The end of the SUV?

G.M. Shifts Focus to Small Cars in Sign of Sport Utility Demise

Excerpts:

And in a humbling admission that the S.U.V. era is all but over, G.M., Detroit’s leading automaker, said it was considering selling the gas-guzzling Hummer brand it once regarded as a pillar of future growth.

In announcing the changes, Mr. Wagoner said $4-a-gallon gas prices had forced a “structural shift” by American consumers away from large vehicles into more fuel-efficient cars.

“These prices are changing consumer behavior and changing it rapidly,” Mr. Wagoner said before G.M.’s annual meeting in Wilmington, Del. “We don’t believe it’s a spike or a temporary shift. We believe it is permanent.”
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But the day of reckoning for the full-size S.U.V. and its 14-miles-per-gallon fuel consumption has been coming for some time.

“At the peak in 2002, G.M. sold 600,000 full-size S.U.V.’s, but they’re on pace this year to sell less than 250,000 of them,” said David Healy, an analyst with Burnham Securities. “And the nails in the coffin are getting screwed down a little tighter.”

Big Vehicles Stagger Under the Weight of $4 Gas

Excerpt:

With help from Jake Fisher, a senior automotive engineer at the Consumer Reports test track in Connecticut, I crunched some numbers this week to see how much more expensive these big vehicles had become. The answer is pretty simple: a lot more expensive.

While the F-250 costs $100,000 and a fully loaded F-150 — the better-known, smaller Ford pickup — costs about $70,000, a Ford Focus still costs less than $40,000 over five years. A Honda Civic Hybrid does, too. A Toyota Prius costs only a little more. A Subaru Outback station wagon runs $50,000 or so.

To put this in perspective, the difference between a Focus and an F-250 over five years is $60,000. The annual pretax income of a typical family in this country is also about $60,000. So choosing a F-250 over a Focus is like volunteering for a 20 percent pay cut. The relative resale values might cushion the blow a little, but not much.

That’s why more people are deciding that towing capacity and the other benefits of pickup trucks and S.U.V.’s are not worth the costs. The F-250 may still make sense for some business owners. But, as Mr. Fisher says, on those few occasions when the rest of us need to move some horses, we can rent a truck. “The new economics of car buying is, ‘Don’t overbuy,’ ” he told me. “Buy something you’re going to need most of the time.”


Comment: The end of the SUV? I hope so! (4 years ago I almost bought one. Gas was on the verge of $ 3.00 per gallon. We bought an Impala instead).