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Sales of hugely profitable full-size sport utility vehicles like the Chevy Tahoe and Ford Expedition are slowing down after zooming out of showrooms for years.

The cooling of America's love affair with the largest SUVs is a troubling sign for Detroit automakers, which count on the vehicles to prop up their bottom lines.

The typical full-size SUV now takes more than three months to sell -- up from a little more than a month in 2002 -- despite carrying more than $4,000 in rebates. That may explain why full-size SUVs -- the star of the North American International Auto Shows in years past -- were virtually ignored this year as automakers showed off a host of smaller crossover vehicles, fuel-sipping hybrids and boxy small cars.

"Their time seems to be over," BMW Chief Financial Officer Stefan Krause said last week. "You don't see huge SUVs here as you would have seen two years ago."

While some analysts and research suggest that U.S. consumers are starting to have their fill of large SUVs, automakers are far from ready to abandon a product segment that still produces nearly 1 million vehicles a year.

"We see that as a segment that probably still has some opportunity in it," said Joe Veltri, director of truck marketing and product planning for DaimlerChrysler AG's Dodge brand, whose 2004 Dodge Durango was one of the few big SUVs to post higher sales last year. "The margins in that segment are going to be very attractive."

But recent sales trends are raising concerns. Sales of large SUVs -- a category that includes GMC Yukon, Hummer H2, Ford Expedition and Toyota Sequoia -- were down 6 percent last year, with many models posting double-digit declines, according to Autodata Corp.

High gas prices may have deterred some consumers from considering the gas-guzzling rigs, whose fuel economy often rates below 15 mpg on the highway.

In December, 37 percent of shoppers planning to buy a new car or truck during the next 12 months said high gas prices have changed or will strongly influence their vehicle selection, according to the AutoVibes Report, conducted by Kelley Blue Book and Harris Interactive Inc.

But it may also have to do with changing customer preferences, said Stephen Girsky, a leading industry analyst with Morgan Stanley.

"I used to drive a (Lincoln) Navigator. Now I drive a (Cadillac) SRX. Was it a fuel thing? No. I like to be able to park a lot easier. I like the ride better. I like the quieter inside. It's a consumer taste issue as much as anything."

Consumer loyalty data from J.D. Power suggests that more big SUV drivers are opting for smaller SUVs. In late 2002, about 56 percent of large SUV owners were replacing their vehicles with another large SUV. But by late 2004, the loyalty rate had fallen to 50 percent.

While buyer preferences are always changing, a significant shift away from SUVs could be devastating for Detroit's automakers.

"It's their biggest fear," Girsky said.

Declining demand led automakers in December to offer an average rebate of $4,179 per large SUV, the highest of all vehicle categories, according to Edmunds.com.

But a lot of that can be explained by the lack of new models to choose from in the large SUV category, said Joseph Barker, an analyst with CSM Worldwide, an industry forecaster in Farmington Hills. New products attract buyers, he said, and the large SUV segment has been fairly quiet in recent years. "Some of the traditional players, they're in need of a refresh right now."

Ford Motor Co. and General Motors Corp., the two biggest sellers of large SUVs, expect to improve sales in coming years by introducing major updates of current models. But both companies are making plans to build big SUVs that share underbodies with steady-selling full-size trucks. That gives them the ability to shift production to trucks if the large SUV market should weaken further.

The next-generation Ford Expedition and Lincoln Navigator, set to debut in 2007, will share their basic underpinnings with the next Ford F-150 pickup. Ford is also planning to build a stretch version of the Expedition to replace the Ford Excursion, which goes out of production before 2007.

Chrysler this year will launch a new full-size luxury SUV called the Jeep Commander and could also design a Chrysler version of the Dodge Durango, its only large SUV.

GM, meanwhile, will bring out a full-size line of trucks and SUVs next year to replace its Chevy Silverado and GMC Sierra pickups and GMC Yukon, Chevy Tahoe and Suburban SUVs that have not had substantial upgrades in several years.

"We're obviously going to be advantaged when we bring out new trucks and utilities next year," GM Chairman Rick Wagoner said.

The new models should help GM, which controls two-thirds of the large SUV market and saw sales of the Chevy Suburban and other long-in-the-tooth models plummet last year.

But it may not be enough to win back customers who have abandoned large SUVs for smaller SUVs and wagon-like crossover vehicles.

Last year, small SUV sales were up 18.5 percent and crossover sales were up 13 percent, representing the two fastest-growing categories of the U.S. auto industry.

Though Nissan jumped into the big SUV game last year with the Pathfinder Armada, the Japanese automaker fell short of its sales projections. Sales came in under 40,000, though Nissan had wanted to sell 50,000 to 60,000. Other foreign automakers have not attacked the category with the same zeal as they have on the passenger car and small SUV segments.

Still, annual sales of large SUVs should continue to stay between 900,000 and 1 million through the end of the decade, barring a sustained spike in gas prices, said CSM's Barker. That would keep it one of the strongest categories of the U.S. auto market, in league with minivans, which had sales of 1.1 million last year.

Yet BMW's Krause doesn't see it. "The market," he said, "isn't going in the direction of ever-bigger SUVs."

Try telling that to Peter Linnemann, an engineer with Detroit Diesel, who would love to super-size his Dodge Durango for a Hummer H2. Ogling the goliath truck on Friday at the Detroit Auto Show during an industry preview, Linnemann, 50, said he knows the H2 chugs gas, but loves the adventurous look and brutish size of the $50,000 beast. "If I had the money, I'd buy one," he said.

It is this kind of attitude, along with rising sales of V8 engines and growth of full-size pickups that suggest to automakers there is still a market for big SUVs. But as fuel efficiency becomes a bigger issue in the years ahead, the Big Three and other automakers will offer more fuel-saving diesels and gas-electric hybrid options in big SUVs so that poor fuel economy doesn't scare off would-be buyers.

Americans will have another eco-friendly, yet dramatically smaller, option beginning next year, when DaimlerChrysler's Smart brand begins selling micro cars to the masses. At the auto show Friday, Kevin Shorkey, a minister from Ortonville, was sizing up the tiny smart fortwo, now only sold in Europe. Shaking his head as he circled the two-seater, Shorkey laughed as he imagined himself inside. "I believe I could get in it," he said, "but I'm not sure I could get out."



Source: Detnews
Good :D.
 

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Full size truck sales are still growing though. I was never much for a full size SUV unless I had a reason to buy one. I don't think I would even buy a Superduty at the moment, although I'm sure I will in the future.
 

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good... those things are a pita. stupid people park those things in compact spaces and make it super hard for me to get out. if it wasnt such a messed up thing to do, all those things would have shoe size indentations in the door panels :p
 

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hm.. bye bye SUV hahahaha amen... amitaba.. alhamdulilah.....
 

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What no Dodge Durango???

Matt
 

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small is always beautiful
 
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