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The Honolulu Advertiser
Posted on: Sunday, July 10, 2005

Bigger SUVs lose sales to crossover vehicles

By Matt Nauman
Knight Ridder News Service

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SAN JOSE, Calif. — The 15-year reign of the big sport-utility vehicle is coming to an end.

Statistics compiled by two California researchers show the car-buying public continues to shift away from large, truck-based SUVs that have dominated U.S. highways since the early 1990s.

In April, SUVs like Ford's Explorer and Expedition and Chevy's Tahoe and Suburban represented just 12.1 percent of the U.S. car and truck market. That's the lowest point for that segment since May 1996, according to the Power Information Network, a J.D. Power and Associates affiliate that tracks daily sales at dealerships.

That's bad news for Detroit. Such vehicles are especially important to domestic automakers because Ford, General Motors and Chrysler have sold 86 percent of all large SUVs so far this year, www.Edmunds.com said. They provide big profits for their makers. While Chrysler has been doing well, both Ford and GM continue to lose market share.

Buyers are increasingly turning to car-based SUVs, the so-called crossover utilities, said Tom Libby, Power's senior director of industry analysis.

Those vehicles can offer all-wheel-drive, seven seats and plenty of cargo room — just like a traditional SUV. But they weigh less and get better gas mileage, and that has meant sales growth.

In fact, Libby said, car-based crossovers represented a record 49 percent of all SUV sales in April.

"We're talking about the end of an era where truck-based SUVs were growing without any inhibitions, where they seemed to dominate everywhere," Libby said.

The shift has been promoted by high gas prices, the availability of crossover utilities and the relative age of the truck-based SUVs. Four of the eight full-size SUVs come from GM and are due to be replaced next year, for instance.

The news was no surprise to Larry Tan, who was filling up his big, black Toyota Sequoia sport-utility at a gas station one recent afternoon.

"This is a very good car except for one thing — gas," said Tan, a real estate appraiser. He said he pays between $50 and $55 every third day to fill his tank. Not a surprise, given that the U.S. Environmental Protection Agency says a 2001 four-wheel-drive Sequoia gets a combined 15 miles per gallon.

Paying that much is "just terrible," said Tan, who added he's thinking of trading in both the Sequoia and his 1989 Honda Accord for a new vehicle that gets better mileage.

Edmunds.com, a Southern California-based auto information company, offers a different perspective that tells the same story.

Rather than break out sales of truck- and car-based SUVs, Edmunds.com relies on vehicle size.

Its numbers show that large SUVs represented just 4 percent of the market in April. That's down from 6.3 percent as recently as December 2004 and from an all-time high of 7.2 percent in December 2003.

That category includes the Dodge Durango, Ford Expedition and Chevrolet Suburban and others — all truck-based SUVs.

Sales of mid-size SUVs, which include some truck-based models like the Ford Explorer as well as some car-based ones like the Toyota Highlander, fell to 10.9 percent in April from a record 14.6 percent in October 2002.

Sales of luxury SUVs, such as the Cadillac Escalade and Mercedes-Benz M-Class, have remained steady at about 3.3 percent of the market, while sales of the compact SUVs, such as the Honda Element and Kia Sportage, are growing. They reached a high of 4.5 percent of the market as recently as February and were at 4.4 percent in April.

Power offered other signs of the demise of the sport-utility:

  • Traditional SUVs stay on dealer lots an average of 79 days before someone buys them. Car-based sport-utilities currently remain on dealer lots for 48 days.

  • While incentives are down slightly for both the total auto industry as well as SUVs, they're actually up for full-size SUVs (4 percent) and luxury SUVs (5 percent) compared with April 2004.

  • Almost 20 percent of people who owned a traditional, truck-based SUV and who bought a new vehicle in April purchased a car-based SUV.

    According to Edmunds.com, sales of all SUVs fell about 3 percent from April 2004 to 338,311 in April 2005.

    But the combined sales of car- and truck-based SUVs remain a huge part of the market. Together, they represented 23.9 percent of all vehicle sales in April, Libby said.