Voracious van sales give Ford, GM silver lining
Woody Buick GMC owner Woody Woodring discusses car buying trends with FOX Business' Grady Trimble.
Turns out, U.S. commercial vans are a hot commodity these days.
The retail apocalypse, which has accelerated bankruptcies and store closings, as more people shop online is turning out to be a boon for van sales at America’s biggest automakers.
“You're seeing a real transition away from brick and mortar to online selling, you know not just from Amazon but even Wal-Mart is making a big push in that area too,” Ford U.S. sales analyst Erich Merkle told FOX Business. “So when you have more activity happening online there's more packages being shipped and more vans needed to ship them with.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 10.80 | +0.07 | +0.65% |
| AMZN | AMAZON.COM INC. | 198.38 | -4.50 | -2.22% |
| WMT | WALMART INC. | 88.39 | +1.21 | +1.39% |
| GM | GENERAL MOTORS CO. | 55.68 | +0.81 | +1.48% |
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Ford on Wednesday said van sales surged 21 percent in the third quarter to a record 65,288, on the back of strength from its Transit (+25 percent) and Transit Connect (+49 percent) models. Rival General Motors also saw a notable increase as Express sales jumped 26 percent versus a year ago and Savana sales rose 4.3 percent. General Motors did not respond to FOX Business’ request for comment on what's driving the segment.
Strong van sales continued amid the shift in the consumer's preference for online shopping as opposed to going to the mall. E-commerce sales in the U.S. rose 13 percent year-over-year in the second quarter, according to an August release from the U.S. Census Bureau. Third-quarter data is not yet available.
And while e-commerce provided a big boost, the strong U.S. economy was also a factor.
“When people are working and there's hammers being swung out there in the marketplace people are using these things," Merkle added.
If there’s anything that could slow sales down, it’s the shift in preference towards electric vehicles.
UPS last year said it was buying 1,000 electric vehicles from Workhorse and that it would convert 1,500 more delivery trucks in New York City to battery-electric.
And last month, the e-commerce giant Amazon announced plans to purchase 100,000 electric vehicles from Rivian Automotive, with the hopes of becoming carbon neutral by 2030. Amazon's David Clark tweeted about the announcement. Ford has also invested millions of dollars in Rivian.
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“As we continue in our transformation of Ford with new forms of intelligent vehicles and propulsion, this partnership with Rivian brings a fresh approach to both,” Ford CEO Jim Hackett said in a statement out alongside Ford's investment in April.