A market research firm has said that it expects the US pickup market to continue to shrink in 2009 and 2010 to about half of the segment’s 2001 sales peak of 3.3m units, in spite of launches of the all-new Dodge Ram and Ford F-150 this year.
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“Each new shock to the economy, including the return of $4 per gallon gas and turmoil in the financial services industry, further undermines consumer confidence and delays the recovery in overall vehicle sales,” said Charles Chesbrough, CSM senior economist. “But as shocking as today’s headlines are, the real story remains the very weak housing market, high fuel prices, inflation and the limited availability of credit.”
Pickup sales are particularly sensitive to fuel prices and housing, he noted.
“Until there is a meaningful recovery in consumer confidence and housing, pickup sales will continue to be weak,” Chesbrough said. “Unfortunately, the housing correction has further to go.”
New home construction starts fell to a 17-year low in August, according to the US Commerce Department, and home prices have yet to stabilise. Foreclosure rates will continue to be high into 2009, and according to CSM’s analysis, average US home prices — already down 10 percent from their peak — may need to fall another 13 percent to return to the stable growth trend of 1990s.
“With so many economic headwinds, we believe the pickup segment will bottom out at 1.7m units in the next two years. That’s down nearly 40 percent [down] from 2007,” said Joe Barker, senior manager, global sales analysis. “New products may help Ford and Dodge hold market share, but they won’t be enough to turn the tide.”
CSM sees the overall pickup segment starting a slow but steady recovery by 2011. But even by 2014, volumes will be just 2.1m units.
