In the middle of last year I laid out some evidence that “peak auto” was not only a real thing, but posed a serious threat to the likes of Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM). It was an idea that received some…. shall we say “colorful pushback,” presumably from GM and Ford stock owners (and I am one of the latter) who didn’t want to face the ugly reality.

Since then, even with the demand whipped up by a couple of fairly devastating hurricanes late last year, 2016’s automobile sales in the all-important United States market were greater than 2017’s total. Peak auto was indeed a reality. Things aren’t off to a great start this year either.

Investors who’ve chosen to continue seeing the glass as half full rather than half empty argue that while total auto sales have tapered off, sales of higher-margin SUVs and pickup trucks are still going strong. As long as that’s the case, Ford stock proverbially remains in the fight. And, it’s actually been a convincing argument.

What if, however, truck and sport utility vehicles in the U.S. are about to hit a brisk headwind?

That may be what’s in the cards, and by some measures that headwind is already blowing. Current and prospective owners of Ford stock may want to put this possibility on their radar.

Not Just One Bad Month

Last month, sales of automobiles in the United States fell 2.3% year-over-year. The lull extends a downtrend that began in earnest in early 2017, and was only temporarily interrupted by the purchase of trucks in anticipation of hurricane Harvey and then prodded as reimbursement checks started to arrive.

Passenger cars were the culprit for most manufacturers last month. Car sales fell 12.6% overall, and are down 11.9% year-to-date. Conversely, sales of light-duty trucks grew 3.8%. SUV sales fell 3.9%, while cross-over sales grew a whopping 11.7% in February.

It’s interesting though. Even while truck and cross-over sales grew, the pace of their growth is slowing, again, and have already turned negative for Ford.

The company’s light truck sales fell 5.1% in February, while its domestic truck sales were off 6.5%; the 3.5% improvement in sales of its popular F-150 wasn’t enough to offset the ground it lost everywhere else. Year-to-date, Ford’s car sales are off 17.2%, while its truck sales are down 3.2%.

And for the record, General Motors’ truck sales were just as disappointing. The only manufacturers of consequence able to grow light truck and SUV sales were Toyota Motor Corp (ADR) (NYSE:TM) and Nissan Motor Co Ltd (ADR) (OTCMKTS:NSANY), but even they weren’t able to keep the whole segment of the U.S. market propped up.

What gives?

Competing with Used Trucks, SUVs

Jonathan Smoke, chief economist for Cox Automotive (parent of Kelley Blue Book), may have an explanation. He said late last year “There has been a disconnect between supply and demand in SUVs and crossovers that were underrepresented in used inventory but it’s over. This is the year we’ll see that.”

Other evidence supports Smoke’s theory. As the JD Power/NADA Used Car guide for February (current through January’s data) explained of the broad used-truck pricing trend:

“[price] declines were led by Large Pickup and Utility segments. While Large Pickup prices continue to be strong, the segment is showing signs of losing momentum. Prices for the segment fell by 1.7% in January and have now declines 4 months in a row. Some of the most severe Large Pickup declines for the month were observed among late model Ram-1500 models. Losses for the group reached an average of 3.1%, while auction volume grew by around 68% compared to December. The Large Utility Segment declined by a similar 1.7% followed by the Mid-Size Pickup segment with a 1.3% loss.”

In other words, now manufacturers are not only fighting each other’s new vehicles, but are also up against quality used pickups, SUVs and crossovers. Almost half of the vehicles being turned back in from three-year leases are SUVs and crossovers, putting them in that sweet spot between “not too many miles” and “very affordable payments.”

It’s also noteworthy that for some reason sales incentives on U.S.-made trucks and SUVs fell in February, rather than continuing higher. JD Power observed in the middle of last month that price breaks on trucks made by the likes of General Motors and Ford were down to the tune of $450 year-over-year.

That did crimp U.S.-market share for that segment of the market, reducing it by 3.2 percentage points from February-2017’s share.

Perhaps February’s slowdown is as simple as that. Still, it’s concerning, or at least should be concerning, to owners of Ford stock that the company is being forced to choose between volume and profit margins. It chose margins, but that decision may well do more damage to total profitability than the alternative.

Bottom Line for Ford Stock

To be fair, Ford stock isn’t dead in the water here. It’s adapting designing vehicles that are neither cars nor trucks nor SUVs… at least in the traditional sense.

For example, Ford’s Edge and Escape crossover vehicles satisfy consumers’ itch for a car and an SUV in one vehicle. This segment of the market arguably has more life ahead of it than the pickup truck or SUV market does.

Still, the crossover market is even smaller than the passenger car market. And, it’s just as vulnerable to saturation on the new and used vehicle front, even if the crossover market’s saturation tipping point isn’t quite as imminent as that of the truck market.

Just another thing for Ford stock holders to think about, as if the 20% pullback since the beginning of the year wasn’t enough.

As of this writing, James Brumley held a long position in Ford stock. You can follow him on Twitter, at @jbrumley.