Customer Transaction Data Confirms Lower Gas Prices Equate to Greater Truck Loyalty
By Jeff Youngs, October 31, 2014
As October 2014 draws to a close, and as gas prices have fallen to their lowest point in nearly half a decade, data gathered by the Power Information Network(R) (PIN) from J.D. Power shows that owners of large pickup trucks are less likely to trade their trucks in for a more fuel-efficient vehicle when gas prices are lower.
The company bases this finding upon an analysis of gas prices and trade-in activity at various points in 2013. According to PIN, the price of regular unleaded averaged $3.71 per gallon in March 2013, and 31.8% of large pickup owners traded their trucks for a more fuel-efficient vehicle. By December 2013, the price of gas had dropped to $3.26 per gallon, and 26.2% of large pickup owners traded their trucks for a more fuel-efficient vehicle.
Thomas King, vice president of PIN, notes that in many parts of the United States, gas prices have dropped to below $3 per gallon. "As large pickup owners experience these low fuel prices each time they fill their tank, fewer of them are defecting from the segment."
According to the analysis, when large pickup owners choose a different type of vehicle, they most frequently select a compact SUV, midsize SUV, or a midsize car. King recognizes, however, that lower fuel prices represent one of many factors determining consumer behavior, citing incentives and product availability as additional influences on defection patterns.
Since the PIN analysis of 2013 calendar-year data was performed, General Motors has completed a rollout of its redesigned range of more fuel-efficient Chevrolet and GMC large pickups, and has begun offering rebates and other incentives for the Silverado and Sierra models. Additionally, Fiat Chrysler Automobiles has increased the installation rate of its 3.0-liter, turbo-diesel V-6 engine in the light-duty Ram 1500 model to a reported 20% of total production. This fall, a lighter and more fuel-efficient redesigned Ford F-150 arrives in showrooms. Assuming gas prices remain about the same or even continue to fall, and as more of the new wave of fuel-efficient large pickups continue to saturate the market, it is likely that an even lower percentage of large truck owners will trade their vehicles for a more fuel-efficient model.