Americans continue to favor light trucks over cars

June 20, 2017
Bernie DeGroat

ANN ARBOR—Americans love their pickup trucks, SUVs and minivans—as long as they believe they can afford them, a new University of Michigan study confirms.

Michael Sivak and Brandon Schoettle of the U-M Transportation Research Institute examined the relationship between relative sales of cars (passenger cars and stations wagons) and light trucks (pickup trucks, SUVs, vans) up to 14,000 pounds gross vehicle weight and three economic factors: disposable income, price of gasoline and unemployment rate.

Perhaps not surprisingly, they found that from January 2007 to December 2016, each of these economic factors was a significant predictor of the percentage of car sales out of the combined total of car and light-truck sales.

“All of the effects were in the expected directions: higher disposable income was associated with lower percentages of car sales, while both higher gas prices and higher unemployment rates were associated with higher percentages of car sales,” said Sivak, a research professor at UMTRI.

Sivak and Schoettle also calculated percentages of car sales for 36 possible future scenarios based on different levels of disposable income per capita ($35,000, $40,000 and $45,000), prices of gas per gallon ($2, $3 and $4) and unemployment rates (3, 5, 7 and 9 percent). These predictions were derived by using the best-fitting regression model for the 2007 through 2016 data.

Sivak said that, overall, car sales exceeding 50 percent of all sales could be expected for only six of the 36 scenarios, when the lowest disposable income is combined with the highest gas price (regardless of the unemployment rate) and when the lowest disposable income, the median gas price and highest unemployment rates are combined.


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