An idled GM assembly plant in Flint, Mich., in March. Auto makers plan to prioritize the manufacture of pickup trucks when production resumes.
Photo: Anthony Lanzilote/Bloomberg NewsThe coronavirus outbreak has cut deeply into U.S. auto sales, but for Detroit in particular one corner of the market has held up relatively well: pickup trucks.
With auto makers offering aggressive finance deals and trucks often needed for work, sales of pickups haven’t dropped as precipitously as other types of vehicles and are expected to bounce back faster as the market recovers, industry executives and analysts say. Another factor, they say, is that big truck-buying states, like Texas and Florida, have had less-restrictive lockdowns during the Covid-19 crisis.
“We’re very fortunate to be in Texas,” said Sam Pack, owner of the Pack Auto Group of dealerships in the Dallas area. He said sales promotions and cheap financing have also helped to spur truck sales, salvaging what he had expected would be a catastrophic period for business.
New-vehicle sales overall tumbled nearly 50% from a year earlier in April, making the month one of the industry’s worst in decades. In contrast, truck sales dropped 21%, with their share of the U.S. auto market registering at 26%, up from 18% a year earlier, according to market-research firm Motor Intelligence.
The segment’s resiliency has been a salve for the three Detroit auto makers, which generate the bulk of their profits in North America from selling trucks.
At General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV, truck sales accounted for more than 40% of their U.S. business in April, reaching their highest share of sales at each auto maker since at least 1990, according to Motor Intelligence.
On earnings calls this week, company executives took solace in pickup sales when reviewing quarterly results bruised by factory shutdowns and other effects of the pandemic.
“Those types of vehicles are the ones that are much more resilient to a downturn,” Fiat Chrysler chief Mike Manleytold investors on a conference call Tuesday. He said many truck purchases aren’t regarded as discretionary because buyers use them for work.
Toyota Motor Corp., a leading seller of sedans, has focused on selling more trucks in recent years, and last month pickups accounted for about a quarter of its U.S. sales, marking a new high for the Japanese car maker.
Well before the pandemic, customers were shifting away from sedans to larger, more-versatile trucks and SUVs, especially given low gasoline prices. However, SUV sales in April dropped more than 45%, in line with the overall market, industry sales figures show. Auto makers posted deep declines on the East and West coasts, regions hit hard by coronavirus and traditionally not as strong in truck sales.
Volkswagen AG , which like some other foreign brands sells no pickups in the U.S., said it benefited less than Detroit auto makers from the higher level of business activity in America’s heartland.
“The main distribution of pickup trucks in the U.S. is not on the coastal lines but [rather] it’s the big country in between where states stayed open,” said Jürgen Stackmann, Volkswagen’s board member in charge of sales.
Increased incentives were available to truck buyers. Many manufacturers are now offering zero-percent financing on longer-term loans, along with cash discounts and deferred payment incentives—all of which help make pricey trucks more affordable, analysts and dealers say.
Cheap financing convinced Jacob Saylor that it was time to pull the trigger on a new truck to replace the Saturn sedan he’d been driving since college.
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The 33-year-old software programmer, who has been sheltering in place and not spending as much, said a new Ford F-150 pickup caught his eye.
“I got a better deal now than I would have a couple of months ago,” he said, noting the discounts shaved several thousand dollars off the nearly $50,000 sticker price of the truck he chose.
With most auto factories in the U.S. still shut down, truck inventories are starting to run low, company executives say. At the end of April, about 650,000 pickup trucks sat on dealership lots, down 30% from a year earlier, according to data from Wards Intelligence. Mr. Manley said he can’t recall Fiat Chrysler’s inventory levels for all models being so low and that its most popular trucks may be harder to find.
Fiat Chrysler, GM and Ford plan to reopen their U.S. factories on May 18, and executives say they will prioritize high-margin trucks as they reboot manufacturing operations. Still, dealers say they worry about a shortage slowing the truck-buying momentum.
“They need to have a selection available and that’s where the problem is going to come,” said Bill Walsh, owner of the Bill Walsh Automotive Group of dealerships around Ottawa, Ill. He normally stocks up on trucks heading into summer to support his agricultural customers. “When the farmers are ready to go in the field, their main goal isn’t to spend some time shopping,” Mr. Walsh said.
—Mike Colias contributed to this article.
Write to Ben Foldy at Ben.Foldy@wsj.com
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