Detroit Auto Show: Firms bet on trucks to boost US sales

From BBC - January 16, 2018

Carmakers are focusing on pickup trucks and SUVs as they seek to counter falling sales in the US.

Sales of new vehicles in the world's second-largest market dropped 2% last year to 17.2 million, the first fall since 2009.

This year is expected to see another fall in sales, so carmakers are focusing on the American stalwarts of pickups and SUVs.

Pickup trucks tend to enjoy more robust sales and have higher profit margins.

General Motors, Ford and Fiat Chrysler have all rebooted their pickup truck offerings at the Detroit Auto Show this week, while BMW and Lamborghini are among those unveiling new SUVs.

Pickup trucks account for about 15% of the US market and have higher profit margins. Jonathan Smoke, chief economist at Cox Automotive, said sales of the models also tend to be less cyclical than other kinds of cars and the models appeal to buyers - like construction contractors - that are poised to benefit from new US tax cuts.

However, SUVs already account for more than 40% of US sales, and next year carmakers will be facing an influx of cheaper, used SUVs that could undermine sales of newer models.

"We think 2018 is going to be challenging for the kind of growth that segment has enjoyed," Mr Smoke said.


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