Hasta La Ideas

The U.S. is presently one of the world’s largest manufacturers, and consumers, of automobiles. What percentage of Detroit’s profits, would you guess, comes from trucks as opposed to passenger cars? The Big Three aren’t saying, but according to a Reuters analysis looking at the EBIT—that’s Earnings Before Interest & Taxes—an astonishing 71%* comes from trucks and SUVs.

“There is no doubt that full-size trucks are still the single largest component” of pre-tax profits at General Motors Co, Ford Motor Co and Chrysler Group LLC, a unit of Italy’s Fiat SpA, according to Sterne Agee auto analyst Michael Ward.

Even more surprising is that sales of full-size pickups grew 20% from last year.

Gas is still expensive (by American standards) and the economy is still pretty lousy, so what’s going on? Why do hybrids continue to be money-losers while low-MPG truck sales are soaring? Why has Ford’s F-150 been the best-selling automobile for three decades? The old stereotype of soccer moms with misconceptions of safety ensconcing themselves in SUVs doesn’t explain the bump in full-size pick-up sales, nor the F-150’s success.

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