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Why trucks are outselling cars in California

Via The San Diego Union-Tribune

California usually sets the tone for national trends but the latest numbers for vehicle sales show car and truck buyers in the Golden State are becoming a bit more like the rest of the country.

For the first time in recent memory, vehicles under the heading “light truck” outperformed car sales, according to the latest quarterly report from the California New Car Dealers Association.

Slightly more than 50 percent of the market share in the first six months of 2017 was made up of light trucks — a category that includes pickup trucks and SUVs — which have become more popular as the price of gasoline has stayed relatively low for going on two years now.

Registrations for light trucks came to 514,255 through June in California while cars accounted for 512,627. That marked an increase in market share of 8.8 percent for light trucks and a decrease of 10.8 percent for cars.

The numbers in San Diego County followed suit. A bit more than 5,000 light trucks were sold in the county through June than cars. Light truck sales were up 10.3 percent in San Diego while sales for cars were down 13 percent.

The sight of light trucks outselling cars may be new for California but it has been a trend nationally, as consumers have flocked to SUVs and light trucks that are increasingly more fuel-efficient, allow drivers to sit higher and contain all the high-tech accoutrements seen in passenger cars.

The numbers don’t surprise Paul Dyke, general manager at El Cajon Ford, where sales for pickup trucks have remained consistently strong for years.

“A new truck these days is something you wouldn’t be embarrassed to drive up to the Ritz Carlton,” Dyke said.

However, the national market share of light truck sales is considerably higher than in California — 63 percent — and the Ford F Series is the country’s most popular vehicle.

For the first six months of this year, the F Series cracked the top five in California registrations, with nearly 28,000 registrations. The Toyota RAV4, an SUV, finished sixth.

The top-selling vehicle remained the Honda Civic, with 44,174 registrations in the state.

“California is becoming a bit more like the rest of the nation but it still is very independent, with its own sort of automotive pulse,” said Jeremy Acevedo, pricing and industry analyst for Edmunds.com.

Overall, the California auto market is cooling down after completing a run of 23 consecutive quarters of growth that came to an end in the third quarter of last year.

A slow but steady recovery after the economic downturn after 2008 unleashed pent-up demand from buyers who traded in older vehicles.

While the numbers are slowing, the second-quarter statistics indicate vehicle sales are on track to exceed 2 million for 2017.

“As the economy is flattening out after recovering from the Great Recession, our industry is doing the same but California continues to outperform the rest of the country,” said California New Car Dealers Association chair Cheryl Bedford of Sunset Auto Center in Lompoc.

Tuesday’s report included some good news for cars that qualify under the state’s zero emissions vehicle (ZEV) category.

While still very small compared to internal combustion vehicles, the market share for plug-in hybrids increased from 1.7 percent in 2016 to 2.1 percent for the first six months of 2017, and registrations for electric vehicles went up from 1.9 to 2.5 percent.

“If they can keep moving the needle forward in small but significant ways it opens up some fertile ground for the technology,” said Acevedo.

The all-electric Chevrolet Bolt just entered the national market, boasting a range of more than 200 miles per charge and a list price of about $30,000 without government tax credits or rebates.

Tesla unveiled its Model 3 last month, which has a base price of $35,000 and Elon Musk says about a half million customers have placed $1,000 reservations to buy the car.




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