There are 225 million licensed drivers in the U.S with 85% of total adults. And they drive 278.1 million vehicles, made of 158.6 million light trucks and 119.5 million passenger cars that are on the road. The vast majority of the 278 million vehicles are less than 20 years old. Despite the fact that there is a constant flux in the ownership of cars and trucks, currently, the number of cars coming on to the road outpaces those being retired. This expanding vehicle population offers more opportunity for the aftermarket- the industry of specialty car equipment.
Over the next few years, passenger car sales are expected to drop whereas demand for light trucks is expected to increase as the growth in CUVs is coming largely at the expense of traditional car sales. By 2025, SEMA projects that light trucks that include: pickups, SUVs, CUVs and vans, will represent 69% of all light vehicles sold. And if gas prices and the economy don't become limiting factors, light truck sales are expected to continue outpacing passenger cars.
While accessorizing can occur anytime during a car's lifecycle, most modifiers tend to upgrade their vehicles within the first few months of purchasing their vehicle, whether it is new or used. But vehicle preferences are changing and so is this overall landscape with 27% of drivers purchasing specialty-equipment parts each year with 34.9 million households accessorizing their vehicles also on a yearly basis.
Overall, the specialty-equipment market has been growing about 5% per year, reaching a new high of nearly $45 billion in 2018 and it is expected to continue unless prevented by a weakening macroeconomy.
Despite the increasing interest for this trend that will shape the future, electric vehicles comprise less than 1% of light vehicles on the road whereas hybrids are now the only alternative to have a notable share of registrations. So, it will take some time to change the landscape of the U.S. light vehicle fleet.
Opportunities Exist Across Vehicle Segments
Pickups remain the largest segment for the industry and besides being a versatile platform for accesorization, they are the most common segment on the road and are expected to sell well in the future. CUVs are an emerging opportunity with a lot of them on the road and their popularity growing further, and supposedly they will be accessorized similar to SUVs. But despite the growth of CUVs, full-size pickups remain the most common vehicle subtype on the road. In 2018, pickups are what drove the most sales in the specialized equipment sector.
Tops Vehicles For Accesorization – Pickups
Based on its opportunity scores, full-size pickups top the overall list as they are the perfect platform for accessorization, both in terms of utility enhancement as well as ‘enthusiastic' additions.
General Motors Company (NYSE: GM) is taking first place with its full-size pickup with 17.6 million vehicles in operation. GM is the fourth major company who left the Plastics Industry Association this year possibly due to pressuring environmental policies although they didn't disclose the reason why they didn't renew their membership. The company just unveiled its electric pickup with two BOLT EV batteries. Their Chevrolet E-10 Concept combines vintage style with the futuristic technology needed to achieve zero-emissions.
The second place is taken by Ford Motor Company (NYSE: F) F series pickup with 15.6 million operating vehicles. Ford has also just revealed a one-off electric Mustang for this week's annual Specialty Equipment Market, a place where lots of futuristic prototypes are born. With just two weeks until Ford unveils its first mass-market EV, a Mustang-inspired SUV codenamed Mach E, you can imagine where Ford's multibillion-dollar investment into electric vehicles is headed.
Third place goes to Fiat Chrysler Automobile's (NYSE: FCAU) RAM who just got patriotic with "built to serve" editions that honor the US Military. Its pickup has 7.6 million operating vehicles on the road.
Fourth place is taken also by FCA's Jeep Wranger (2.9 million vehicles), followed by Ford's Mustang (2.2 million), GM's Chevrolet Tahoe (4 million) and Camaro (1.3 million,), FCA's Dodge Challenger (529K), GM's Chevrolet Corvette (814K) and last but not least, Toyota Motor Corporation's (NYSE: TM) Toyota 4Runner with 1.9 million operating vehicles.
But older cars still represent an important market for the equipment industry and there are some notable differences within their rankings as BMW's (OTCMKTS: BMWYY) BMW 3 Series with a long history of model generations appears, as well as Chevrolet's Corvettes make an appearance on that list. Interestingly, it is BMW's new SUV models that boosted the company's net profit that increased 11.5 percent from a year ago to $1.72 billion in the third quarter despite increased spending on electric technology. The fact that revenues increased 7.9 percent is great news after the company was quite disrupted in the same period last year due to new emission policies that impacted costs and distorted its supply chain.
Projected Sales – Optimistic
GM and Ford's market dominance in the pickup segment is expected to continue with sales of an additional 12 million trucks by 2026, followed by RAM Pickup of 3.7 million. But Toyota's prospects are looking up with Toyota Tacoma (1.7 million) – 4th place and Toyota Tundra (769K) 6th place, with Chevrolet Colorado at 5th place (1.1 million). Newer pickups from Toyota tend to get the most attention from accessorizers, especially the mid-size Tacoma.
With 3.2 million Tacomas on the road today and 2 million Tundras, it is an indication that strong market exists for specialty-equipment markets within the Toyota pickup space. On Tuesday, the company announced significant changes in its North America division, such as establishing the Manufacturing Project Innovation Center and naming new leaders to enable its manufacturing team to better respond to customers' needs. The Japanese giant plans to invest $13 billion in its U.S. manufacturing plants by 2021.
Ford Ranger (648K) took 7th place, but the list also introduces Nissan Motor Co's (OTC: NSANY) Frontier (506K). Nissan just unveiled its Ford Ranger Raptor rival, also as a tease for the 2019 SEMA auto exhibition. At the recent Tokyo Motor Show, Nissan executives said the company is working on hybrid technology.
Speaking of hybrid, one of the companies that will surely benefit from this light truck accesorization is Worksport that is owned by Franchise Holdings International Inc. (OTC: FNHI). The company which is one of the fastest growing manufacturers of truck bed covers in the US, just won its third U.S. Patent for innovative and affordable truck bed cover system, surely a monetizable development for the company.
The patented hybrid model will be officially launched later this year. The company also launched a new website in its effort to become synonymous with the experience of driving a pick-up truck. Worksport was launched with a mission to create a brand-new market for all those truck drivers who weren't satisfied with the available market offerings and not only did they succeed in creating that segment, but they have quite a perspective for future growth!
Bright future for pickups- even brighter for specialized equipment!
The conclusion is that consumer demand for pickups is expected to continue well in the future, so they should remain highly accessorized platforms. Yet, as large and often more expensive vehicles, trucks can be more susceptible to changes in the economy. So, in case of a weakening economy, consumers may tend to hold on to their older vehicles or switch to more economical options, but this is even better news for specialized equipment industry.
But provided consumers feel confident in the current economic environment, both pickup sales and of their accessories will continue to grow. So, either way, specialized equipment for light trucks has a bright future ahead!
This Publication is contributed by IAMNewswire.com
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