Which Brands Can Best Weather Declining Truck Market?

May 28, 2008

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DETROIT — Though light-duty pickup sales are down by a significant margin over last year, a recent study suggested that thanks customer loyalty and numerous other factors, the truck brands most likely to overcome this soft market are domestics.

An Acxiom Corp. study found that while this vehicle segment has shown year-over-year sales declines of almost 17 percent through April, owners of Big 3 brand trucks "are much more loyal to their truck and brand than are consumers of import brand trucks."

The Automotive Consumer Dynamics study analyzed more than 19 million consumers who dub themselves "truck people" and discovered several indications that domestic brands are better positioned in the truck market.

These findings include the following:

—Over several decades, domestic truck brands have developed large and loyal consumer bases, something the study suggested import brands haven't been able to do despite numerous marketing attempts.

—The best target for manufacturers and retail to market trucks to is the traditional pickup consumers, who often live in rural areas and are drawn to trucks for their utility functions. According to the study, domestic trucks account for 87 percent of the market share, and a majority of these customers are considered traditional pickup consumers.

—In addition to being more likely to show loyalty to a particular brand, Big 3 truck owners are also more likely (14 percent) to have several pickups of the same brand than are owners of import trucks (10 percent).

That being said, the owners of the Chevrolet Silverado were the only ones to help brand affinity climb in each of the past three years.

But, Big 3 brand pickup owners are also likely to own other vehicles from the same automaker, as well.

"For example, Acxiom found that since 2005, Ford F-150 owners have consistently remained ‘all Ford' with garage mates ranging from another F-150 to a Ford Explorer to a Ford Mustang," officials highlighted.

—The study suggested that domestic truck buyers share similar interests, while owners of Asian-brand trucks are "more disparate and don't exhibit traditional ‘truck-buyer' interests."

"It's undeniable that the pickup market is declining rapidly, but the real opportunity lies with traditional pickup buyers," explained Acxiom automotive executive Tim Longnecker.

"This study clearly illustrates that while today's pickup owners may delay their next pickup purchase due to a declining economy and rising gas prices, their higher loyalty to their truck's brand can be served with other vehicles in the brand if they leave the truck segment," he continued.

"And for the majority of those that stay within the pickup market, continuing to serve their needs with product innovation will be critically important," Longnecker added.

—Acxiom also further examined truck consumers' intentions for their next vehicle purchase. Almost half said they are considering buying a car next, representing a 13-point increase from January to April.

Meanwhile, 34 percent indicated they will buy another truck (up 6 points) and 17 percent are considering a crossover, an 11-point increase from January.

However, 18 percent of participants indicate they are looking to buy an SUV, an 11-point downturn, and only 3 percent are considering a minivan, a decrease of 4 percent.

"Over the past three years, we have found that consumer appeal for domestic trucks has remained high, while that for import trucks has not developed despite significant marketing efforts," Longnecker added.

"Because domestic manufacturers have established large numbers of brand loyalists, they are best positioned to serve these current customers within the brand — whether they exit the segment or not," he concluded.

For more information, visit www.acxiom.com.

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