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Increase in Farming Income Boosts Sales for Pickup Trucks in the U.S.

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On: Tue, Oct 26, 2010 at 9:05AM | By: Sherry Christiansen

Increase in Farming Income Boosts Sales for Pickup Trucks in the U.S.

According to a New Jersey-based auto researcher named Autodata Corporation, U.S. pickup truck sales have risen by 14% to 1.2 million in the first 9 months of the year. The growth in truck sales has been attributed to a recent boost from the farming industry. “Agriculture is helping out,” says Mark Fields, Ford Motor Co.'s president of North America. “When farmers have a good harvest, they invest in their businesses and a pickup is a tool,” said fields.

Flooding around the world, in places such as Russia and Canada, has destroyed many crops, which resulted in a rise in U.S. agriculture exports from $61 billion to $68.8 billion in the first 8 months (equating to a 24% increase in farm income) of 2010; this according to the U.S. Department of Agriculture. “It makes intuitive sense that if the agricultural industry is rebounding that pickups would come along for the ride,” said Joe Barker, an industry analyst with IHS Automotive.

Last year, automakers posted the lowest numbers for light vehicle sales since 1982.

“The agriculture business, the farmers and the ranchers, they seem to have weathered this storm pretty well,” said Fred Diaz, Chrysler Group LLC's head sales executive and chief executive of the Ram truck brand. “Texas, of course, is the truck capital of the universe.”

Ford Motor Company reported that sales of the F-Series pickups (the number one selling pickup truck in the U.S.) rose by as much as 31% to 386,000, and GM stated that Silverado sales increased by 17% to 267,000. The GMC Sierra pickup saw a sales increase of 14% to 90,000. Fleet sales accounted for a large proportion of increased pickup sales over the past year, as did the farming and ranching industry.

Even Japanese automakers saw a significant sales increase this year. Toyota Motor Corp.'s Tundra sales rose 21 percent to 69,000 and Nissan Motor Co.'s Titan deliveries increased 27 percent to 17,500.

According to an automotive industry analyst, most automakers end up seeing bigger profits from truck sales than from cars or other vehicles. “Any sort of incremental demand for full-size pickups can be described as a bright spot,” said Barker, who is based in Northville, Mich. “These vehicles are very profitable; it's the bread-and-butter product for primarily the Detroit auto companies.”

Ivan Drury told Bloomberg News in a recent statement, “The large truck market is rebounding from last year's low, but we may not ever see large truck market share return to its 15-plus percent high in 2005.”

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