Gas prices have been falling fast just in time for a peek into the future of the auto industry in the coming week.
On Monday, the North American International Auto Show begins in Detroit. It is the Super Bowl of cars, trucks and SUVs spread across hundreds of thousands of square feet of convention space. The show and tell comes at a good time to be an automaker, despite a record year of auto recalls last year.
Sales are near record highs as Americans replace aging cars with more fuel-efficient vehicles. It’s a positive economic sign when buyers are confident in their own finances to take on the responsibility and expense of a new vehicle. Those sales have a significant ripple effect across multiple industries such as manufacturing, financial services and transportation.
Electric cars, driverless vehicles and sleek concept automobiles grab a lot of attention as the industry imagines what is possible. However, the big business for American automakers, their suppliers and investors is in pickup trucks. The top three selling vehicles in 2014 were full size pickups, with more than 1.5 million new trucks combined. Pickups provide plenty of financial power for their makers. They traditionally come with fewer discounts and high profit margins.
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One out of every five GM vehicles sold last year was a Silverado pickup. Almost one out of every three Fords sold was an F-150 truck.
The pickup truck is hauling a big load.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.