Large Pickups Pull Through COVID-19 Summer With Flying Colors; New and Used Trucks Expected to Hold Their Value Through 2020 and Beyond

According to the latest J.D. Power analysis of the large pickup truck segment, year-to-date sales now comprise 15.4% of total retail industry sales, a 2% uptick compared with the same period in 2019.

Wholesale prices of large pickups have increased 23% since the first week of March. That equates to an average lift in price of nearly $5,000 per truck.

The growing versatility of large pickup trucks is expanding the pool of consumers who are interested in the category.
By: J.D. Power
 
J.D. Power
J.D. Power
MCLEAN, Va. - Oct. 30, 2020 - PRLog -- While a tight supply and reduced demand pummeled automotive industry profits through the summer of 2020, one remarkably resilient and consistent category has done much more than hold its own through this disruptive period: large pickup trucks. According to the latest analysis by J.D. Power, the large pickup truck segment comprises 15.4% of total retail industry sales through September 2020, a 2% uptick from the same period in 2019.

The longstanding love affair between consumers and their pickups has hardly cooled through the pandemic. Indeed, large pickup prices have surged in both the wholesale and used retail markets while new-vehicle sales in this category have also done exceptionally well.

"Wholesale prices of large pickups are up significantly since the first week of March. As a result, consumers shopping for a used large pickup are now finding themselves paying much more than they would pre-virus," says David Paris, senior manager of market insights at J.D. Power Valuation Services.

While all vehicle segment prices are up from their lows during the midst of the lockdown, the increase of large pickup sales is by far the best-performing segment in terms of percentage and dollar gains this year. The story is much the same in the used retail market. Since the first week of March, retail prices have increased 14%, or approximately $3,900 per unit.

New Large Pickup Sales Buoyed by Strong Incentives

New large pickup truck sales have been a bright spot throughout 2020. Automotive manufacturers have relied on the popularity of this category to protect and maintain brand value. To that end, the industry applied a herculean effort at the height of the pandemic to support new-vehicle sales in this category by offering aggressive incentives of 0% interest for 84 months.

"As the market recovers, manufacturers are beginning to back off these over-the-top incentives," Paris said. "Still, consumers are being offered compelling value propositions. For example, shoppers can still get a great deal on a new RAM 1500 truck with 0% interest for 72 months."

With consumer demand returning to the market, however, model year 2020 inventory is beginning to thin out, especially as the industry begins its transition to 2021 models. All of this is good long-term news for the valuation of used large pickup trucks.

Consumers Turn to Used Market for Value and Inventory

"The combination of all these factors—the model year transition, stalled production in the summer of 2020 and aggressive incentives during the worst virus-affected months—have created a ripple effect that is creating a shortage of new large pickup truck inventory," Paris said.

Moreover, J.D. Power estimates that supply of large pickup trucks up to five years in age will be reduced approximately 2% in 2020 from 2019 levels. The result: demand for used large pickups will rise and maintain upward pressure on prices through the rest of 2020.

"Looking to 2021, overall large pickup supply should increase, so we do not expect to see a situation in which there is not enough supply to satisfy demand," Paris said. "We expect wholesale prices on large pickup trucks to rise next year."

Large Pickups Emerge as Attractive Alternative to Expensive Large SUVs

The growing versatility of large pickup trucks is expanding the pool of consumers who are interested in the category.

"Not only are large pickup trucks among the most durable vehicles on the road today but they have become extremely luxurious," Paris said. "The features included in the fully loaded high-end models of large pickup trucks compare nicely with those of much more expensive large SUVs, while still delivering on their practical promise. This has become an important factor as more consumers use pickups for recreational purposes like boating and camping."

A well-appointed 3-year-old used large pickup has a wholesale price of just under $40,000. That compares nicely with a new model year 2020 upper trim level large pickup with a sticker price of nearly $70,000, or a new large premium SUV that retails for tens of thousands more once well equipped.

"The future, in short, continues to look very bright for large pickups," Paris said. "They have certainly proven their value for dealers and consumers during this time of economic stress."

Find Out More

Click here to learn more about research and insights from the J.D. Power Valuation Services Group. Please contact us at the numbers below to learn more about the underlying research or to schedule an interview.

Media Contacts:
Wendi Sheridan, East Coast; 215-630-5287; wsheridan@pacificcommunicationsgroup.com
Geno Effler, J.D. Power; West Coast; 714-621-6224; media.relations@jdpa.com

End
Email:***@mindsharecapture.com Email Verified
Tags:Vehicle Valuations, Large Pickup Truck Pricing, New And Used Vehicles
Industry:Automotive
Location:McLean - Virginia - United States
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse



Like PRLog?
9K2K1K
Click to Share