BusinessReport.com

To borrow liberally from Elton John’s “Levon,” The New York Times says trucks are dead.

Well, not dead exactly. But a June story in the paper accompanied by the headline “Caution: Lower truck sales ahead” makes a compelling argument about the pending decline in truck sales.

At the time the article was published, pickup trucks sales were down 5% this year, twice the decline the automobile industry as a whole was seeing in sales. Sales figures for June have truck sales down 6% from last June while car sales stayed relatively flat.

“It’s hard to surprise me,” says Eric Lane, vice president of Gerry Lane Enterprises, “and that surprises me.” Lane’s surprise is shared by truck dealers throughout the city who say that sales are still going strong.

The recent release of June sales figures show a huge drop for General Motors pickups, which are down 22.9%. But at Gerry Lane, GMC truck sales are actually up by about 70 units for the year through May, Lane says, about a 20% increase over 2006. Its Chevrolet truck sales are up 30 units for the same time frame.

While Ford saw a three-quarter-long downward trend continue in June, truck sales were up 2.6% over last year. Nissan and Toyota both saw upward trends in pickup truck sales in June, with the Toyota Tundra jumping 146%.

Overall, the truck sales at Team Toyota in Baton Rouge are down a bit for the first and second quarter compared to last year, says sales manager Butch Falcon, but sales are still up 15% over a strong 2005. Tacoma is “taking care of itself” sales-wise, and the introduction of the Tundra with variable features previously unavailable in Toyota trucks creates a bigger draw for the dealership.

“We’re seeing customers we never saw before,” Falcon says.

Heath Whittington recently made the move to a Nissan Frontier king cab, his third consecutive truck purchase. He is, simultaneously, an illustration of why people are supposedly making the move away from trucks and why they continue to buy them.

His previous truck, a Dodge Ram 1500, was starting to put a dent in his finances. “The gas was just eating us alive,” Whittington says. But having to drive a family, carry equipment necessary for his job as the head baseball coach at St. John in Plaquemine and make the move from Prairieville to Grosse Tete meant that a pickup truck was an essential.

“I got this one with a king cab because it was pretty competitive [price-wise] with smaller trucks,” he says.

Lane says more customers are coming into the dealership asking about gas mileage than they were previously. Truck technology is catching up to at least make the vehicles adequate when it comes to miles-per-gallon efficiency, but it’s rarely the ultimate factor in a purchase decision. “They’ve become more gas-mileage aware,” Lane says, “but if somebody needs a truck, they need a truck.”

Trucks have traditionally sold for usefulness over looks, and that behavior is becoming even more of the norm for buyers. Market research referenced in the newspaper article shows the number of people buying trucks primarily for looks has dropped by almost half over the past six years to 16%.

Falcon estimates less than 5% of automobile buyers leave with a car after intending to buy a truck or leave with a truck after intending to buy a car. But there is a small demographic of people who end up in trucks as a matter of financial convenience. They come to a dealership simply looking for a vehicle and an opportunity to get out of a negative equity situation. The incentive packages offered on trucks often makes them the most sensible purchase.

And those incentive packages aren’t getting any smaller. The Times article cites industry data that shows the Tundra is being discounted by an average of $2,000 (other sources have that number at $5,000), Dodge Ram discounts have gone up 9% since January to a $6,000 average and Chevrolet Silverado discounts have doubled since the beginning of the year to more than $2,300.

The rebates will continue to climb as gas prices and environmental awareness follow the same trend, adding more doubt into a potential customer’s mind as to whether buying a pickup truck is the correct decision.

“These vehicles have been driven by rebates for the last 20 years,” Falcon says. “People will not buy if there’s not a rebate.”