Auto companies are betting on a surge in pickup sales now that home building is on the rise.
Chrysler said Thursday that it is adding 1,000 workers to its Ram pickup factory because it sees higher demand for the redesigned truck. Ford and General Motors also say truck sales are climbing fast after several years of small but steady growth.
Truck sales rise or fall with home construction, since they're the vehicle of choice for contractors and construction crews. And there are growing signs that home construction and prices are in the midst of a steady recovery, said Tom Libby, lead North American forecasting analyst for the Polk research firm.
For example, government data show builders started construction on homes and apartments at the fastest pace in more than four years in September. They also requested the most building permits in four years, a sign that many are confident that home sales will continue growing. Another encouraging sign: Home prices are rising in many markets.
"Almost every day there's another report of a positive measure," Libby said.
Another reason sales could surge is the record age of trucks currently on the road.
Ford Americas President Mark Fields said this week that 53 percent percent of full-size pickups are older than 10 years and 27 percent are more than 15 years old. Many of those will have to be replaced soon.
"You can see there's a lot of pent-up demand out there," Fields said at an industry conference. "There could be a lot of opportunity."
Fields said full-size trucks have accounted for 11 percent of U.S. sales since 2009. That market share shot up rapidly in October to 13 percent, according to Citi analyst Itay Michaeli.
He expects demand at that level for the next few months, especially since gas prices have eased.
Most Popular Stories
- Swiss Suicide Tourism Doubled Since 2009
- Florida's Largest Insurer Says 'Bailout' Attacks Unfair
- Wealth Gap Widened in Past Decade: Census
- Gap Reports Higher Profits, India Plans
- Sears Holdings Loses $573 Million
- International Revulsion Grows Over James Foley Death
- Criminal Investigation Opened Into James Foley's Death
- Beyonce, Jay-Z Cuba Trip Was Legal After All
- U.S. Veteran Killed Fighting in Ukraine
- Chinese Stock Funds Are a Late-summer Bloomer