While US economy slides, heartland auto dealers cry out for more trucks

Noah Wolter, general manager of Charles Gabus Ford, shows off an F-Series truck that he says are selling really well because of hefty discounts and interest-free loans provided by Ford Motor Co., in Des Moines, Iowa, US. REUTERS

Jerry Bill is worried the novel coronavirus could hurt business at the Des Moines auto dealership he runs, but not because of a shortage of buyers for the big Ram pickups on his lot.

“Our biggest issue will be if we don’t get more inventory,” said Bill, general sales manager of Stew Hansen Chrysler Dodge Jeep Ram, which sells around 2,700 new vehicles a year in Urbandale, a suburb of Iowa’s capital Des Moines.

After a drop in sales in April when consumers stayed home, Bill expects pickup truck sales to end May similar to where they were a year earlier. 

And if demand remains strong, Bill said he will run out of popular models in June. Fiat Chrysler Automobiles NV began slowly restarting Ram truck assembly lines on Monday after a two-month shutdown.

The US economy contracted in the first quarter at its sharpest pace since the Great Recession of 2007-2009 because of lockdown measures aimed at slowing the spread of the coronavirus. Economists warn the second quarter will be much worse.

Still, far from the lockdowns of states like New York, Michigan or Ohio, dealerships like Stew Hansen have provided FCA and Detroit rivals General Motors Co and Ford Motor Co  a rare bright spot: strong sales of pickup trucks in America’s heartland.

Noah Wolter, general manager of Charles Gabus Ford, shows off an F-Series truck. REUTERS

Overall US sales of cars and light trucks crashed to the weakest pace in 50 years last month. But sales of big Detroit brand pickups, particularly in southern and western states less affected by the outbreak, significantly outperformed the market, industry executives and analysts said.

Pickup trucks are one of the most profitable automotive segments in the world. They account for a huge portion of the Detroit automakers’ profits and formed a huge lure for Peugeot S.A., which expects to merge with FCA by early 2021.

The pressure is now on to boost pickup truck production and send vehicles to dealers in parts of the country with dwindling supplies.

That is particularly true for GM, which is running short of certain truck models after losing 40 days of production to a strike last fall.  

“If you don’t have what someone wants, they can choose to go to another brand,” said Cox Automotive analyst Michelle Krebs.

Jerry Bill, general manager of Stew Hansen Chrysler Dodge Jeep Ram, poses among a line of Ram trucks that he fears will be in very short supply by June if consumer demand remains strong, in Urbandale, Iowa, US. REUTERS

Detroit automakers in March rolled out large discounts — such as interest-free loans for seven years — to keep vehicles rolling off dealer lots.

“A lot of people that have two-year-old trucks can get into a new one for the same (monthly) payment or lower,” said Noah Wolter, general manager of Charles Gabus Ford in Des Moines, who sold around 1,500 new vehicles last year. “That’s the easiest swap ever.”

Demand for large pickups “is running incredibly strong,” Ford US sales and marketing chief Mark LaNeve said. Large pickups accounted for 21 percent of all US vehicle sales in April, up from an average monthly proportion of 13 percent to 14 percent.

At Stew Hansen in Urbandale, Jerry Bill said thanks to discounts, customers have been able to get a $55,000 Ram truck for $44,000. That has encouraged some to switch out of SUVs or cars into newer truck models kitted out more like luxury vehicles than the workhorse trucks of old.

Mike Koval, interim head of the Ram brand at FCA, said inventory of certain versions of its Ram trucks were “running a bit lean” but the automaker was focused on boosting inventories in states where dealers have stayed open throughout the coronavirus outbreak.

Carl Moyer, owner of Karl Chevrolet in Ankeny, Iowa — the second-largest Chevrolet dealer in America with sales of 4,000 new vehicles a year — said he started off the crisis heavy on inventory. That cushion is gone, he said.

Asked when he would start worrying about getting new trucks from GM to replenish his supply, Moyer said simply: “Today.” (REUTERS)

Related post

2022 KTM Adventure 390 launched in India

KTM has officially revealed the updates on the Adventure 390. The all-new 2022 Adventure 390 comes with major upgrades to the bodywork and features, such as the addition of two-mode traction control: street mode and off-road mode.

Read More

TVS Ntorq 125 XT launched in India

TVS Motor Company has launched its new scooter–the Ntorq XT–in India. The newly launched scooter is the company’s most expensive model in its Ntorq-125 series. The XT is based on Ntorq’s disc brake variant, but comes loaded with new features and technology. The scooter has been launched in India at a starting price of INR 1.03 lakh.

Read More

Ioniq 5, Kia EV6, and Taigun nominated for the 2022 World Car Awards

The Hyundai Ioniq 5, Kia EV6, and Volkswagen Taigun have all made it to the 2022 World Car Finals in their respective categories. The Ioniq 5 has been nominated in three different categories, the EV6 in two, and the Taigun in one.

Read More

GWM Haval H6 earns five-star ANCAP safety rating

Great Wall Motor’s (GWM) HAVAL H6 has received high scores in the rigorous Australasian New Car Assessment Program (ANCAP) crash test,

Read More

Komaki debuts in Nepal with two electric scooters–the Venice and the SE

Komaki Electric Vehicles, the Delhi-based EV maker, has debuted in Nepal with the launch of two electric scooter models: the Venice and the SE. Unity Trading Concern Pvt. Ltd has taken the role of distributing the Komaki Electric vehicles in the country. Design The Venice, a retro-styled scooter, comes with a circular LED headlight, LED […]

Read More

Shadow Top Brand Shadow