King of the road and market: the light truck
One of the dominant trends in the auto industry over the past four decades has been the steady rise of pickups and SUVs as a market segment.
In the 1960s and ’70s, pickups occupied a niche market among farming communities and construction companies. They were the preferred mode of transportation because pickups were inexpensive, practical, dependable and versatile.
Today, pickups, SUVs and vans (light trucks) now dominate the automotive landscape; light trucks have made serious inroads among urban car buyers of all ages and backgrounds.
In 2016, sales of passenger cars declined 7.6 per cent over 2015, while light truck sales rose 8.8 per cent. In the first quarter of 2017, of the top five best-selling vehicles in Canada, four were pickups.
The popularity of light trucks can be traced to the late 1980s, when General Motors introduced independent front suspension on its Sierra and Silverado pickups, which led to improved handling and a lower ride (since then, other automakers have followed suit).
Prior to independent front suspension, full-size pickups boasted front axles that raised the bodies eight to 12 inches (203 to 304 millimetres) higher than vehicles with two-wheel drive.
The 1990s gave rise to heavy competition in the pickup market with new designs from GM, Ford and Chrysler. Toyota, Nissan and Honda have since entered the pickup market as important niche players.
In the 1990s, as pickups gained popularity, automakers added new features, such as sport packages, extended cabs, short cabs, greater load and towing capacity, increased interior space, more four- and allwheel drive options, and higher ground clearance.
Some of today’s luxury pickups are equipped with the same features found on luxury cars, such as auto dimming headlights, adaptive cruise control, heated and cooled or ventilated leather seats, multi-view rearview cameras and other high-tech items.
Other factors contributing to the boom in light truck sales have included lower fuel costs, lower interest rates, trucks as status symbols and an abundance of customization options available.
Low fuel costs have meant that consumers are spending less money on gas and putting that extra money into buying pricier trucks and SUVs.
Many manufacturers have offered low financing rates (including zero per cent) in recent years, making trucks and SUVs more affordable.
Auto leasing, too, has made a comeback; consumers are now leasing higher-priced light trucks due to affordable lease rates.
Another driving force behind the surge in light truck sales has been sales to women. From 2010 to 2015, sales of SUVs to women rose 34 per cent compared with a 22-per-cent increase to men. During the same period, premium small SUVs sales to women rose 177 per cent.
Some manufacturers have targeted women in promoting certain SUVs, such as the Buick Encore. Two years ago, Fiat Chrysler Automobiles collaborated with country singer Miranda Lambert to promote Ram trucks — specifically targeting female customers.
More recently, smaller SUVs — which include five-seat crossovers to modified hatchbacks — have made a big impact on the industry. In my area (Hanover, Ont.), these vehicles are particularly popular with seniors, who prefer the higher seating for easy accessibility and four-wheel drive for winter driving.
Last but not least, pickups have become a new status symbol among car buyers. Even for those who don’t use a pickup for work or hauling boats, the idea of owning a large, masculine pickup is hugely appealing. It conveys an image of toughness.
All indications point to the light truck sales trend continuing in the years ahead. Of course, a sudden spike in oil prices or interest rates could affect sales, but pickups and SUVs have proved remarkably resilient in the face of changing market conditions. This column represents the views and values of the TADA. Write to president@tada.ca or go to tada.ca. Larry Lantz is president of the Trillium Automobile Dealers Association and is a new-car dealer in Hanover, Ont.