Texas truck sales uptick seen as bellweather for auto sales?
2009 Ford F-150 - Click above for high-res image gallery
When auto sales began to circle the drain in 2008, no single segment was hurt more than pickup trucks. Sales were cut in half in many instances, pummeling the domestics from Detroit more often than their foreign competition. Truck sales even dropped in Texas – easily the world's largest market for all things with four wheels, a bed and a V8 engine. Some Texas dealers saw sales drop 30% or more in 2008 and 2009, but some signs point to a turning point for truck sales and perhaps even the auto industry as a whole.
In August, the Ford F-150 saw its first year over year sales increase in three years. Automotive News is reporting that dealers in Texas are reporting more fleet and retail traffic, and one ton trucks are beginning to move off the lot again. Analyst Erich Merkle with Autoconomy.com told AN that the increased truck activity in Texas could mean that the auto industry is on the back swing, and more importantly, perhaps the entire American economy.
As an example of how this could play out, Texas is home to many of our nations biggest ranches. Dealers often sell entire fleets of trucks to these massive ranches, and if they are asking for more trucks, the results will be noticeable in our monthly By the Numbers update. And if ranchers are buying trucks again, that means we're making more things and more money changes hands, which means the economy may be bouncing back to life.
We know it's a bit of a stretch to hang the entire economy on Texas truck sales, but more trucks usually means more building and more construction. We're not sure if that's a bellweather for success, but it can't exactly be a bad thing either.
Gallery: 2009 Ford F-150
_thumbnail.jpg)
[Source: Automotive News - Subs. Req'd]
Get a WordPress.com Blog
Reader Comments (Page 1 of 1)
MajorGeek 9:36AM (9/09/2009)
Is anything NOT a sign of the economy improving? Too bad none of these guys told us to get OUT of the market when we should have. I don't trust any of them.
Reply
Redline 10:36AM (9/09/2009)
Was it not because of everybody getting out that the market crashed?
Randy 10:54AM (9/09/2009)
Are you serious? You needed someone to tell you this?
The big picture is if banks don't loan, nothing can be purchased unless you have cash. If jobs are going away there's a panic and people don't spend the cash they have. Hence the gov gets no tax income. So basically, understanding that their is a hierarchy to the financial world is the first step! The second is to turn on either your radio, tv, web browser and read something more than car blogs! The entire planet knew this was happening! I think if a person that wrote an article that said "Get out while you can" would have been the recipient of about 6 billion emails and letters with the expression "DUH".
MajorGeek 11:05AM (9/09/2009)
No, I am not serious. It was a general, light hearted comment. Chill.
Polly Prissy Pants 11:24AM (9/09/2009)
"Too bad none of these guys told us to get OUT of the market when we should have."
If the last decade has taught us anything, it's that all of these so-called financial experts have no idea what the markets are going to do or how they work. From the dot com meltdown to the housing bubble to Jim Cramer, it's all just a bunch of wild azz guesses. Sure some guessed right and at just the right time, but don't be fooled into thinking those were anything other than lucky guesses. You see all those talking heads on Squawk Box and those experts writing pieces in the WSJ? Give them about as much credibility as you would your uncle Leroy after a 12 pack of PBR.
MajorGeek 11:30AM (9/09/2009)
Sigh.
jv2k 12:33PM (9/09/2009)
Quit sighing. Sarcasm is hard to detect in text and the comment isn't written in a way that indicates that you weren't serious.
crispy 9:52AM (9/09/2009)
Don't bet the ranch on it.
Reply
Avinash machado 9:53AM (9/09/2009)
Maybe Bush is buying the trucks for his Crawford Ranch.
Reply
Randy 10:55AM (9/09/2009)
Why would he start doing something for the United States now? Kinda late don't ya think?
Rboyett 9:53AM (9/09/2009)
Texas has weathered the economic downturn better than any other state. For instance, our home values were not hyper inflated so they held steady or had a small decrease. Unemployment is much lower than the national average. We have no income taxes. God likes us (joking).
If truck sales pick up in Texas, it is because Texas isn't going down an economic black hole at the same rate as other states like California, Nevada, or Florida. When truck sales pick up in those areas we can all start to feel just a small amount of relief.
Reply
miles 10:56AM (9/09/2009)
Maybe it's because Texas's major industry has never been more profitable. (Exxon makes $9billion profit per quarter or some such thing)
Rboyett 11:49AM (9/09/2009)
While you're correct on the oil industry it also shows the diversity of the Texas economy. It used to be that Texas rose and fell on the oil industry alone. That is not nearly the case now. Information Technology, Telecommunications, Transportation, Aerospace and several other industries now have an extremely strong presence in Texas.
I think a good reason for this is the low cost of living and tax rates. People and entire companies are fleeing California and much of the time they are headed right here to Texas.
The welcome mat is out. Come on down (^_^)
Mike 12:13PM (9/09/2009)
If Texas' economy is so recession proof, why did truck sales plummet 30% at the same time the rest of the country's did?
Sure, the housing crisis may not have affected TX as much as states like CA and FL but, as you pointed out, they never inflated like theirs did either. This wasn't because all Texans knew better than to try to overprice their houses, it's because the state didn't have the influx of immigrants (not from other countries but from around the country) to it like CA and FL did, it's still all supply and demand. The level of housing price plummet is almost exactly opposite of the way the prices skyrocketed in an area, little increase in value over the past decade, little price drop in the last 2 years, large increases in the last decade, huge drops in the last 2 years. It doesn't help that the loans that were given out at artificially inflated prices were to people who couldn't afford them and had to default.
The lending issues aren't isolated from TX either, if your credit sucks, you're still not getting a loan no matter where you hang your hat.
Quattrofan 10:06AM (9/09/2009)
I've never seen more pickups anywhere then TX, so yeah.... big surprise they are moving some iron.
Reply
Rich 10:17AM (9/09/2009)
No, it's a sign the economy is down as far as it'll go in Texas.
The most prudent time to invest in infrastructure is when it's cheapest. If Texas is anything like Germany, the truck buying is a sign of construction, which is a sign of that investment. Other types of economy don't seem to get it. (For example, Thatcher's recession saw the selling off of most of the British manufacturing industry, giving the break that the buyers needed to establish themselves, and preventing Britain from re-entering the industry at a later point.)
It would be interesting to see what numbers at night classes and other community classes are like. Are they spiking right now? Otherwise this is just blog waffle.
Reply
bismillah 10:25AM (9/09/2009)
"Bellweather"??? Come on, Autoblog!
Reply
Luis 10:27AM (9/09/2009)
How many traded in old pick-ups for new ones under C4C? Did they qualify?
Reply
Bobmarley 1:16PM (9/09/2009)
Texas is in a their own economic "bubble"...they really havent been hit hard by the last years melt down like the rest of the country. Our central branch in Houston had a record year last year and they supposed to match that this year (which is incredible). Our branch here in Atlanta had a record year last year and we are set to end up in the red this year. When we compare all our branches backlogs and market projections for the next few years, Texas is the only market that is expected to see growth (2-8%) while Atlanta is around -10-20% (negative).
...(I'm talking about the commercial construction industry here)
Reply
joe_thousandaire 1:54AM (9/10/2009)
Maybe this is because the economy in Texas is doing fine. People still have jobs, new buildings are going up and people can afford to drive new pickups. Its basically the opposite of the Obama/Pelosi economy. Free-markets, low-taxes, jobs and growth.
Reply