Thursday, December 01, 2005

SUV love affair no more?

Apparently Sport Utility Vehicles sales aren't doing so well and I couldn't be happier about it. In today's Washington Post:

Gas prices have fallen in recent weeks, but U.S. consumers are still avoiding big sport-utility vehicles in favor of passenger cars, forcing domestic automakers to slow truck production...

Industry-wide, passenger cars gained market share from light trucks in November. Toyota's U.S. sales rose 13 percent, and Honda reported an 8 percent increase. Nissan Motor Co. trailed its larger Japanese rivals in the United States; sales fell 4 percent.

The sales spiral of the Ford Explorer demonstrates consumers' shifting tastes. It was once one of the nation's most popular vehicles, but Ford sold fewer than 12,000 last month, a 52 percent drop from November 2004.

At the height of the SUV boom in 2002, Ford routinely sold 25,000 to 40,000 Explorers a
month.

Ford is looking to offset the weakness in trucks with more sales of passenger cars, including the Ford Fusion and Lincoln Zephyr.

GM also felt the SUV crunch. In November, sales of the Chevrolet Suburban and Cadillac Escalade dropped 46 percent and 48 percent, respectively, from November 2004.

Analysts have blamed slumping SUV demand in part for the automakers' deteriorating financial condition. The automakers blame high labor costs, including health care costs and payments for pensions, and inflexible union rules.

U.S. consumers remain skittish about buying sport-utility vehicles after the fuel-price volatility during this year's hurricane season, said Robert H. Schnorbus, chief economist at J.D. Power and Associates. "Even though prices are down from their peaks, I think there is still a big concern or big issue in buyers' minds," he said.

It was really only a question of when such ridiculousness would finally come to an end. $3 a gallon gasoline is something Americans are going to have to get used to.

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