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Old 10-05-2009, 09:48 AM   #1
AVANTI R5
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Default Decline in the sales of pickups is getting worse

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http://www.nytimes.com/2009/09/30/bu...2&ref=business

PONTIAC, Mich. — The closing of a big General Motors truck plant this week is another sign that America’s love affair with pickup trucks is fading fast.

Sales of pickups have declined sharply this year, more than the drop in overall vehicle sales, which are at their lowest in 25 years.

In 2004, for example, auto companies sold nearly 2.5 million pickups in the United States, many of which were used as everyday transportation, not just as work trucks or to haul trailers.

This year, the industry likely will sell only about a million trucks.
The downturn in pickup sales is putting new pressure on the finances of automakers, which for years earned significant profit from trucks.

In Pontiac, G.M. is shutting down the 3.4-million-square-foot truck plant that has been a fixture for 37 years in this industrial city about 20 miles north of Detroit.
Some of the production will be handled by a third shift at an assembly plant in Indiana. For the 1,100 workers who will lose their jobs in Pontiac, the closing represents the end of an era when G.M. could not build gas-guzzling pickups fast enough to meet consumer demand.

One worker, Garey Knop, said that rising gas prices last year and the weak economy combined to kill the pickup boom.
“Four-dollar gas put the nail into it,” said Mr. Knop, a pipefitter who has worked at the Pontiac plant the last 12 years. “I drive 110 miles a day, and I wouldn’t drive one of these trucks.”

Both the Ford Motor Company and Chrysler have also closed pickup plants in recent years in an effort to bring production more in line with demand.

But the precipitous decline in pickup sales has been greater than many auto executives had expected.
When pickup sales were at their peak in 2004, the segment accounted for nearly 15 percent of all new vehicles sold. This year, pickup sales represent about 10 percent of the overall market.

Some of the decline can be attributed to the slowdown in home construction and the impact on contractors, who were among the most reliable buyers of pickups.
But the biggest drop-off has been in consumers who bought pickups for personal use.

“The casual truck buyer is disappearing somewhat,” said George Pipas, the chief sales analyst at Ford. “Today people have to make choices between what they want and what they need. And the question is, Do they really need the capabilities of this type of product?”

Ford, for example, sold 939,000 of its industry-leading F-Series pickup in 2004. This year, through August, the company had sold just 261,000.

“We are pretty sure at Ford that we will never see pickups accounting for 15 percent of the total market again,” said Mr. Pipas. “What we’re looking at now is mostly the core buyer who needs this type of vehicle for work purposes.”

Pickup sales were a huge contributor to the bottom line at all the Detroit automakers during the peak sales years. Analysts estimated that the companies earned more than $10,000 in profit on each pickup sold, compared with marginal earnings or losses on smaller cars.

The surge in sales a few years back prompted automakers to increase production, and was a crucial factor in Toyota’s decision to open a new truck plant in Texas.

Cheap gas lured many consumers to buy pickups and load them up with luxury options like leather seats, high-performance engines and electronic gadgets.

“People were feeling affluent and saw the pickup as the perfect second or third vehicle in the garage,” said Joseph Phillippi, principal in the firm Auto Trends Consulting. “They also were buying snowmobiles, Jet Skis and boats, and they needed something big and powerful to haul their stuff around.”

But when gas prices soared in the spring and summer of 2008, the market began to drop quickly.
This year, overall new-vehicle sales have tumbled to an annualized rate of about 10 million units — a huge drop from the 16 million sales that had been the norm as recently as 2007.

Car dealers say that the suburban cowboys who scooped up pickups have pretty much disappeared from vehicle showrooms.

“They didn’t hunt or they didn’t fish — they just used it as a daily driver,” said Chris Meyer, general manager of Heiser Ford Lincoln-Mercury in Glendale, Wis. “A lot of those people have gone back to more economical vehicles.”

Analysts said the pickup market would rebound somewhat when construction activity improved. Until then, auto companies will keep cutting production.

“These personal-use buyers just got scared out of the market by the rise in gas prices last summer,” said John Wolkonowicz, an analyst with the forecasting firm IHS Global Insight. “But when construction comes back, some of the sales should come back, too.”

In Pontiac, many of the workers are grappling with a decision whether to transfer to work the third shift at G.M.’s truck plant in Fort Wayne, Ind.

“If they want a job they’re going to have to follow the product,” said Doug Bowman, president of United Automobile Workers Local 594. “They’ll have to pick up their families and go.”
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Old 10-05-2009, 09:52 AM   #2
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This is the opportunity for vehicles like the Brat, Baja, El Camino, and Ranchero to make a comeback.
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Old 10-05-2009, 09:55 AM   #3
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Who knew people didn't want more trucks! Shocking! Good thing GM is finally figuring this out.
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Old 10-05-2009, 02:21 PM   #4
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good, I hate trucks.
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Old 10-05-2009, 02:46 PM   #5
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picture doesnt match headline.
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Old 10-05-2009, 02:52 PM   #6
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“Four-dollar gas put the nail into it,” said Mr. Knop, a pipefitter who has worked at the Pontiac plant the last 12 years. “I drive 110 miles a day, and I wouldn’t drive one of these trucks.”


you and everyone else buddy!
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Old 10-05-2009, 02:59 PM   #7
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picture doesnt match headline.
Yeah I know, nice job NY Times, eh?
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Old 10-05-2009, 03:07 PM   #8
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Default Compact pickups on way from India

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Quote:
Originally Posted by justincredible View Post
This is the opportunity for vehicles like the Brat, Baja, El Camino, and Ranchero to make a comeback.
With that in mind, do the little pickups from India with a name few will have ever heard — Mahindra — stand a chance?

Once the trucks go on sale next year, Mahindra will have the only diesel in its class and offer a truly compact truck design amid an admittedly stagnant segment.Careful pricing and attention to quality will be essential to persuade U.S.

customers to try an unknown truck, said Jesse Toprak, vice president of industry analysis at Truecar, an auto news and pricing Web site.

Mahindra “is actually a powerhouse in India,” Toprak said. Here, “consumers don't have an image of the brand.”
Turbo diesel engines that deliver fuel economy and power are “one of the directions of the future,” said Dick Swope, president and chief executive of the Swope Auto Group in Louisville.

The group plans to open a Mahindra dealership early next year. Swope wouldn't say where Mahindra trucks will be sold, but Mahindra spokesman Mike Geylin said they don't take up much room or require much investment from new dealers.
“We are looking for 900 square feet, minimum, in the showroom and a technician in the back,” Geylin said.

On the heels of shedding both the Pontiac and Saturn brands because of General Motors' financial woes in the past year, Swope said taking part in the Mahindra expansion is a natural move for the group.

“Our strategy has always been to look for opportunities,” he said in an interview.

The two-door TR20 and the four-door TR40 pickup trucks, which are undergoing collision testing now by the U.S. government, will be the first Mahindra vehicles sold at more than 300 U.S. dealers early next year, Geylin said.

The Scorpio, a sport utility vehicle, will follow by late 2010 or early 2011, he added.

Imported from Nashik, India, and priced at $20,000 and up, Mahindra compact pickups average close to 30 miles per gallon overall, Geylin said.

Mahindra is targeting the compact pickup truck class dominated by the Toyota Tacoma, followed by the Ford Ranger, the Nissan Frontier and Chevrolet Colorado. Compact pickup trucks account for roughly 5 percent of all U.S. vehicle purchases.

Since 2007, compact pickups consistently have accounted for about 20 percent of the overall truck market.

We are going after small fleets, contractors, lawn-care companies, people that tow boats, dirt bikes,” Geylin said. “People that use vehicles for schlepping, that pile up mileage and appreciate fuel economy.”Mahindra aims to sell 45,000 trucks in its first year in the U.S. market.

Paired against established players in the compact truck sector, that is an ambitious goal.

So far this year, Toyota has sold about 86,000 Tacomas, a 41 percent share of the 212,000 U.S. compact truck sales. Ford's Ranger holds the No. 2 spot of 20 percent, or roughly 42,000 sales.

“To come in here and say you are going to be as solid as one of the major players is probably not realistic,” Karl Brauer, editor in chief of Edmunds.com, the auto news Web site, said Friday.

But the Ranger has not been updated in at least a decade, making it the oldest truck in the compact pickup segment.
Ford's diesel plans are focused on bigger trucks, specifically the F-Series Super Duty assembled at the Kentucky Truck Plant in Louisville, Ford spokeswoman Anne Marie Gattari said. The first Ford-designed and -built diesel engine will be in the 2011 F-Series Super Duty. “The diesel discussion for us right now is all around Super Duty,” she said.

Other competitors like the Tacoma and Dodge Durango have ballooned in size and capacity in recent years.
The U.S. sales outlook for both diesel engines and fuel-efficient but still powerful compact pickup trucks “is bullish,” Toprak said
http://www.courier-journal.com/artic...e=nletter-news
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Old 10-05-2009, 03:29 PM   #9
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I think the Mahindras will be hard to sell at 20k+. Starting them at 16k would be better.
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Old 10-05-2009, 03:32 PM   #10
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42K sales first year , will see..
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Old 10-05-2009, 03:45 PM   #11
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Originally Posted by Tim-H View Post
Who knew people didn't want more trucks! Shocking! Good thing GM is finally figuring this out.
I think you are mistaken. GM made those trucks BECAUSE the consumers were buying them by the droves. Why would they not want to rake in the moolah, because someone else is being stupid ?

Bottomline, the CONSUMERS did not need/want more massive trucks and the CONSUMERS are finally figuring that out. GM is simply adjusting to the "new normal".
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Old 10-05-2009, 04:24 PM   #12
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Unfortunately GM, and to a bigger extent, Chrysler, completely failed to plan for an end of the pickup truck trend and had little consumers wanted when gas prices spiked.

Ford too, but at least they started to correct the situation sooner.
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Old 10-05-2009, 05:01 PM   #13
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Ford too, but at least they started to correct the situation sooner.
Among the former Big-3, Ford was the best positioned for the new age. They internally forecasted the upcoming downturn and girded up by getting rid of all the assets they did not need, and hoarding cash, which was precisely why they did not have to go, hat in hand to Washington, for bailout cash.
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Old 10-05-2009, 09:41 PM   #14
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^^True, but Ford also borrow billions privately before the downturn. They essentially "bet the company."

Quote:
Pickup sales were a huge contributor to the bottom line at all the Detroit automakers during the peak sales years. Analysts estimated that the companies earned more than $10,000 in profit on each pickup sold, compared with marginal earnings or losses on smaller cars.
Um, how about lowering prices then?
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Old 10-05-2009, 11:42 PM   #15
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Originally Posted by justincredible View Post
This is the opportunity for vehicles like the Brat, Baja, El Camino, and Ranchero to make a comeback.
I doubt it. Those types of vehicles have never been popular and never will be. There's a reason they're all dead.
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Old 10-06-2009, 12:11 AM   #16
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I doubt it. Those types of vehicles have never been popular and never will be. There's a reason they're all dead.
Agreed. I personally could find no reason whatsoever for the existence of the Subaru Baja, which was essentially a Subaru Outback with an open hatch area that functioned as a pickup bed. Everyone who looked at it, figured it out right away and I am not surprised that the product bombed in the marketplace.
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Old 10-06-2009, 12:13 AM   #17
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They essentially "bet the company."
And right in the nick of time....before the available credit dried up.
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Old 10-06-2009, 10:26 AM   #18
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Originally Posted by akoshy View Post
Agreed. I personally could find no reason whatsoever for the existence of the Subaru Baja, which was essentially a Subaru Outback with an open hatch area that functioned as a pickup bed. Everyone who looked at it, figured it out right away and I am not surprised that the product bombed in the marketplace.
And yet those are exactly the reasons we bought ours.

You can't load tall objects into a wagon or hose out the trunk without seriously rhino-lining it.
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Old 10-06-2009, 10:38 AM   #19
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This is a good thing. I'm so sick of SUV's crowding the roads.
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Old 10-06-2009, 11:17 AM   #20
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I'm so confused. If the decline is worsening.. they must be selling more, right?
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Old 10-06-2009, 01:49 PM   #21
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I'm so confused. If the decline is worsening.. they must be selling more, right?
It's tomorrow in Australia. If I call you (your in Australia) now did you talk to me yesterday??
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Old 10-06-2009, 02:21 PM   #22
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It's tomorrow in Australia. If I call you (your in Australia) now did you talk to me yesterday??
My headache was worsening tomorrow.
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Old 10-06-2009, 02:40 PM   #23
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I don't hate pickups. They have their uses. I just want the current mid-size trucks (I'm looking at you Tacoma and Frontier!) to go back to compact size like the BTTF Toyota truck:



I'd ditch my Leggy for a truck of this size with a small displacement, diesel 4-banger (you know, like the what the rest of the world gets).

I'd actually love to have one of these:


Last edited by teh POD; 10-06-2009 at 02:47 PM.
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Old 10-07-2009, 01:21 AM   #24
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What has killed the sale of trucks is the overall decline in construction. Builders, landscapers, all construction oriented business are at a standstill. They are the ones that have been buying trucks and they buy them because that is the best vehicle for their purposes. Many of these same people have close connections to farming, hunting and fishing. No jobs, no new truck purchses for business or pleasure. Hwy61
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Old 10-07-2009, 06:58 AM   #25
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err...no...at least partially.

Suzie soccer mom and the guy commuting to work is realizing they can get by with a minivan or a normal car that gets much better mileage. And I say that as evidenced by the unreal drop in the amount of SUV's on the road around here. It used to seem like I was one of the very few actual cars on the road...now it has almost flopped the other way. Construction certainly has something to do with it but the sheer number of SUV's and pickups that never hit a job site or never hit a farm was staggering.
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