Bloomberg - Gas Prices Destroyed Demand for Trucks; I Say They Missed A Big Issue

Discussion in 'Wall St. News' started by ByLoSellHi, Aug 4, 2008.

  1. They didn't even mention the housing repression (my word; a hybrid of mine meaning in between recession and depression).

    With so many contractors down and out, you'd think they'd mention the construction industry as a cause for plunging truck sales.

    Gasoline's Surge `Eviscerated' Light-Truck Sales: Chart of Day

    By Doron Levin

    Aug. 4 (Bloomberg) --
    The financial meltdown of U.S. automakers is largely the result of collapsing sales of the industry's most-profitable models: full-size pickup trucks, large sport-utility vehicles and minivans.

    In their heyday, these light trucks from General Motors Corp., Ford Motor Co. and Chrysler LLC yielded pretax income of $10,000 or more per vehicle.

    The automakers' ``profitability has been eviscerated,'' said Brian Johnson, an equity analyst for Lehman Brothers Holdings Inc. ``The Chevy Suburban, Ford F-Series pickup and Dodge Ram truck were the industry's mainstays.''

    The chart of the day shows that sales of these vehicles plunged as the price of gasoline rose.

    Sales of light trucks reached a monthly peak of 1.1 million units in July 2005. That month unleaded gasoline sold for an average of $2.28 a gallon. Since then, the price of gasoline has climbed to about $4 a gallon.

    Sales of light trucks over the same three-year period dropped by about half, falling to 512,841 units in July as consumers switch to lighter, more fuel-efficient cars or delay their purchases.

    Japanese and European automakers have been less affected than domestic automakers by the surge in fuel prices because a smaller proportion of their U.S. sales come from light trucks.
  2. S2007S


    I came up with (De) cession...



    Registered: Aug 2006
    Posts: 6921

    07-14-08 07:16 PM

    Mild Depression or what I would call a "(De)cession"
  3. Some observant ET'r posted a Nissan car dealer ad from SC that posted 50% off trucks.
    I can't wait to get a new fully loaded Escalade for $12000 !
  4. S2007S


    Yea they are giving them away.....

    Free suvs to all.
  5. You're exactly correct BLSH. Plunging truck sales are systematic of a lagging trades industry. Soccer Moms aren't going to downsize into a smaller vehicle so they can save a few hundred a year in gas costs. Actually it makes better economic sense to buy a gas guzzler at a deep discount and then pay the price at the pump. The old penny wise dollar foolish thing.....
  6. balda


    Of course it depends on a mileage but for an average owner of a hybrid Camry it will take 8-10 years to break even with gas guzzler.
  7. thats what im thinking. Thinking about getting a new SUV.