Truck and Off-Road Market Trends
Small Trucks Log Sales Gains, Larger Pickups Lag; Classic Trucks Surge in Popularity;
Consumer trends and preferences may change over time, but in the automotive sphere, pickups never really fall out of fashion. They're the ideal multipurpose vehicles that function equally as daily commuters, job-site workhorses or recreational trail toys. For sheer versatility, nothing compares to them, and that's probably why the bestselling vehicle in the United States for more than 40 years in a row has been a pickup.
››› Overlanding continues to be a bright spot for the off-road/backcountry lifestyle market, with the number of vehicles serving as build platforms running the gamut from Jeeps and Toyotas to HD diesel pickups and Mercedes Sprinter vans. Courtesy Winnebago
More than half of all vehicles on the road in the United States are either a pickup, an SUV or a crossover CUV. According to the most recent issue of "SEMA Future Trends," the light-truck segment—which includes pickups, vans, SUVs and CUVs—is forecast to account for close to 80% of all new-vehicle sales by 2027, with pickups alone making up nearly 50% of all new vehicles sold.
Healthy truck and SUV sales generally augur well for the automotive aftermarket. Parts and accessories for pickups alone account for 31% of specialty equipment sales, according to the latest "SEMA Pickup Accessorization Report," with $16 billion in annual sales. Throw in SUVs, crossovers and vans, and that sales number grows to more than $30 billion yearly. More than half of all late-model pickups on the road have been modified with specialty-equipment parts, with HD models more likely to receive upgrades, and more than a quarter of pickup drivers purchase aftermarket equipment for their trucks each year.
While consumer demand for late-model truck parts remains high, new-truck sales—like new-car sales overall—faced tough sledding in 2022. The combination of persistent semiconductor shortages, COVID-related supply disruptions, spikes in fuel prices for much of the year, and low inventory on dealer lots combined to make new trucks more difficult to obtain and more expensive to operate. While eight of the top-selling vehicles sold in the United States were either pickups or SUVs, nearly all posted sales declines in 2022 over the previous year. Ford's F-150 was again the nation's best-selling vehicle but reported sales of 653,000 units, which marked a 10% decline over 2021. Among the top 10, the RAM 1500, Toyota Highlander and Jeep Grand Cherokee all posted double-digit declines, with the Tesla Model Y compact SUV the only top 10 vehicle to log a year-over-year (YOY) sales increase with an impressive 40% YOY gain.
There were still some bright spots. The Ford Bronco, in its first full calendar year on the market, reported 117,000 units sold, a 233% increase over 2021. Similarly, the Ford Maverick compact pickup, also in its first year on the market, logged a whopping 687% sales increase from 2021. Additionally, the midsize Chevrolet Colorado logged a 22% sales increase, and the Jeep Compass compact SUV reported a 14% gain for 2022. Noticing a trend here?
While CUVs continue to gain overall market share in the sector, smaller trucks and compact SUVs are seeing a resurgence in popularity, perhaps reflecting higher fuel costs. Midsize trucks accounted for only 15% of U.S. pickup sales in 2015 but have gained ground since then and are forecast to comprise 30% of U.S. pickup sales by 2025.
But in any event, consumer demand for trucks remains high, and if consumers can't find them new, they'll buy them used. According to a January 2023 survey of three-year-old used cars conducted by iSeeCars, eight of the top 10 most used vehicles purchased last year were either a truck, an SUV or a crossover, with F-150, Silverado 1500 and RAM 1500 leading the pack. Depreciation rates plummeted by more than half from 2020 to 2022, according to a report from Wards Auto, suggesting future high resale values for many models.
For this article, we consulted several industry leaders for their perspectives on the overall state of the marketplace. What follows is a summation of their views.
››› The Jeep Recon EV aims to compete against the Ford Bronco Sport in the compact off-road segment. Courtesy Jeep/Stellantis
The State of the Market
Overall, the members of our industry panel were generally upbeat about the current condition of the marketplace, with some notable caveats. Specifically, the microchip shortage that has repeatedly sidelined production at OE assembly plants in recent years has exerted a ripple effect on the specialty-equipment market.
"Right now, it's very difficult trying to get vehicles," said Karl Harr, director of sales and marketing for Liquid Spring. "That's probably been the biggest issue that we've had—just getting the truck or chassis to build on. Clients have been waiting up to a year for a vehicle."
"We're seeing low inventory at dealerships," said Rachel Deere, outside sales—light-truck products for Merritt Products, "so it's a little bit slower just trying to get some of our accessories to our dealers."
"We also had an issue getting new vehicles," said Mike Hallmark, marketing and international sales manager for Hellwig Products, "but with production picking back up, we're seeing more brand-new '23s on the lots."
While the limited supply of the late-model trucks continues to pose difficulties, the old-school classic-truck market, by contrast, has seen a surge in popularity in recent years.
"It's booming," said Jay McFarland, director of business development for Holley, who also noted that the number of build platforms in the 'classic-truck' segment continues to expand. "The '67–'72 Chevrolet/GMC trucks have always been really popular, but it seems like there's a shift going on to the square-body '73–'87 trucks, and now, even the '88–'98s. I've seen the values of those trucks just skyrocket lately."
D. Brian Smith, marketing copywriter for Classic Industries, concurred. "I don't know that we've seen the boom as big for classic trucks for so long. We've been supporting the '73–'87 trucks for at least 10 years now, and similarly for the '88–'98 trucks, so we were already had our foot in that market before interest grew. But we've definitely seen a major uptick in interest and sales."
At the grassroots shop level, what are enthusiasts building?
"The '90s vibe is coming back," said Theresa Contreras, president of LGE-CTS Motorsports at a recent SEMA Education seminar. "We're seeing a lot of the '90s Chevy trucks, and all the phone calls I've been getting lately from customers are saying 'I want to bag and body-drop my truck'."
"It's come full circle to the point that vehicles that were in the early '90s are on their third owner now, and the ones that weren't modified are now coming back," added Sean Holman, co-host of "The Truck Show" podcast. For veteran builders, "If you wait long enough and things become popular again, you might be the only person who can service the vehicle if you've done that in the past."
According to Matt Dinelli, owner of Attitude Performance, modern-day truck builds seem to fall into one of two categories: mild or massive. "What we're seeing at our shop right now," he says, "is either a basic lift and 35-in. tires, no matter what the platform is, or an absolutely over-the-top, astronomical, down-to-the-frame, motor swap, 1-ton axles and coilovers. Our jobs are either small lift kits and leveling kits, or stuff that's at the shop for six months. There's not really a middle ground anymore."
As the segment expands and more newbies enter the accessorization space, hands-on education at the shop and retail level becomes an important part of customer outreach. "One of our biggest sales tactics is to educate people about the product that they want to purchase and let them make the choice on which brand they end up going with," said Contreras. "Whenever something leaves our shop, one of our salespeople will go over the vehicle and show the owner how to disconnect the sway bars or how to engage four-wheel drive. There are a lot of people who just don't know."
All of our sources stressed the importance of maintaining a robust multi-platform digital media presence, with Instagram and YouTube most commonly cited as generating the most user engagement. "Right now, it's people going on social and just trying to find a very specific thing for their truck," said Stewart Webb, vice president of marketing at PRYNT Digital. "If you can post whatever you're building and do it consistently, you're able to speak to a broader audience and able to bring in more customers as well."
Targeted search is another viable outreach tool for manufacturers looking to connect with a niche buyer demographic. "We do quite a bit of Google search," said Cort Charles, western regional sales manager for Auto Meter. "When we're trying to push specific product lines, we have a lot of targeted ads that are in place. Because some of our newer products are platform-specific and vehicle-specific, it allows us to hone in on a specific group."
››› The retro-styled Volkswagen ID. Buzz offers an intriguing potential overland build platform with a particular appeal to younger Millennial and Gen Z buyers.Courtesy Volkswagen AG
Overlanding: Still Trending Upward
Nearly all of our experts agreed that the future of overlanding—which has gone from a fringe marketplace to a major industry player in slightly more than a decade—continues to look bright.
"That's where we have seen a lot of growth," said Harr. "We do a lot of what we call the 'habitat builds' on the Ford F-550 and RAM 5500, and now it's pushed us into the smaller truck market in the overland space. Right now, we're also looking at developing product for Mercedes Sprinters and the Ford Transit."
"I don't think we've hit the plateau yet," said Steven Shearer, senior marketing manager, communications for Toyo Tire. "There are still manufacturers in the aftermarket space creating product to support that market, and the OE manufacturers are still creating vehicles that are specific to that segment."
While overlanders, in the aggregate, tend to be older and more affluent than other automotive consumer bases, several of our experts saw growth opportunity among a younger demographic.
"For the foreseeable future, there will still be upward growth, especially among the younger generation that's big on traveling outdoors," said Hannah DeWeese, brand leader for Terra Rover. "Some of these people are adopting it as a new hobby, so it will just keep going as the years go by.
"Our primary target market is Gen X and Millennials," DeWeese continued. "People who have established incomes that allow them to invest in a nicer trailer for longer trips. They might also have kids, so they're looking for something bigger. That's who we're targeting."
Some of our experts pointed toward all-wheel-drive crossovers as a future growth segment, particularly to younger "weekend warrior" enthusiasts with limited build budgets.
"RAV4 adventurers seem to be the newest entry," Holman noted. "I've seen so many of those things out in places they shouldn't be." Contreras similarly mentioned Kia SUVs such as the Telluride as a source of potential new aftermarket sales. "We get a ton of customer calls because we do stuff with Kia," she says.
Companies that previously hadn't catered to the overlanding market have taken notice of the segment's resiliency and are adjusting their business models accordingly.
"We started in the heavy-duty commercial world," said Rachel Deere. "We've been in the accessories world for years and years, with heavy-duty products, but a lot of our products—ladder racks, headache racks and side boxes—are applicable to overlanding, so in the next year or so, we're going to be launching new products for that market."
"Bed accessories are huge right now," Holman agreed, "and cargo systems such as racks, slides, and things to support rooftop tents and light bars."
"We're seeing a slowdown on the side of rooftop tent sales," Contreras observes, "but the rack systems and multipurpose cargo stuff that make your vehicle more versatile for everything that you do is becoming way more popular, especially for people who want to use the truck for work."
DeWeese sees additional growth opportunities among the traditional "outdoor lifestyle" sector of recreationalists.
"Another market that hasn't been mentioned, which we would look to capitalize on, would be the hunting or outdoor sector—people who aren't just traveling for leisure, but who are going to do something specific. They need storage, and they may need a trailer to be able to get there."
››› Long anticipated, the Chevrolet Silverado EV enters the market with a claimed range of 400 mi. and a tow capacity of up to 20,000 lbs., depending on trim level. Courtesy Chevrolet
The Outlook Ahead
Several of our experts expressed concerns about fuel prices and rising interest rates as continued hindrances to growth.
"Inflation is going to be one of the biggest things," said Deere, "so we're probably looking at a little less [consumer] spending."
The trend toward electrification was cited by several experts as both a potential short-term challenge and a promising long-term opportunity.
"We are broadening our offerings and going into EV platforms," said Hallmark. "We just released a sway bar for the Tesla Model 3 and Model Y, and we're looking at the Rivian and any other electric platforms that are there. We're releasing a front swaybar for the F-150 Lightning as well, so we're trying to stay ahead of the curve for the adaptations and changes that are coming to the market with EVs."
On the other hand, electric drivetrains raise compatibility issues for certain specialty-equipment manufacturers, as Auto Meter's Charles explains: "When you talk about our instrumentation, unless there's some additional data that their computer is not going to provide, it's going to be tough for us to find a way to get in there and be a part of it."
Still, the consensus among our experts was that ICE engines would continue to be the powertrain of choice for the vast majority of truck and SUV owners for the foreseeable future.
"You can't run the Baja 1000 on an electric vehicle," said Ben Anderson, product development manager for Mickey Thompson Tires & Wheels. "Gas vehicles are going to be around for quite a while—in the United States, anyway."
"As far as the growth of the industry goes, people are still going to want their accessories," Deere said. "People really do like that and they like their vehicles, so they're always looking at the opportunity to upgrade."