“We don’t want cars, we want trucks!”
The appetite for light trucks (the category includes pickups, SUVs, crossovers and minivans) has burgeoned in the last decade. The revival of the compact pickup segment a la the Ford Maverick, Hyundai Santa Cruz and others — marks a new reality in the auto industry — carmakers won’t essentially make cars anymore. The future — or the near future at least — belongs to the light truck.
Today, new trucks are outpacing sales of new cars at a record pace of more than 3-to-1. “We have seen this shift for many, many years, but new factors have accelerated the trend in the last couple of years,” said Colin Couchman, executive director of global light vehicle forecasting for research firm IHS Markit. “Today’s buyers are looking for lower prices and better fuel efficiency. In response we’ve seen a growing number of smaller light trucks that have entered the market and selling well out of the gate.”
THE NUMBERS: Through October 2021, the light truck segment accounted for 75.3% of all new vehicle sales and is on pace to exceed 75% for the full year, according to IHS Markit. For all of 2020, light trucks accounted for 74.8% of U.S. new vehicle sales.
“If They Want Only Trucks, Let Us Give Them Only Trucks”
“A lot of auto manufacturers have really fallen out of cars altogether,” Couchman said. Ford, Dodge and Chevy have announced models cuts, and have nearly quit selling passenger cars in the last three years. They’ll make an exception for sports cars such as the Chevrolet Corvette, the Ford Mustang and the Dodge Charger (Thank God!).
“Light Trucks” — An Exploding Automotive Category
Loosely defined, the category “light trucks” is sort of a catch-all for pickups, SUVs, crossovers, minivans and some smaller delivery vehicles — as opposed to medium and heavy trucks such as bigger delivery trucks and 18-wheelers. Based data through November 2021, light trucks had what appears to be a record high U.S. market share of 77.1% year to date, up from 75.6% for the same period a year ago, according to industry data firm Motor Intelligence. For all of 2020, the total industry light truck share was 75.9% versus 71.7% in 2019.
It”s Not The First Time That Light Trucks Outsold Cars
The auto industry was shocked back in 2002 when light trucks first outsold cars — and the light truck manufacturing mix has mostly climbed ever since. Crossover models lead the way — they resemble SUVs and are built all in one piece with a unibody construction like sedans. The Toyota RAV4, for example is an early, SUV-style crossover, built on the same platform as the Toyota Camry. However early SUVs like the original Ford Explorer were built just like pickups, a body mounted on top of a steel frame — referred to as body-on-frame construction. The current generation Ford Explorer is built with unibody construction, but it looks more like a boxy SUV rather than a bulbous crossover or sleek sedan. The unibody construction produces a car-like ride and better fuel efficiency than body-on-frame construction because it’s lighter.
U.S. Automakers Say ‘Goodbye’ To The Car Market
It is the U.S. brands that are ditching its car plans (Ford has already discontinued the Ford Fusion and the Ford Fiesta) and moving their resources to designing and building light trucks and electric vehicles. Light trucks to date have accounted for 96% of Ford Motor Co. sales through November 2021, according to Motor Intelligence. Up from 90% a year ago.
Light trucks made up 91% of sales for Stellantis (formerly Fiat Chrysler), year to date through November, according to Motor Intelligence. That was about the same as a year ago. General Motors sales of light trucks through November 2021 grew to 94%, up from 90% a year ago, since it dropped cars like the Chevrolet Impala. The top three Japanese automakers will sell mostly light trucks, but not at the percentages seen by American manufacturers.
The light truck mix for Toyota Motor North America was 68% through November 2021, an increase of less than 1% compared with a year ago. American Honda Motor Co. sold 63% light trucks during the same period, an increase from 59%. Nissan North America Inc. was 65% light trucks, up from 64%, according to Motor Intelligence.
Toyota: “People still want cars”
The Japanese automakers say they’re committed to the passenger car market in the U.S., and they’re happy to face less competition from the domestic brands. “There are still a lot of people who want cars,” said Jack Hollis, senior vice president of automotive operations for Toyota Motor North America. “We think it would be completely against the customer, to walk away from a customer like that,” Hollis said in a recent phone interview. “A lot of competitors have kind of abandoned their car customers.”
“Quite honestly, we see a lot of room for growth” in car sales, he said.
Light Trucks Now 57% of Vehicles on the Road
Meanwhile, it will take many years for the total U.S. population of cars and trucks on the road to reflect the current 3-to-1 new vehicle ratio of light trucks to cars. That’s because today’s cars and trucks are so durable. In October, the average vehicle in operation was 12.1 years old, according to IHS Markit.
Light trucks made up 57.2% of total U.S. vehicles in operation at the end of the third quarter of 2021, up less than 1% compared with 56.6% a year ago, according to data from Experian Automotive. Two years ago, the light truck share was an even 56%.