April goes Detroit's way
|Jesse Snyder is senior writer for Automotive News|
Pickups are back.
Sales of those honking-big behemoths so unique to North American roads jumped 27 percent in April. And they're up 30 percent in the first four months of the year.
That works for Detroit in so many ways.
First, Detroit is the big sales victor in April: Ford is up 18 percent overall, General Motors and Chrysler, 11 percent. And the 32,116 additional big pickups the D3 sold in April over April 2012 represents 45 percent of companies' sales growth. With pickups, sales at the D3 gained 13 percent.
Without the extra lift from their pickups, the D3 would have posted just a 7 percent overall gain last month, underperforming the industry.
Second, pickups are Detroit's bread and butter. Year in, year out, Ford earns four-fifths of its global profit off the F-series platform while GM earns more than half its global profits from its big trucks, according to J.P. Morgan analyst Adam Jonas. He's silent on Chrysler, but it sells more Ram pickups than it does minivans, its longtime cash cow.
Third, Detroit dominates big pickups. In April, the Detroit 3 sold 144,000 of them. Combined sales of the Toyota Tundra and Nissan Titan: 9,314, dropping the non-Detroit share of the segment a point to 6 percent.
But the pickup surge is actually good news for everybody. It signals the new-housing market is picking up, a primary stimulant to auto sales that has been ice cold since 2009. "Pickup sales are tied to the whole economy but especially new housing," says Kelley Blue Book analyst Alec Gutierrez.
Essentially, pickup sales are a barometer for the whole auto industry.
So when they skyrocket, everybody can expect some fireworks.
You can reach Jesse Snyder at email@example.com.