Report: Record growth recorded in full-size truck segment
Truck wars heat up as Ram pickups outsell the Chevy Silverado and more options, amenities draw in a rapidly expanding base of shoppers.
SANTA MONICA, Calif., Feb. 27, 2020 /PRNewswire/ — Trucks are making a big comeback, according to a new report released by the car-shopping experts at Edmunds.
Edmunds data reveals that market share for full-size trucks hit a 14-year high in 2019, constituting 14.5% of the new vehicle market, and full-size truck sales climbed to 2.4 million in 2019, which represents a 123% increase from 2009.
According to Edmunds experts, the strength of the economy, lower gas prices and stable interest rates, combined with an explosion of options and amenities in the segment, have helped drive full-size truck sales to post-recession record levels.
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“Shoppers used to think of trucks primarily as bench-seat utilitarian vehicles, but today, every creature comfort that one would expect or want in a luxury vehicle is now available in a truck,” said Ivan Drury, senior manager of insights at Edmunds.
“The range of options available in the full-size truck market right now is catching the eye of buyers with more discretionary income, and many of them are ditching their SUVs to make the jump. And since full-size trucks retain their value so well, once a shopper gets pulled into the fold they’re more likely to remain loyal to the segment.”
Edmunds data reveals that full-size trucks have outpaced other segments in price growth because more shoppers are opting for higher trim levels, features, and physically bigger trucks overall.
In 2019, the average transaction price (ATP) for a full-size truck was $49,888, more than $12,500 higher than the industry average of $37,310. Ten years ago, the ATP for a full-size truck was $34,987, which was $6,300 higher than the industry average of $28,609.
“There’s no question that truck shoppers are willing to dig a bit deeper into their wallets to get what they want, and prices look like they’re only going to continue rising,” said Drury.
The Edmunds 2020 Truck Report also takes a deeper look into the fierce competition brewing between the biggest players in the truck segment, with a particular focus on how the perennial third best-selling truck, the Ram pickup, outsold the perennial second best-selling truck, the Chevrolet Silverado, for the first time in 2019.
- Ram offers a broader range of configurations at different price points for the Ram 1500 Classic, appealing to a wider consumer base. The Ram 1500 Classic has achieved success with 46 configurations and it’s treated as a true second model — nearly $10,000 separated the average transaction prices of the Ram 1500 and the Ram 1500 Classic in 2019. The Chevrolet Silverado 1500 LD by contrast offers seven configurations and, as a result, its transaction price differed from the Silverado’s by about $4,000 during the same period.
- Ram leverages leasing to expand the buyer base. With truck prices on the rise, Ram saw an opportunity to promote leasing of its trucks, as an effective backup choice for more price-sensitive shoppers or first-time truck buyers. Lease penetration for the Ram 1500 hit a record high of 33% in 2019.
- Ram is capturing younger shoppers. Ram has also increased sales due to winning over the most coveted section of the market: people under 35. And according to Edmunds data, Ram 1500 Classic buyers on average pay the highest interest rates and roll more negative equity into their loans than buyers of any other full-size truck.
- Ram 1500 is grabbing more Silverado 1500 trade-ins. The Silverado 1500 still holds the crown for most purchased vehicle by shoppers who traded in a Silverado 1500, followed by the GMC Sierra 1500. But the Ram 1500 has ascended over the last two years, edging out the F-150 for the third spot.
“Ram has — for now — successfully captured a larger swath of the truck market, which is crucial for the future of FCA and the Ram brand,” said Jessica Caldwell, executive director of insights at Edmunds. “But the competition doesn’t stop here: The horizon is filled with a slew of battery electric trucks that nearly outnumber current truck offerings. The truck wars are only going to get more heated as traditional automakers seek to protect themselves against the crop of new competitors hoping to get a piece of such a lucrative, profit-heavy market.”
To read the full report, visit the Edmunds Industry Center here: https://www.edmunds.com/industry/insights/.
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