Compared to the same months in 2010, the total U.S. auto sales are showing signs of shoppers being uninterested in the truck market. In May alone pickup sales fell 12.7 percent. There may be one factor that may be causing this shift, but most analysts believe it to be a combination of factors.
What’s the Reason?
Possible reasons for the slowing of Michigan truck sales:
• Increase in gas prices
• Lower mpgs on full-sized trucks
• Uncertain future of market conditions, employment, etc.
• Slowed industry need (i.e. construction industry)
With many unpredictable shifts in the economy, shoppers seem to be having a harder time to find the pros in purchasing a truck versus a more fuel-efficient vehicle.
In May the U.S. unemployment rate went up another 0.10 to total 9.1 percent. On the other side, it was also the slowest month in terms of creating new jobs for the country. Also, with the continued slide of home prices and the Dow Jones Industrial Average losing 6.7 percent since the beginning of May, the economy may be starting to look unstable again to shoppers.
“If you're uncertain about the economy and you're not sure what your home is going to be worth, you're unlikely to buy a $35,000 truck,” said Jesse Toprak, a TrueCar.com analyst, in a Detroit Free Press release.
Larger markets such as landscaping and construction purchasing trucks normally include the larger portion of truck buyers as hauling capacity is needed for their line of work, but with a slow in their industry, the need is reduced.
What’s the Good News?
Gas prices continue to lower to more reasonable prices and most analysts see the prices lowering even more for the summer time. This is good news for Michigan trucks as the Detroit Three can expect to see pickup sales beginning to increase by late summer.
Automakers have yet used incentives as they are also waiting for the industry to improve, but if increases in sales aren’t seen by the end of the summer, automakers may have to give incentives before 2012 models arrive into the market.
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[Source(s): The Detroit Free Press]