Ever wondered why the allure of an affordable new truck seems more like a mirage these days? Despite the lot inventories of best-sellers skyrocketing far beyond the norms of a healthy market, securing an affordably priced new truck has become tougher than ever.
So, what’s behind this paradox? The answer lies in the automakers’ strategic drift from the production of affordable base models. But, is this strategy set to steer the truck industry into troubled waters? Let’s uncover the truth using CarEdge and MarketCheck’s latest data on the state of the truck market in 2023.
Disappearing Base Models Send Prices Climbing
There’s an interesting trend that the top-selling trucks in America all share: as the total production figures rebounded from pandemic lows, the production of affordable base models hasn’t kept pace. The strategic move by automakers to limit the production of entry-level models has created scarcity, contributing to their increased prices.
Ram 1500: An Extreme Example
Focusing on one of the best-selling trucks in America, the Ram 1500, CarEdge Data reveals that there are 53,652 new Ram 1500s on sale across the nation. However, the most affordable trim option, the Ram 1500 Tradesman, only makes up a mere 3,445 of this total. Despite having a starting price of just $37,090, the Tradesman, as a result, seems like a near-mythical entity in dealer lots.
The scarcity of base model Ram 1500s isn’t the only issue; the prices of these scarce models have surged as the supply diminished. The Ram 1500 Classic witnessed a 26% price hike from 2019 to 2023, while its inventory dropped by a whopping 88%.
The Silverado 1500 Work Truck experienced a 41% price increase since 2019, even though its inventory has decreased by 33% over the same period. Today, the base model Work Truck represents a meager 6% of the 67,795 brand-new Silverados available on the market.
Gauging the Impact
Despite the combined U.S. sales of America’s three top-selling trucks rising by 2.5% from the pre-pandemic norms of Q1 2020, the inventory of base models like the F-150 XL sits at just 54% of the pre-pandemic levels.
Here’s a look at how overall truck sales (across all trims) has risen back from pandemic lows, despite leaving affordable base trims behind:
Similarly, the Silverado Work Truck is at a mere 49% of early 2020’s inventory. The worst hit is the Ram 1500 Classic, languishing at 23% of January 2020’s inventory, notwithstanding the overall Ram 1500 sales recovering to 91% of the pre-pandemic levels.
The picture is clear: truck inventories have fully recovered from the inventory woes of 2021, but affordable base models were largely left out of the picture. The result: truck buyers are pushed towards more expensive truck options, feeding into the ultimate goal of the automakers – ever higher profits.
The Wider Impact Beyond Trucks
From skyrocketing destination charges to the elimination of popular base models, it’s apparent that automakers are leaving no stone unturned in their bid to maximize profits from each sale. However, this aggressive strategy has not been left unchecked. Consumers are pushing back, sparking significant changes in the industry. A classic example is Honda, which, within a year of canceling the base LX trim for the CR-V and Civic, reversed their decision due to consumer pressure. Kia, too, had to reintroduce its most affordable EV6 after initially discontinuing it.
The real question now is, will truck lovers follow suit and make their voices heard? And more importantly, will the major automakers – Ford, GM, and Stellantis – heed the call, or continue their current strategy, potentially alienating millions of middle-class loyal customers?
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