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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 21941 
Subject: Re: Mungo- you watching the race from your balcony?
Date: 06/02/25 4:28 AM
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The US drives pickup trucks because there is an IMMENSE tariff on imported ones, so they are disproportionately profitable. (the temporary "chicken tax", don't ask)
...
That doesn't make sense. A large tariff on imported pickup trucks would cause American manufacturers to sell them for a higher price than if there was no tariff on imports. There would be MORE pickup trucks driven if there was a low or no tariff on them.


It's true that pickup trucks would be better value in the US without the tariff wall protecting the local manufacturers. Either cheaper or better or both. Since the US firms have no competition in pickups, they can and do charge more (and cut content), explaining their immense profitability. But that's not the only thing going on.

Never underestimate the power of motivation and brainwashing: the US firms have spent much of the last 60 years pulling out all the stops to convince people who need cars that what they really want is a truck instead. If you have one obscenely profitable product with almost no competitors and one so-so profitable product with tons of competitors, which one are you going to push as hard as you possibly can? In the end, ads work, and Americans internalized the idea that it's normal, even stylish, to drive around in a truck. The market share of pickups in other countries is tiny by comparison, as there is no motivation to push them. Canada is probably a bit in the middle since the brainwashing spills over even though the tariffs don't. Estimates are that F-series pickups account for around 70-90% of Ford's global profits in recent years, but certainly over half. The last Ford compact cars are being discontinued.

Jim
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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