When the auto industry bailouts occurred, we heard much talk about the need for the automakers to shift their focus toward smaller, more environmentally friendly vehicles. We heard that a focus on trucks and SUVs was the reason for the collapse. Well, where do things stand now in 2013? Ford and GM just reported September sales. Pick-up trucks accounted for 29% of their total vehicle sales in the past month (that does not include SUVs). The chart below, from Bespoke Investment Group, shows Ford pick-up truck sales reaching pre-recession levels:
In the end, companies produce what consumers demand. The evidence suggests that consumers in the US still like their trucks. Will things change if gas prices spike once again? Surely, they will. How are Ford and GM positioned to respond to such a future shock? It appears Ford is in a better position, even though it actually has the leading market share in pick-up trucks. Ford has higher margins in the US, and thus, more room for error. Moreover, it has several well-regarded passenger vehicles that offer strong gas mileage. Time will tell, but the story here certainly reinforces the notion that, in the end, the customer is boss. Companies deliver what customers want, and like it or not, many American consumers still want their trucks.