Do Current Truck Sales Predict the Death of the Car?
21 September 1999
Do Current Truck Sales Predict the Death of the Car? Polk Profiles Car And Light Truck Trends, Vehicle Ownership Patterns of U.S. Households
DETROIT, Sept. 21 -- Is the death of the car looming on the
horizon? Recent analysis by The Polk Company found that, based on current
trends, it could very well be. If the market share of light trucks was to
maintain its growth rate of the past decade, more than two in three new
vehicles sold by 2010 would be trucks. This figure would then reach the 100-
percent mark by 2025 -- with nothing but light trucks being sold.
For years the family car in the United States was a sedan, or maybe a
station wagon. Now, the family car is a truck. In 1970, U.S. automotive
sales were comprised of approximately 85 percent cars and 15 percent light
trucks. With the popularity of the Minivan in the 1980s, followed by the
Sport Utility Vehicle in the 1990s, several manufacturers now sell primarily
trucks. DaimlerChrysler, for example, sold two trucks for each car last year,
while Ford and General Motors sold approximately 60 percent and 46 percent
light trucks, respectively, in 1998.
LIGHT TRUCK/CAR SALES BY MANUFACTURER
Manufacturer 1970 1980 1990 1998
GM Trucks 17.0% 18.4% 35.2% 46.1%
GM Cars 83.0% 81.6% 64.8% 53.9%
Ford Trucks 23.1% 35.2% 43.1% 59.5%
Ford Cars 76.9% 64.8% 56.9% 40.5%
Chrysler Trucks* 9.2% 29.1% 51.8% 67.4%
Chrysler Cars 91.8% 70.9% 48.2% 32.6%
Truck Totals 14.8% 20.1% 32.9% 47.2%
Car Totals 85.2% 79.9% 67.1% 52.8%
* DaimlerChrysler figures for 1998.
Source: Polk
As noted earlier, the industry would reach the 100-percent truck sales
mark by the year 2025 if the current increase in market share was to continue.
No one expects this to occur, but just how far can this trend go?
"Economic factors such as rising income and low fuel prices have
contributed to the popularity of trucks," said Ken Cherven, an automotive
industry analyst at Polk. "Many of the popular models are more expensive than
a mid-size car, and with much lower fuel economy. Economists talk about the
middle-class 'wealth effect' of rising housing prices and higher participation
in the stock market," he added. "Many middle-class families feel they can
afford a large vehicle with higher operating costs."
Lifestyle changes can also influence vehicle choice, Cherven noted.
"The growth of edge cities and remote suburbs put the modern family in
more rugged terrain for housing and hobbies. Let's face it, even today's city
and suburban roads are a challenge for small vehicles."
The Baby Boomer generation appears to be leading the way in terms of light
truck popularity, based on Polk's registration figures from the second quarter
of the 1999 model year. Among buyers of hot-selling SUVs, Boomers led the way
at 59.8 percent, followed by the Gen-Xers at 22.1 percent and the Mature
Market with 18.1 percent. Polk analysis projects SUV sales to climb steadily
throughout the 2000 calendar year, with a projected sales increase of nearly
four percent in the next year. Looking at the SUV market long-term, the much-
anticipated new product launches in the 2000 and 2001 calendar years, as well
as existing model redesigns, are expected to result in a dramatic increase in
SUV sales during 2001. In total, eight new SUV models are slated for
introduction during 2000, with five more unveiled in 2001. Six existing model
redesigns are expected in 2001.
"With the cross-functionality of the newest model introductions and the
current strength of the economy, the continued growth of the SUV market is
inevitable," said Cherven. "The increased SUV sales are expected as a result
of a shift from mid-size and sporty cars within the car segment, and from
pickups and full-size vans within the truck segment."
Another trend influencing the popularity of trucks is the growth of
multiple-vehicle households in the U.S. The number of people in a household
remaining stable, combined with a strong, growing economy, has enabled the
number of vehicles per household in the U.S. to grow from 1.2 in 1960 to 1.9
in 1998. As a nation, the U.S. has moved from households owning one car to
households owning one car and one truck. This increase in ownership
translates into the sales figure of nearly 15 million vehicles that has
occurred the last five years.
NUMBER OF VEHICLES IN U.S. HOUSEHOLDS*
Number of Vehicles Pct. of Households
0 14.5%
1 24.0%
2 36.2%
3 14.2%
4 6.7%
5+ 4.4%
Source: Polk *CY1998
"While we recognize the popularity of trucks today in conjunction with the
increase in the number of vehicles owned, it's interesting to find that
households owning only one vehicle still have a stronger bias toward car
ownership," said Cherven.
Polk data indicates that 70 percent of households possessing a single
vehicle in 1998 owned a car. At the same time, the likelihood of a household
owning a truck rises from 30 percent to 40 percent when vehicle ownership
increases from one vehicle to two.
"The average family is likely to choose a car if they can only own one
vehicle," said Cherven. "Although the numbers continue to decrease, the most
important or basic vehicle is still the car. However, there are increased
preferences for trucks when adding another vehicle. The attraction may be the
extra space for carrying passengers or cargo. The average truck is also
larger, more powerful and safer than the average car."
Just how far America's fascination with trucks can go remains to be seen.
Automotive manufacturers want to know if the thirst for trucks or truck-like
vehicles has peaked, or if it will be a continuing trend in the future.
"In the near future, there are no indicators which point to a reversal,"
Cherven said. "Oil prices are stable, economic growth is steady and more
Americans are feeling affluent than ever before. Changing tastes seem to be
the biggest threat to truck sales -- when will 'big' become unfashionable in
the U.S.? That's difficult to determine."
Polk provides multi-dimensional intelligence information solutions to
companies as a statistician for the motor vehicle industry; as a direct-
marketing resource; as a supplier of demographic and lifestyle data and
database-marketing services; as a publisher of city directories; and as a data
enabler for geographic information systems. Based in Southfield, Mich., Polk
is a privately held firm founded in 1870 that is expanding globally, currently
operating in the United States, Canada, England, France, Germany, Australia,
Spain, Holland and Costa Rica.