Gas prices are now down to around $3 a gallon and Americans are snatching big pickups and SUVs at a pace the industry hasn’t witnessed since before the recession. Which is great news especially for the Detroit three.
American automakers have bigger profit margins on pickups and large SUVs than on smaller cars and the trend is forecasted to continue, with auto sales on track to surpass 15.6 million for 2013, which would be the strongest total since 2007.
On Friday, the national average price of a gallon of gas was $3.28, down 23 cents from a year ago. Just a few years ago, Americans were axing pickups and SUVs in favor of smaller cars. Fuel economy is still important, but continued improvements in fuel economy and lower gas prices make it less important again.
“It is no longer a deterrent in terms of a purchase decision,” said Mustafa Mohatarem, General Motors’ chief economist. “We have been seeing that for virtually the whole year.”
In October, sales of light trucks jumped 15% compared with a 6.6% rise for cars, according to Autodata. Sales grew 18% for Ram, 13% for Ford F-Series, 13% for GMC Sierra and 10% for Chevrolet Silverado. Also, the 2014 Dodge Durango posted a 58.5% sales surge as commercials with fictional “Anchorman” Ron Burgundy, portrayed by Will Ferrell, began airing during Major League Baseball’s playoffs and World Series.