What a bubbly month August turned out to be.
Good news pretty much anywhere you look. U.S. auto sales up. Lotsa folks won big percentage gains. Average transaction prices rose more than incentives. And a Labor Day surprise pushed the month beyond merely matching last year’s blowout August into the best monthly selling rate since January 2006.
But forget the normal scorecard of unit sales. Let’s look at some real winners: trucks, and the automakers that have more of them.
It’s no secret that General Motors, Ford Motor Co. and Chrysler Group dominate the lucrative full-size pickup segment. But other trucks also generally have better margins than cars.
Industry nomenclature hasn’t caught up with the reality of trucks, crossovers and cars -- confused by changes in laws, regulators and construction processes. By trucks, I mean all the pickups, crossovers, SUVs, vans, minivans and sport-whatevers that are not sedans or coupes.
To me, if the driver’s butt is within 15 inches of pavement it’s a car. Call them sit-highs and sit-lows.
Or, if you wish, pay-highs and pay-lows.
That seating dichotomy increasingly defines the U.S. auto market, says TrueCar President John Krafcik.
“Cars have become a commodity product,” he said today. “A crossover with the same length and width as a sedan has more room. And people are willing to pay $5,000 or $6,000 more for that added utility, for something that costs the manufacturer about $1,000 in added cost.”
That consumer willingness to pay a premium for vertical space explains the flurry of taller vehicles virtually all automakers are scrambling to introduce. Through eight months, trucks’ share of the U.S. market is up to 51.0 percent from 49.0 percent a year earlier.
In short, get trucky to get lucky.
The obvious winner is Chrysler, up 20 percent in August and 14 percent for the year. But even that understates Chrysler’s good fortune. Because Chrysler’s sales mix is more truck-heavy than any major automaker -- and it’s gotten even truckier so far this year, hitting 78.4 percent not-car in August. Through eight months, Chrysler’s truck mix is 76.7 percent, more than 9 points higher than the 67.5 percent it had this time last year. Chrysler is riding the Ram pickup and its new Jeep Cherokee to higher margins.
But look at two others down in the scrum of 2014 sales underachievers. GM was down a percent in August. But it’s truckier, up a half point to 61.5 percent year to date and up three points to 63.6 percent trucks in August.
Ford unit sales were flat in August and year to date, but its truck sales mix is up almost a point to 65.7 percent this year.