that for many years to come would be political policies or new technology that will not require us to use petroleum anymore.

The US sells a lot of the oil back overseas.

"the economy seems to be on an uptick" - Mark Williams

Real jobs report: workers disappearing by the millions; but Washington sees recovery..

http://www.zerohedge.com/news/2013-11-08/whopping-932000-americans-drop-out-labor-force-october-labor-participation-rate-drop

Only 62.8% of the population is working right now.

At this pace the people out of the labor force will surpass the working Americans in about 4 years.

@All1 - I do not think that domestic production really has a huge effect on lowering fuel prices unless there is a large amount of excess fuel in the system. Prices tend to be set on what is happening globally. Demand has dropped in many respects due to the struggling economy.

I just read a story about the Millennials. The persistent myth has been that they do not care about cars. A recent study done by Edmunds shows that Millennials (18-34) buy just as many sport and luxury cars as their older counterparts IF incomes are the same. They aren't buying cars or trucks because many in that age group don't have a job, don't have a good job, or don't have job security.

The 800 lb gorilla in the room that politicians ignore is the fact that the economy overall isn't doing well. Some sectors are seeing growth but most are stagnant.

The oil and gas sector is booming but most other sectors like manufacturing are not. I see the same thing in Canada. Central Canada where most of the manufacturing capacity is located is struggling. The West i.e. BC, Alberta, Saskatchewan, and Manitoba has been booming due to oil and gas.

Anyone buying a pickup because the price of gas has dropped is not too bright. It will be great for the rest of us wanting a cheep used truck when prices go back up.

@Lou BC

You are correct that currently any US oil will not have that much effect on prices globally. However it will as we pump more oil and lessen the percent comming from the middle east. Right now, a vast percent of the oil comes from the middle east so anything that harms that oil flow will have a bg effect on prices. As US oil (and other places) gain more of a percentage of supply then what happens in one area will not effect prices that much since we can just shift to getting it elsewhere. We still have a very very long way to go here in Texas to where we are pumping at max barrels a day. Hell we haven't even laid close to half the amout of drill sites that are planned yet, and that is just here in Texas.

@the real Lou (in BC)

When I was young I bought my first car for $450 (in 1971). My second car I bought for $100. The third was $200. The fourth was $1000. The 4th car lasted until I financed my first (a pickup) in 1988. For a total of $1750 I bought 4 cars that gave me many years of suitable transportation. I also got an education from owning those cars (I learned to rebuild engines, reline brakes, do tuneups, find cheap tires).

My 1988 was costing me $200 per Mo in payments so within just one year I paid more in financing the truck than I'd spent in almost 20 years of driving used cars.

So the lesson is, if you don't have the dough to buy new you have to buy used and learn to enjoy fixing them yourself when they break.

I know a lot of young people who cannot imagine not driving something new.

Many other countries have shale oil and seam gas.

This reduces the advantage that people in the US are thinking they are the only ones with these resources.

I do know here in Australia they have found a shale oil field that holds more oil than Saudi Arabia earlier this year.

The US still has to compete more or less with the same advantage.

Manufacturing has been decreasing in many OECD economies including Australia. We have been fortunate enough to have what the developing nations want in abundance.

To survive in the future a country will have to offer somethinng another can't. Developing nations have manufacturing and cheap wages, they are at an advantage.

Gas and petrol here isn't dropping as much as in the US. Why? Because of supply and demand. Our oil is consistently 20%-25% more expensive per barrel. The same goes for natural gas.

When energy prices increase then you are seeing an uptick in economic activity. Energy is priced on a global basis, not what the US pays.

@papa jim - I do agree that part of the problem is based upon expectations. I know many people younger than I feel that they are entitled to the wages and benefits I have even though they haven't gotten the education, experience or "time in" that I do.

I started out with a used car that my parents gave me and I kept it running. When my parents got older and retired, I returned the favour by looking after the operational costs of their vehicles. My first new vehicle was in 1984 and I paid cash for it but was working several jobs at the time and was saving to go back to college.

There are opportunities out there if one is willing to look or more specifically, take any job/multiple jobs to get the experience. College degrees do not guarantee a job especially if one gets a degree with minimal market value. That is unfortunately a by-product of the educational system's mantra - it doesn't matter what/how you do as long as you feel good about yourself.
I'm already telling my kids that it is important to enjoy what you do but one must get an education/trade that pays the bills because you can't enjoy anything if you can't afford it.

@Big Al


Whoa, calm down there turbo. We never siad, never insinuated, or ever thought that the US were the only ones with recourses. I don't know where you got that impression from us. The only reason reason I am only talking about oil in Texas is because I know a lot about what happens here and not much about other places. I figure those that live in those places can speek for themselves. We are not foolish enough to think the US is the only one. It is the best country in the world with Texas as it's best state, but that is my opinion. Also, taxes and regulations on how many middlemen each barrel goes through before it gets to the end user also dictates a higher price as well.

Fuel prices falling? Economy getting better? People ditched their v8 trucks?

I'd really love to know what planet you're living on, Mark.
I really would.

I'm not disputing your claims of sales of being up, fuel prices being at a 12 month low (duh! gas prices drop every winter), or there being an uptick in the economy, but the way your post was presented really comes across as a puff piece for the auto companies.

Instead lets look at some of the underlying problems.
Sales are up because lending is up. People are still taking on massive personal debt to drive big trucks they can't afford and can barely afford to fill up. Like the junk food companies, the auto industry continues to pump out these expensive, wasteful vehicles because of bad habits that consumers have of thinking bigger is better and a sort of pnis envy amongst other truck owning friends. But the fact is most people don't need these big trucks. Many of us have been asking for smaller trucks. There was nothing wrong about the size of trucks in the 90's when gas was 99 cents a gallon. They could offer smaller trucks but they don't. Why not ask them why, mark?

The average age of cars on the road today is 11 years old. Gas prices are still insanely high compared to where they were 11 years ago. Rather than developing alternative fuel trucks and making those available to the masses, the auto companies instead are making trucks even larger and more wasteful. And not to mention many small cars have become "light trucks" to avoid having to meet more stringent CAFE standards.

The compact pickup truck has died and is probably never coming back. Why offer something cheaper when the oligopolistic auto industry can instead offer only more expensive trucks so they can make more profit and the banks can make more money loaning money for them?

Very disappointing.

@ALL1
I wasn't directing my comment at you in particular.

There are distortions in your vehicle market from barriers and tariffs dictating a leaning towards particular types of vehicles. Cheap and long loans and leases to move them.

These instruments for money are not sustainable in the longer term and the US economy isn't growing quick enough to pick up and take over without huge cash input.

85 billion a month plus $3 000 subsidy per vehicle made.

How much longer can the US keep on borrowing to sell pickups? If you can't really afford them, why are they being sold?

Are you living in a house of cards?

Sales are good, but how the sales are derived at isn't. We pay more for our vehicles, ever thought why?

Can someone call me a wrecker, My Fiat broke down again.

No one gives two S&*^T and F*(k what you say Big Al from Oz. You hate the USA and always try to knock us down.

( We pay more for our vehicles, ever thought why?)

Probably because you SAND RAT aussies are dumber then a big box of rocks.

@joe
Sorry if you are offended. But I'm not anti American.

So, explain to me how much longer can the US keep on pumping $85 billion a month into your economy?

How many vehicles are being sold with cheap and long loans/leases? What impact will this have on future sales?

Have you ever read what I've written about our vehicle manufacturers and the subsidies? I would be called anti Australian.

I'm against subsidisation and protection.

Cheap fuel isn't the reason why vehicle sales in the US have increased. It would be foolish to think so.

There are many factors affecting vehicle sales in the US. Some of those factors I have written above.

If you don't like it, so be it.

This is true gm build a 4500'pickup????

@ Big Al

I am not going pretend I know what the F you are talking about there, but I will say that might truck has been paid for and has been since day one. I have no credit card debt, I don't buy things unless I have the money for it right then and there, and I am less than 10 years from my house being paid off. All that and I am not even 40 yet. While I will agree with you that most Americans take after their government and spend foolishly, not all are that way. I still think this is the best country in the world and Texas the best.

*40 years old. Sorry

@All1
Are you also Joe?

You seem to be responding to alternative blog names.

I'm getting a little confused.

Interesting.

No, I only use All1. I am not one of these cowards that use other peoples names or alternate names. If I have a problem with you then I will tell you. So far, we are cool. Just a friendly debate on different point of views is all. No harm there. You can check by asking Mark Williams if you want. I give him permission to tell people which posts are mine. As to my knowledge, my name was used one time that wasn't me a week or so ago, but the person used ALL1 where I am All1.

NM, I just noticed on my computer I am ALL1 and when I post on my phone I am All1 so disregard that last statement. I will change it to All1 on both.

Big Al from Oz I'am not ALL1, but that still doesn't change the fact you need punched in you're C98k S76ker for the stupid bull s&*t you try put on us Americans. We are tired of you're B.S! Go pound sand in the out back rat man!

Easy there Joe don't take someone's criticisms of your government so personal. Big Al doesn't believe in subsidies so you want to punch him? That's a bit much! Subsidies is a form of welfare and that's not healthy.

Why don't you grown up and enjoy the different perspective he brings as do other who aren't from the US.

All of us Americans are just jealous of of this little bugger. The baddest expedition vehicle ever built. Smokes Ram Runners, Eats Raptors, and out hauls, out tows the Mighty Power Wagon.
A truck that needs no introduction. Mazda very own BT50 2.5L
diesel.

https://www.youtube.com/watch?v=oLzMSUuukZM

@98sienna - you raise a valid point, often outsiders can see what residents cannot.
One gets accustomed to social rules, lifestyle, style of government, family beliefs etc. and since we grow up within that environment, we tend to take many things for granted because that is what we know. We do not see some factors that shape us because it is always there. It is no different than someone raised in a warm climate being more tolerant of the heat or subsequently being more sensitive to cold.
We tend to look at other cultures, races, countries through the eyes we were raised with. It is an interesting phenomenon, the opposite is often called "thinking outside the box".
We get used to the walls of our box, anything on the other side is often seen as a threat or odd or seen as being less worthy.

I don't understand how the future generation is portrait so badly. The current "greatest generation" ever are the ones that started this mess. Our government is an absolute joke ran by idiots. I'm 21 years old and I'm in college and I worry all the time if I will be able to find a job after school. I don't want things handed to me I want a legitimate opportunity to be successful in life.

@Evan - that is why it is called a "generation gap". We are guilty of judging your generation by the standards and norms we grew up with.
I find many "millennials" don't have the ethic you have.

@Evan
If you are a young person I feel sorry for the mess we are leaving you guys to clean up.

It's not just in the US, but Australia, Canada, Europeans, etc.

People have expected to much for too long and voted for the people who promised to deliver much for too little. Someone has to pay for this excess and it's your generation.

Everyone wants pickups to be cheap, fuel to be cheap, everything to be cheap. But somehow it costs.

If you seriously look at what you get for a $20 000 vehicle, even here or in Europe you are getting a lot of kit.

I think we have to think ourselves lucky we are living now and not 200 years ago.

Nothing comes for nothing, the comment I made previously about the cost we are paying for vehicle was to indicate that somewhere, somehow for the exact same thing we are paying more. But why?

If you look at it closely you will see we don't subsidise/protect our vehicles as much as the US. Our minimum wage is higher increasing the cost of everything, including pickups, our market is tiny in comparison, etc. Importantly our market isn't managed to the point where we over produce which leaves manufacturers with large inventories to move. We are mostly slightly under supplied, increasing demand, hence price. Better managed in that respect.

The same goes for our fuel. I have seen comments on this site of people complaining that fuel is more expensive than it used to be. Why, again? Because even though in the old days when the US economy had a downturn, globally fuel prices dropped, along with every other commodity ie, food, coal, iron, copper, etc.

This didn't occur this time round. Why? Because someone else is buying it in lieu of the US, Euro, Japanese. But we again, pay more for fuel than you guys. This isn't just because of taxation. A barrel of Tapis oil here is 20%-25% more because of supply and demand from China and other Asian countries that are increasing their economies quickly. We don't have access to West Texas Crude or Brent at cheaper prices.

I think you guys have to be aware of external influences that are impacting your country and why certain events are occurring.

I'm not anti American, but some on this site are oblivious to what goes on in the world that affects your everyday lives.

Trust me on this, protection offered to certain vehicles in your market might be detrimental to their future.

Here is some interesting reading. It appears to cost of shale oil extraction is high.

I summise, that could mean that if the cost of the recovery of the shale oil is high, then the wells will be capped.

The link seems to be quite credible, I've never read this website before, an interesting site.

http://oilprice.com/Energy/Natural-Gas/US-Shale-Dealt-a-Blow-as-Oil-Majors-Struggle-to-Turn-a-Profit.html

http://oilprice.com/Energy/Energy-General/Oilprice-Intelligence-Report-Welcome-to-the-US-Shale-Reshuffle.html

Big Al from Oz shut you're suck hole. We need to go back to the 1940s to full fill you're dumb a^& dream in a country you don't live in. There for Big Al from Oz just talks S*&(T out his butt hole like a dirty 1940S GERMAN! Big Al from Oz is the next got damn HITLER just look at how he pushes people into his way of thinking. Big Al from Oz Needs his teeth kick in before he becomes a new Hitler

So shale production is expensive? Companies might cap wells or stop production if oil prices drop? Well no kidding. Oil companies have known about shale for over 30 years. The oil companies started losing their ass decades ago persuing shale and quit as oil prices dropped. It is basic economics. That is why it took them so long to get back to shale resources when oil started to climb again; they wanted to be sure it wasn't just a bubble and worthy of long-term investment.

I don't know about any national averages, but where I live, regular unleaded is ~$3.00 and diesel is ~$3.80 per gallon.

Bureau of Labor Statistics - Bureau of Lying Statistics
105 million unemployed, 135 million employed.
It isn't going to take four year for those numbers to become equal. More like two.

The rule of law is almost completely gone in the USA, when a blatantly unConstitutional Act is called law.

Maybe pickup sales will increase, how does that song go...
A shotgun, pickup four wheel drive, a country boy will survive



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