Sun Sentinel Palm Beach Edition
Pricier trucks, including SUVs, outpace most auto sales
Consumers looking for bigger, roomier vehicles are leaving cars behind
American consumers are buying bigger vehicles, and apparently, they don’t mind paying the heftier price.
Truck sales have been outpacing car sales for more than five years. But now, truck sales are nearly two times that of cars, according to AutoNation, the country’s largest seller of vehicles. The trend is generally the same in South Florida.
“You have this shift going on under way where the consumer is selecting a vehicle that, on average, is $6,000 more than a passenger car,” CEO Mike Jackson told analysts on AutoNation’s first-quarter results conference call on May 1.
Truck sales have been steadily rising from 51 percent of the mix in 2013 to 64.5 percent in 2017, according to AutoNation. Car sales have been declining, from nearly 50 percent of the mix in 2013 to 35.5 percent in 2017.
Consumers are choosing trucks because they like to sit high as they drive, there’s more interior room, they’re designed now for better gas mileage, and they have the latest technologies, such as anti-collision brakes and lane departure alert, dealers and industry experts say.
There’s more variety. The “truck” category now includes light trucks, SUVs or Sports Utility Vehicles, and CUVs or Crossover Utility Vehicles, which have the smoother platform of a car but the body of a SUV.
Trucks are doing so well in sales that some manufacturers are ending the production of certain cars in favor of making trucks. Ford said in April it would stop making most of its North American sedans, including Taurus, midsized Focus and Fusion. The company will continue making its storied Mustang sports car and a compact Focus crossover vehicle.
Dealers like selling trucks because their average transaction price is higher than a car. Kelley Blue Book analyst Tim Fleming said the average transaction price for trucks and SUVs in April was $35,411, an increase of $710 or 2 percent in April over a year ago.
But why are consumers opting for trucks, even if they may cost more than a car?
Cliff Banks, an industry analyst and author of The Banks Report in Fort Lauderdale, said Americans are choosing big vehicles because they feel safer and more comfortable driving them.
“These vehicles are riding much better. They drive like cars today — it’s not that harsh a driving experience. And they’re convenient if you have a family,” Banks said.
David Labella, general manager of the AutoNation Chevrolet in Pembroke Pines, said customers like the better ride.
“In SUVs you’re sitting at a higher point when you’re driving and the feeling is important to consumers. And it’s about size and space,” he said. “They’re a smoother ride because most of the SUVs are on car frames.”
At his Chevrolet dealership, nine out of 17 models are classified as “trucks,” he said. “Horsepower has gotten much better on a truck, they’ve gotten lighter. And gas mileage isn’t much different these days,” Labella said.
Elliot Schor, assistant vice president of sales planning and incentives for JM Family Enterprises, which operates Southeast Toyota and Lexus in South Florida, said JM Family is seeing a similar trend in truck sales. He said closing the efficiency gap with passenger cars is one reason.
“Now you don’t have to sacrifice fuel efficiency to get into an SUV,” he said.
But he said JM Family’s current sales mix in the Southeast — Georgia, Florida, the Carolinas and Alabama — is 54 percent trucks, up from 52 percent a year ago. Still, midsized sedans were up 27 percent over the year in April, led by the redesigned 2018 Camry, released last year.
“The all new Camry has bucked the trend,” Schor said.
But in SUVs, “the new Toyota C-HR, which debuted last year is driving a lot of our growth,” he said. The C-HR is an entry-level SUV, and is smaller than the Rav-4. He said younger buyers are attracted to the vehicle,
which starts at $22,500. Rav-4, which starts at about $24,000, has seen a 6 percent increase in sales over the last year.
In light trucks, Toyota’s Tacoma sales were up 25 percent, Schor said.
Schor said SUVs also are popular in luxury vehicles, including the Lexus NX, a compact luxury SUV that starts at about $36,000.
Even as gas prices have moved up in recent months, consumers have not changed their preference for trucks, dealers say.
The average price for a gallon of unleaded, according to AAA, reached $2.84 on May 10, the highest level in more than three years. In Palm Beach County, the average price is $2.89; in Broward, $2.83 and in Miami-Dade, $2.49.
Still, prices are nowhere near the $4-a-gallon level in the summer of 2008, experts said.
“At what price point do people start shifting toward passenger cars?” Schur asked. He’s not sure, but he thinks consumers tend to pay more attention to round numbers, such as when gas hits $3 or $3.50 a gallon.
“It’s a psychological price point,” he said.