Light truck sales remain in strong demand at region's dealerships

Northern Nevada has long been truck country, and the region remains in the forefront of stronger truck sales nationally.

New-vehicle dealerships in the region say sales of pickup trucks are on the rise or continue to be their top-selling vehicles.

Nowhere is that more true than in Elko, where mining companies and mining service providers have keep fleet sales brisk, as have well-paid mine site workers who enjoy the comforts of a 4-by-4 truck. Mike Gallagher, owner of Gallagher Ford Lincoln Mercury, says fleet and retail sales in 2011 rose nearly 20 percent from the prior year.

The Ford F-150 is the hottest-selling truck in Elko, followed by heavier-duty pickups such as the Ford F-250 and F-350. Sales of the F-150 light-duty pickup in 2011 rose almost 30 percent from 2010, Gallagher says.

"The market is great," says Gallagher, who predicts another 10-percent rise in sales for 2012. "There is some new product that came out, the eco-boost engine, and that is a really hot seller in the F-150."

The trend extends across the nation. Ford Motor Company says in 2011 it sold two trucks for every car. The F-150 line is the top-selling truck in the U.S., followed by the Chevrolet Silverado.

New car sales were sluggish in 2009 in the depths of the recession, but Gallagher says that due to the strong mining economy in Elko County he's hired new sales staff in each of the past three years. Mining, drilling and mining support companies provide a steady stream of truck business for Gallagher Ford.

"In 2009 we were a little soft, but not anything compared to what it was nationally," Gallagher says. "We did not have any layoffs, and we had plenty of business to keep everyone busy."

Truck sales in Reno and Carson City also have rebounded, despite high gas prices and a generally weak job market for construction workers, who create one of the largest markets for light- and heavy-duty pickups.

Russ Martinez, sales manager at Jones West Ford in Reno, says the longtime Reno dealership can't stock enough trucks. Four-by-fours in general, Martinez says, don't sit on the lot very long.

"I have got maybe 27 trucks in stock, and I should have 100," Martinez says. "Whatever we can get our hands on that is four-wheel drive are the best sellers in Reno."

Sales at Jones West Ford have slowed significantly from the peak in 2006, when the dealership was moving 200 vehicles per month.

Jones West Ford today averages about 100 vehicle sales per month, Martinez says, and trucks and sport utility vehicles accounting for 60 percent or more of buyer purchases.

In Carson City, sales of Ram pickups has rebounded more than 25 percent from 2009, says Stephen Christian, general manager of Carson City Dodge Chrysler Jeep.

The half-ton Ram 1500-series light-duty pickup with a quad or crew cab is the dealership's top-selling truck, followed by the heavier-duty 2500- and 3500-series trucks that are preferred by construction workers.

"Contrary to what you would believe because gas prices still are pretty high, you would think the truck market would be going down, but we are seeing an increase in the truck market," Christian says. "A truck or larger SUV will do something a car won't you can haul with it, and that is more important or perhaps mandatory for some customers, so they are buying them."

Ziggy Terelak, longtime fleet sales manager at Champion Chevrolet, says that 2011 fleet sales increased by just a few dozen vehicles from the prior year because few companies associated with the construction trades are buying new vehicles. Sales are expected to remain soft, Terelak says, since many construction and service companies in Reno have spare vehicles sitting in their yards and are waiting for business to pick up to put those additional vehicles in use.

The hottest-selling trucks at Champion Chevrolet are the half-ton from General Motors and the three-quarter ton Duramax diesel, Terelak says. The truck is a good fit for families, contractors, and "for people like myself who are grandparents and need a backseat," Terelak says.

Michael Lee of Lee Bros. Sales and Leasing on Keitzke Lane, says GMC pickups are the dealership's top seller, followed by Ford and Dodge.

Even though northern Nevada has long been a strong truck market, Lee says sales of pickups have grown over the past few years. In just the past three months, Lee Bros. has moved close to 60 new vehicles.

New purchases oftentimes are based on the condition of older vehicles, Lee says. Many buyers are facing steep repair bills and choose instead to sell or trade in their vehicles for a new vehicle that is under warranty.

"In today's economy, people have to buy something that is universal in use," Lee says. "Trucks today are nice as cars. Pickups have made a massive transformation to being extremely comfortable. A Cadillac of yesterday doesn't ride as smooth as half the trucks out there today."

Many dealers prefer to sell trucks over cars because there is a higher profit margin on pickups. However, Christian of Carson City Dodge says the truck market is so competitive that dealers reduce profit margins in order to make a sale and gain a larger customer base.

"We are giving away 99 percent of the profit in these vehicles," he says. "We are looking at residual business down the road perhaps that customer will need a tune up or oil change. The margin doesn't make a lot of difference; it is in the numbers, in trade-ins, in residual service, and the opportunity to have a lifelong customer."