DETROIT -- U.S. sales of pickups will continue spiraling downward through 2009 and 2010, according to predictions released today by the forecasting group CSM Worldwide.
Sales will bottom out at 1.7 million units, CSM predicted. Sales peaked at 3.3 million units in 1999 and had declined to 2.7 million in 2007, according to the Automotive News Data Center. Sales will recover only to 2.1 million units by 2014, CSM said.
The prediction bodes poorly for Chrysler LLC, which this month launched its redesigned 2009 Dodge Ram, and Ford Motor Co., which plans to send its all-new 2009 F-150 to dealers in November.
The forecasting company cited high gasoline prices and the struggling housing market, which is strongly tied to pickup sales.
Until there is a meaningful recovery in consumer confidence and housing, pickup sales will continue to be weak, CSM senior economist Charles Chesbrough said in a statement. Unfortunately, the housing correction has further to go.
Average home prices have already dropped 10 percent from their peak and may fall another 13 percent to allow for stable growth, CSM said.
Although Ford and Dodge have improved fuel economy, safety and towing, the expensive options and high-end styling the companies have integrated into models will out-price cost-sensitive buyers, such as those filling occupational fleets, CSM said.
And high gasoline prices prevent people from buying pickups if they dont need a truck for day-to-day activities. The most fuel-efficient Rams and F-150s still cost $1,200 to $1,400 more each year to fill with gasoline than many mid-sized sedans, CSM said.
Besides, the forecasting company said, fewer people will be able to purchase new trucks in coming months. Disposable personal income fell 0.5 percent in July compared with the previous year, the forecasting company said, citing the U.S. Department of Commerce. And the Federal Reserve Board says 65 percent of banks have cracked down on lending standards since April, CSM said.
Sales of pickups this year had reached 1.4 million units through August, according to the Automotive News Data Center.