More Americans are shelling out big bucks for trucks.
“People are spending more than they have to,” Jessica Caldwell, executive director of Industry Analysis at Edmunds.com, told FOX Business. “It speaks well to the overall economic situation.”
The average price of a truck ranges from $37,000 to $45,000, compared to $25,000 to $29,000 for a car.
Growing demand is why GM is “bullish on trucks,” according to company executive Jim Cain.
“One of the things you’ve seen in this economy is consumers are buying what they want," Cain told FOX Business. GM’s average transaction price in the second quarter hit a record $37,126 as tracked by J.D. Power. To capitalize on the trend, the automaker is ramping up production of the Chevrolet Silverado and GMC Sierra to meet demand and take on rival Ford.
Ford’s pick-up truck sales, dominated by the best-selling F-150 line, rose 7.5 percent in the second quarter, the best performance since 2004. The automaker saw an even bigger jump in heavy commercial truck demand, with sales up a whopping 83 percent compared to the same period a year ago. “When work needs to get done” you see demand, said Ford’s Erich Merkel, a U.S. sales analyst, during an interview with FOX Business.
Fiat Chrysler is also seeing robust demand for its Ram trucks. CEO Michael Manley noted on the recent earnings call that the Ram line gained “momentum in the second quarter, gaining share in both the light-duty and heavy-duty segments of the marketplace.” June sales of the Ram leaped 56 percent the best June since 2009 when it separated from Dodge to become a standalone brand.
With the latest rate cut by the Federal Reserve, the first in more than a decade, and unemployment at a record low, demand for light and heavy trucks may continue helping offset lackluster car sales. Trucks and SUVs, according to Edmunds, accounted for 70 percent of all vehicle sales in the second quarter.
Suzanne O'Halloran is Managing Editor of FOXBusiness.com and is a graduate of Boston College. Follow her on Twitter @suzohalloran