Plunge in pickup sales

By Greg Bensinger  |   2008-6-23  |     NEWSPAPER EDITION

PLUNGING prices for used pickups and sport-utility vehicles are deepening the sales slide of car makers in the United States, with Ford Motor Co being the latest to feel the pinch.

Gasoline near US$4 a gallon helped send prices for used large pickups and SUVs tumbling at least 21 percent in May, Atlanta-based Manheim Consulting estimates. That cuts trade-in values, pushing light-truck sales down 16 percent in 2008, compared with less than 1 percent for cars.

"Regular consumers don't need larger SUVs or pickups; it's a lifestyle choice," Standard & Poor's equity analyst Efraim Levy in New York told Bloomberg News.

"If it's getting to be a bad investment, it's not worth buying a new one right now."

Detroit auto makers are vulnerable to the drop in pickup and SUV sales. They depend on those models for almost 70 percent of their sales and a greater share of profits than Asian competitors such as Honda Motor Co.

Industrywide sales declines led by trucks helped spur Ford's forecast last week for a wider 2008 loss. The second-largest US car maker said it will pare output by as much as 25 percent and delay unveiling the latest version of its top-selling vehicle, the F-Series pickup. Auto-loan unit Ford Motor Credit also will post a loss, Ford said.

June auto sales in the US may drop to 12.5 million, their lowest annualized rate in 15 years, according to Citigroup analyst Itay Michaeli, 20 percent below June 2007 levels.