Las Vegas Sun

September 20, 2019

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Falling gas prices drive truck resurgence at SEMA

VW SUV

Dan Henry, Chattanooga Times Free Press

The Volkswagen Atlas is unveiled during an employee meeting Tuesday in Chattanooga, Tenn. Trucks and SUVs make up a more than a quarter of the featured vehicles on display at SEMA in Las Vegas this week.

SEMA 2016

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They preen along the road adjacent to the Las Vegas Convention Center on this fall Tuesday afternoon like beauty pageant contestants posing on a stage.

Wrapped in metallic blue foil, topped with off-road tires, lifted 6 feet in the air, dropped within a snake’s breath of the asphalt, rims spiked for battle, tires broader than a defensive lineman’s shoulders — any way you can imagine customizing a pickup truck, you can find it outside the Specialty Equipment Market Association (SEMA) show.

More than a quarter of the featured vehicles entered for display at SEMA this year are trucks, a positive sign both for the automotive aftermarket equipment association and for the overall economy. Larger vehicles with higher fuel-consumption costs such as trucks and SUVs experienced sharp declines in sales during the recession as demand for fuel efficiency rose with gas prices approaching $4 per gallon.

While Nevada still lags about 30 cents above the national average at $2.52 per gallon according to AAA, the steep fall in gas prices from that peak of four years ago is energizing both the truck segment of the automotive industry and its aftermarket suppliers.

Buyers in the United States purchased 10.4 million light trucks and SUVs in 2009, down almost 7 million from nine years previous. In 2015, an estimated 17.5 million light trucks and SUVs were sold. Ford, GM and Chevrolet all report growth in truck sales over the first three quarters of 2016.

Combined with the popularity of the vehicles with the recovering construction industry and continued low interest rates, trucks represent one of the most promising segments for the auto industry.

“Just being at the SEMA show, you can see trucks have exploded,” said Josh DeLaune, a corporate sales representative with Bullet Liner, which sells bed liners for trucks. “People, with the economy being better, now have the money to spend on their trucks.”

The average Bullet Line customer seeks out protection for the bed of a pickup truck within 30 days of purchasing the vehicle and typically spends about $450, DeLaune says. The options grow from there — high-end choices like customizing colors to match the vehicle and even spraying the entire outside of it can run up to $5,000.

Nevadans find themselves with more money to purchase such extravagant luxuries both because of the state’s overall recovery from recession and the accompanying drop in gas prices.

A September briefing by Las Vegas-based Applied Analysis cited a federal survey that on average, an American household spent $2,090 on gas in 2015. That is down $666 from peak gas prices in 2012 and adds $694 million in discretionary income in Nevada, based on more than 1 million households.

Most of that cash does not remain in the house for long, though — a recent JPMorgan Chase study found that consumers quickly spend about 80 percent of money saved on lower gas prices.

“Because gas prices have gone down, trucks are more on the list and more attainable,” said Craig Taguchi with Toyota. “It’s ultimately become more attractive at the same time gas prices have gone down.”

Truck owners also tend to be more interested in customizing their vehicles, according to Peter MacGillivray with SEMA. New wheels, followed by a bed liner, are the most common first purchase. After those two functional upgrades, cosmetic upgrades begin, sometimes running as much as the original cost of the truck itself.

“You can go from mild to wild at that point,” MacGillivray said.

While trucks and SUVs still trail most other vehicles in terms of fuel efficiency, the recession demanded the industry adjust both to consumer demand for gas savings, as well as vehicles that can serve a family’s needs when they cannot afford more than one car.

“You’ve got to build trucks that can serve multiple purposes,” Taguchi said.

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