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post #1 of 5 (permalink) Old 06-19-2008, 08:49 PM Thread Starter
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New F-150, Ram in peril as big pickups collapse

From Automotive News:

A wild ride as market flips to small cars

New F-150, Ram in peril as big pickups collapse
Mark Rechtin
Automotive News
June 10, 2008 - 12:01 am ET


The collapse of the full-sized pickup segment comes at a disastrous time for Ford and Chrysler as they prepare to launch redesigned pickups this fall.
The segment is expected to shrink by about 500,000 units this year to as low as 1.65 million. That's a far cry from the 2.5 million in the peak years of 2004 and 2005.

Ford Motor Co. and Chrysler LLC have been counting heavily on the replacements. The Ford F series is Ford Motor's best-selling vehicle, and the Dodge Ram is Chrysler's. The companies are scrambling to sell down 2008 inventories in the teeth of a perfect storm and reassessing what to expect when the new pickups arrive.

"This is the worst-case scenario for launching a large pickup truck," said Jeff Schuster, executive director of forecasting at J.D Power and Associates. "It is one of those cases where all the planets align."

Even devoted big pickup owners can't afford new ones because trade-in values are plummeting as demand weakens.

A respondent to an Automotive News dealer survey cited a buyer who last month traded in a diesel-powered, 2005 General Motors heavy-duty pickup with 51,000 miles and got only $9,000. Kelley Blue Book puts the average trade-in value for a heavy-duty Silverado or GMC Sierra with a diesel at about $17,000.

Personal-use buyers are turning away in droves, and many work truck owners who rely on large pickups can't afford to buy new ones. The professional users have been hammered by a downturn in the construction industry and the rock-bottom residual values for the used trucks they'd like to trade in.
J.D. Power projects a mild recovery for the segment in 2009 to about 1.8 million to 1.95 million units. But Schuster warns that a major turnaround might not come for several years if at all.

"All of our previous assumptions on the full-sized pickup segment are off the table," said Bob Carter, general manager of Toyota Division, which entered the segment with the full-sized Tundra last year. Until recently, Toyota had insisted that the Tundra would see mild sales growth this year, but now it forecasts a decline.

The problem is exacerbated because huge numbers of pickup owners owe more on their trucks than the vehicles are worth, and the value is dropping. In May, 41.2 percent of buyers trading in full-sized pickups were upside down compared with 35.2 percent in May 2007, according to Power data.

No other segment comes close to that level.

The percentage of full-sized pickup owners who traded in full-sized trucks for new ones dropped from 64 percent to 53 percent in May compared with the same month last year, says Power. Many opted for sedans or crossovers.
That adds to the glut of new trucks on dealer lots.

And the large pickups that do sell are bringing in less cash. Power says transaction prices for large pickups fell 9.3 percent from May 2007 even as industrywide transaction prices for all vehicles last month were flat.
Sales in the segment have collapsed in the past three months. Last week, after a May in which F-series sales plunged 30.6 percent to 42,973, Ford offered employee pricing for the F-150, F-250 and F-350.

"The most important thing is to just bring down the production but also have a very successful launch," said Ford CEO Alan Mulally. "Later on, we'll figure out what is the right (production) footprint for the long term."

Ford, which sold 690,589 F-series units in 2007 and 901,463 as recently as 2005 figures to sell well below 600,000 this year. That's a huge hit to the bottom line. Industry analysts estimate that Ford earns a pretax profit of $8,000 to $10,000 on each F-series pickup it sells.

George Pipas, Ford's sales analyst, said there is no point in publicly trying to forecast pickup sales "until we begin to get our arms around where it is going to land."

On June 1, F-series inventory was 226,000 units, a horrendous 142-day supply. Dodge Ram inventories were 103,612 units, also a 142-day supply.

Chrysler remains hopeful for a turnaround.
"Whenever gasoline prices spike, there's a free fall in the truck segment," said Mike Accavitti, director of the Dodge brand. "But the market is still sizable."
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post #2 of 5 (permalink) Old 06-21-2008, 04:21 PM
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Build a dam Reg cab SLT 4x4 Hemi with a 8 Foot box once and a while. Dam my father has been looking for one. The last 2 weeks and can't find any. Only 2 base 2x4 4.7 models out of hundreds and hundreds pickups in the Twincities. Idiots ( Chrysler ) Const workers need 8 foot box trucks, not 6 foot ones. My old man has had a few buddies the last few months. That have switched from Dodge, too Ford and Chevy. Because they could not find a Dodge 1500 reg cab pickup. Mopars loss and other auto makers gain.

Mine 2012 Black Challenger SXT. Hers 2005 Red V-6 Mustang, the Son 1997 Red Plymouth Breeze
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post #3 of 5 (permalink) Old 06-24-2008, 06:13 PM Thread Starter
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Crazy ain't it Spook ??? Makes you wonder.
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post #4 of 5 (permalink) Old 06-24-2008, 09:29 PM
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The Trep value will rise, risE, riSE, rISE, RISE!!!!
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post #5 of 5 (permalink) Old 06-24-2008, 10:08 PM
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Maybe that is why I had a message from the dealership today offering to buy my 2000 ES off of me...
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