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Full-Size SUVs Lose Appeal with Consumers

Discussion in 'Fred's House of Pancakes' started by randalla, Mar 23, 2005.

  1. randalla

    randalla Member

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    From Business Wire & The Detroit News....America's love affair with the full-size SUV is losing its steam. Results from a recent study from the Power Information Network (or PIN), a division of J.D. Power and Associates, show that consumer interest in full-size SUV's has decreased substantially over the past year. Sales of full-size SUVs dropped 21 percent last month and 31 percent in January. The Detroit News listed a few examples of full-sized SUVs that saw declines through February according to Autodata Corp.:

    Chevrolet Suburban: -37.8 %
    Hummer H2: -32.6%
    Ford Expedition: -24.4%
    Toyota Sequoia: -14.4%

    Full-size brands that saw gains:

    Nissan Armada: +33.5%
    Dodge Durango: +17.3%
    Cadillac Escalade ESV+8.8%:

    PIN's new-vehicle transaction data from the first two months of 2005 revealed that car and truck owners in 18 of 20 vehicles segments were less likely to trade their current vehicles for a full-size SUV than they were during the first two months of 2004. PIN notes that these 18 segments represent more than 95 percent of the new vehicle industry. The only two remaining segments that showed any movement towards the full-size SUV segment were owners of entry mid-size cars and owners of full-size vans. The study also revealed that the seven segments that have exhibited the greatest decline in purchase consideration for full-size SUVs include all four luxury car segments, the luxury SUV segment, the premium sports car segment, and the midsize SUV segment.

    So what caused this decline in consumer interest? Rising prices at the gas pump are being considered as a major factor that's contributing to the decline of full-size SUV sales. The Detroit News reported that sales analysts from two of the nation's top automakers acknowledge the fact that an increase in gas prices is a factor but they believe that the sales decline comes primarily from the changing needs of an aging population. The declining interest is also causing a major build up of inventory on dealer lots. This is definitely a big concern for automakers, especially for Domestic companies that depend on this segment for a majority of its revenue.
     
    #1 randalla, Mar 23, 2005
  2. richard schumacher

    richard schumacher shortbus driver

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    Detroit-brand dealers will start handing out free testosterone to help firm up sagging SUV sales.
     
    #2 richard schumacher, Mar 23, 2005
  3. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    Give it time, give it time.

    When the American manufacturers of large vehicles see their profits dropping too much, they will plea to the government to help bail them out because, after all, "we don't want all our American dollars going to foriegn automobile manufacturers". So the government will give them money (our money!) to bail them out.

    It wouldn't surprise me if their strategy all along went something like this:
    1) Continue making gas guzling vehicles and take a hit.
    2) Lay off a lot of poeple to reduce overhead and clear out some union shops.
    3) Plea to the government for free money.
    4) Bring back the SuperCar and be right back in the race.
    5) Keep the government money. Duh!

    And with Chevy, GM, and Ford in the top three losers spots, it's just a matter of time.
     
    #3 TonyPSchaefer, Mar 23, 2005
  4. KCPrius

    KCPrius Member

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    Tony, I was reading business week this week and there is an article on GM...apparently the contract with the UAW stipulates that they pay 75% wages for laid off workers, so layoffs don't really gain them much.

    Yesterday on the drive home from work, I was listening to talk radio and the topic was "Will high gas prices make you change cars". There were lots of gung ho cowboys talking about "I ain't giving up my truck no matter how much gas costs". There were a couple of callers I found interesting, and which prompted me to call in.

    The first guy was someone who said he went back to his old Camaro Z-28 because he could get 32 mpg out of it on the highway (he didn't mention around town mileage). The second was a guy who said he had a Mitsubishi Eclipse, but he had to get gas every couple of days, so he got a Suburban with a 40 gallon tank, and he could go "about 600 miles between fillups".

    So I called in and gave them the only two facts I had - the first being that since trading our two cars for two Prius's, our monthly gasoline costs have dropped from almost $250 to right around $80. The second was that my last fillup I had almost 500 miles on the tank, and was hard pressed to pump 10 gallons into it. I also mentioned that that tank (and every tank I've had) has lasted between 12 and 14 days.
     
    #4 KCPrius, Mar 23, 2005
  5. DaveinOlyWA

    DaveinOlyWA 3rd Time was Solariffic!!

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    kcprius; it used to be 90% of wages, but to say that it didnt benefit GM is not really true. for one thing, it would be 90% total and when you consider unemployment, GM's share was actually only about a third. but wages is only half the picture as laid off people lose benefits and time accrued if they get called back.

    also, before we had the option to continue medical but it was for a hefty price. when you consider that GM employees dont have to pay a penny towards their medical insurance, that was a huge chunk of an already reduced paycheck.
     
    #5 DaveinOlyWA, Mar 23, 2005
  6. kidtwist

    kidtwist New Member

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    Read an article this morning in which Lutz said they're going to concentrate on SUVs because of the profit margin.

    From the article:

    "Lutz dismissed concerns that volatile gasoline prices might reduce the appeal of large SUVs, saying, 'Rich people don't care' about prices at the pump."

    Sheesh.
     
    #6 kidtwist, Mar 24, 2005
  7. KCPrius

    KCPrius Member

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    <div class='quotetop'>QUOTE(kidtwist\";p=\"75430)</div>
    Lutz is an nice person.
     
    #7 KCPrius, Mar 24, 2005
  8. Wolfman

    Wolfman New Member

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    Moved to FHOP
     
    #8 Wolfman, Mar 24, 2005
  9. Tideland Prius

    Tideland Prius Moderator of the North
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    technically, he has a point. But when the rich people who have cash to throw away realise that everyone else is snubbing them for it, they'll eventually joing the bandwagon. Besides, we all know it's about image and fitting in
     
    #9 Tideland Prius, Mar 24, 2005
  10. jayman

    jayman Senior Member

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    <div class='quotetop'>QUOTE(kidtwist\";p=\"75430)</div>
    Wow does Lutz ever have chutzpah! Oi! :roll:

    Seriously, this guy is a boob. He has completely lost all touch with reality.
     
    #10 jayman, Mar 24, 2005
  11. hill

    hill High Fiber Member

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    He could have just stopped at, "He doesn't care".
    Now, years later, he still doesn't care . . . and he's putting the land boats onto a hybrid format . . . supposedly.
     
    #11 hill, Dec 4, 2007
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