Continued Signs Of Increasing US Economic Strength See The Housing Rebound Spurring Big Three Truck Sales

Thursday, January 10, 2013 07:47
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Continued Signs Of Increasing US Economic Strength See The Housing Rebound Spurring Big Three Truck Sales

Tags: economy | U.S. economy | US investing

The reinvigoration of the housing market is also spurring truck sales. Both Chrysler and GM are seeing a rebound in a market that has struggled to gain traction for the last four years.
 
Home building serves as an economic barometer among those who buy pickups. Housing starts were up 22% in November. This year, truck sales will be up 50% over the 2009 low.

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Ford’s pickup series is responsible for 90% of its global profits. For GM, trucks bring in two-thirds of its global earnings.
 
Trucks are a cash cow for the three auto giants, dubbed the D3. The Detroit Auto Show will feature the latest and greatest and will also introduce a Ford’s new generation F-series pickup.
 
The truck won’t be available until October 2014 but Ford’s strategic sneak peek is designed to take consumer attention away from Chrysler’s restyled Ram 1500 and GM’s new Chevy Silverado and GMC Sierra.
 
In its new F-Series, Ford is hoping to once again command leadership in fuel economy by slashing mileage of F-Series trucks by 20%.
 
The new focus on fuel economy and smaller engines is an about face for buyers who used to think bigger could only be better.
 
Morgan Stanley is predicting that housing starts will top 1 million this year, expanding the pickup share of the truck market. Analysts say the truck market could rebound to its 2005 peak.
 
Both the housing sector and auto sector are reflective of increased economic strength after the 2008 crisis that resulted in the bankruptcy and government bailout of both GM and Chrysler.
 

As of January 2012, the government still owned less than 30% of the companies. You can read an economic analysis of the entire GM and Chrysler bankruptcy story here.

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