Used Car Market flooded with SUVs?
As we mentioned last week, we Americans are doing what we can to get out of those huge gas guzzling SUVs and into smaller, more fuel effecient cars. This from Boston.com
>The sale of new SUVs and pickup trucks has dropped precipitously in recent months amid soaring gas prices and a weakening economy: SUV sales for the month of April alone fell 32.3 percent from a year earlier and small car sales rose 18.6 percent. This fundamental shift comes against a backdrop of relentless gas increases, and growing concerns over the environment and US oil consumption, according to auto analysts and car dealers.
>”The SUV craze was a bubble and now it is bursting,” said George Hoffer, an economics professor at Virginia Commonwealth University whose research focuses on the automotive industry. “It’s an irrational vehicle. It’ll never come back.”
This is something that shouldn’t be news to any of you. But it is nice to see people realizing that they don’t need a huge vehicle for every day use.
>Jon McHugh, of Swampscott, is celebrating the last payment on his 2003 Acura MDX by putting the SUV up for sale. He had expected to drive it a year longer, but rising gas prices and growing economic uncertainty made him reconsider. Plus, McHugh recently reacquired a taste for the convenience of a smaller car. Whenever possible, he drives his wife’s new Civic Hybrid, which costs half as much as the Acura to gas up.
>”I don’t need this much space,” McHugh said of his SUV. “It just seems ridiculous.”
I would imagine that if you are in the market for a late model SUV, in about another month you’ll be able to pick one up for a song!
[ Frustrated Owners to to Unload their Guzzlers ] Boston.com
Maybe in conjunction with all the home forclosures, people will buy SUV’s just to live in them. 😉
There are dealers here in Western New York that are refusing to take any truck or suv or minivan on trade.
Happy Motoring,
Jack
<strong>“It’s an irrational vehicle. It’ll never come back.â€</strong>
This has to be the best quote of the year!
The picture of that lifted Excursion is great.
Another great article published earlier this week:
<a href="http://www.sun-sentinel.com/business/custom/consumer/sfl-flhlpvasquezx0509sbmay12,0,1397307.column" rel="nofollow ugc">http://www.sun-sentinel.com/business/custom/consumer/sfl-flhlpvasquezx0509sbmay12,0,1397307.column</a>
<strike>Hate To Say</strike> Love to say, “I told ya so!” 😉
Now, Who is wearing the slogan <strong>Size Matters </strong> and smiling about it!
I heard yesterday that one of the big auto resellers here on the east coast isn’t even interested in looking at V8’s anymore.
Too bad this trend won’t do much to bring down gas prices. The bulk of those old SUVs will still get sold and driven, consuming just as much gas as before. As gas goes toward $5.00 over the next two years SUVS and trucks will probably continue to take a hit price wise, as demand lowers. However, there will always be a price at which people will buy an inefficient product.
Still nice to se though.
It always amazed me that the F-series was one of the world’s best selling vehicles, especially given, probably over 90% of sales would have been in one country only.
After the recent addition of a family dog to my family equasion, I just benifitted a bit from this glut… picked up what I feel to be a “classic” SUV to use as a third/snow/camping/beach weekend/dog car:
A straight and clean single-owner 1994 4-Runner V6 manual 4×4 with a complete dealer service history for $4200!!!
It sucks… gas, that is (16-20 MPG)… but it’s not like it’s my daily driver. So I’ll drive it once or twice a week, guilt free.
Imagine this to the tune of Dire Straits “Money For Nothing”…
I love my… I love my … I love my SUV!
I really do love all my SUVs. I guess it is a good thing that I have no intention of selling any of them. In fact, I plan to buy a couple more!
More and more, I find myself enjoying MINI ownership while I detest the MINI “community” and it’s collective “small mind”.
It is not the fuel consumption of the SUV, it is the greed of the oil companies and the gullibility of the consumers that has caused the price of gasoline to reach nearly $4.00/gal. here in the states. I hear some idiots out there saying, “such-and-such country has been paying $4.00/gal. or $6.00/gal. for X number of years. It’s about time that Americans join the club…” This is B.S. Whatever happen to the “bulk discount”? I’ll tell you. Nothing! Individuals, commercial entities and governments enjoy bulk discounts on a daily basis. Ever heard of Sam’s Club? Don’t blame SUVs (a useful tool for many). Yes, they can be big. Yes, they can do damage to other motor vehicles in an accident, yes it generally consumes more fuel than your average econobox. So what? The same a-hole who goes on TV and talks about global warming probably owns stock in companies that do exponentially more damage to our environment than SUVs.
Fact. There is no shortage of oil. Fact. Oil companies fix prices. Apparent fact. People are idiots and will follow along like sheep to the slaughter and pay any price for gasoline. Why? Because we are dependent. If you really give a crap, write your congressman. Better yet, boycott the purchase of gasoline for a couple of weeks. Watch what happens. Just call the boss, tell him you are “telecommuting” for a couple of weeks to boycott oil prices and suggest he/she do the same. In fact, suggest that he mandate that everyone does it, company-wide. Watch what happens when folks stop pumping gas. Better yet, I wish truckers would stop delivering goods for 2 weeks!!
I am sick and tired of the SUV bashing. Wake up people. Take a look in the mirror and you will begin to see the real problem.
Good night and have a pleasant weekend!
Like the credit crisis, how anyone could not see this coming is beyond me.
The only question was when.
Don’t get talked into taking over somebody’s payments, a lot of these vehicles have more owing than they are worth.
Let’s hear a collective awwwwww for the RV dealers, you think that the Dodge truck dealers have it bad.
A
“The SUV craze was a bubble and now it is bursting,†said George Hoffer, an economics professor at Virginia Commonwealth University whose research focuses on the automotive industry. “It’s an irrational vehicle. It’ll never come back.â€
If this is true then why are the BMW Overlords [strong]Hell Bent[/strong] on giving MINI a SUV? This seals the coffin on SUV production.
Don’t get me wrong. If a MINI SUV that shares a Diesel with a BMW SUV gets us a Diesel that can be put in the Hatchback… I am for it.
But Honestly quit wasting money developing a SUV. Guve us what we want! An AWD Clubbie and bring the MINI One Turbo Diesel to the USA!
I really don’t understand how many of you are totally caught up in and/or pissed off about a MINI SUV. Besides the few comments in this post and a few others, I currently have several emails that are of the hateful variety in my inbox.
This is a vehicle that nobody has seen (AWD Clubman test mule spy shots don’t count) and the only thing we know about it, for sure, is that it will be AWD and based to an extent on the Clubman and 1 Series.
The Clubman. A car that is 9″ longer than the R56
A car that gets the same MPG as it’s R56 brethren.
A car that, still, barely has room in the backseat for 2 full sized passengers.
Quite a number of you are acting like it’s the end of the world because MINI will be building a replacement for the Ford Excursion. When, in reality, this will be a car that, I can only imagine, will be quite a bit smaller than a RAV4 or CRV and still get over 25mpg. I also think it’s going to be only slightly larger than a Clubman. Larger to accommodate 4 real doors, seating for 4, possibly 5, and a bit more boot space than the Clubman has now with the seats up. To me, this sounds like the makings of a nice sized wagon, not an SUV.
But, I too am only speculating. I don’t have wild dreams of gas guzzling MINIs terrorizing the city-side. Instead, I’ve gleaned the information right from this very site. Check out <a href="https://www.motoringfile.com/2008/04/04/a-close-look-at-the-2010-mini-crossover/" rel="nofollow">this post</a> and <a href="https://www.motoringfile.com/2007/12/19/minis-sav-to-be-part-minipart-bmw/" rel="nofollow">this one</a> for the most comprehensive information we have to date.
Maybe before everyone gets all riled up because in a press release somewhere MINI used the term SUV, we should not worry about it until we see what the car will really look like or get some honest-to-goodness specifications about the car.
And, don’t worry. If it’s a fire-breathing, gas-guzzling Suburban killer, all of you haters can line up behind me.
My other car is a Honda Element and with gas so high, I drive it about 6 times per month now. Also remember that oil started its climb out of the $20 range when the US dollar started its fall due to gross mismanagement.
oil prices are also rising due to a lot of speculation in the commodity markets. Big investors have a lot of cash laying around and they are looking to make a quick buck. So they have bid up the price of oil just as irrationally as they bid up the price of real estate, stocks, you name it.
Excellent !!! I really hope Mr Hoffer is right 🙂
All this started with the LandRover and Toyota Landcruiser. Why people need SUVs to drive in the city is a mystery. Most of them are driven by Soccer moms. But everyone jumped on the bandwagon to make these variants. Thats ok when gas is cheap. Remember Issigonis was asked to design a small ecomomical car when the Suez Canal crisis erupted in the late 50’s.
Deja vue?
I think the vehicle that truly started the SUV craze in the US was the 1991 Ford Explorer. It was affordable, it was new, looked rugged, it was 4 doors and it had just been featured in the first Jurassic Park film. The Toyota Land Cruiser and Land Rover of the time were expensive, niche vehicles. It was “plusher” than most of its competitors in its price range.
Another favorite of the time was the Jeep Cherokee that had been introduced years earlier.
Many people like to blame Detroit for the proliferation of these type of vehicles. In truth, everyone and their mother benefited from them. Japan, Germany, Korea, et al all made and continue to manufacture their own renditions of the SUV theme.
Like it or not, the truck based (or frame on body) SUV is a dead duck. I will go back to fulfill its previous life duty of being the exclusive realm of farmers and trailer/boat owners.
But be prepared… After 2010 no one is going to be making these animals any longer. Someone is going to have to restore these old vintage SUVs to keep ’em running.
Everyone here has to admit that is a time when you need a truck to haul things around. We have a 2005 SportTrac that is a nice as a amall hauler. I do think now, as before, that something like an Expedition/Excursion/Suburban was completely uneccessary. I can’t tell you how many times I see these things driving with one person on board.
Bottom line is we need to be drilling in ANWAR and the Gulf of Mexico using OUR oil reserves and get off saudi source. The author is right. There really is no oil shortage other than the one we have artificailly created.
The climbing high price of oil/gas does not only have to do with consumption in the US. The Asian market for example has been experiencing an enormous amount of car sales due to the rise of disposable incomes. So high in fact that they are predicting by 2010 car sales will DOUBLE in China alone.
All this trickles down to the world market.
I found a great article about the current state of gas prices <a href="http://www.businessweek.com/lifestyle/content/may2008/bw20080513_720178.htm" rel="nofollow">At Newsweek</a>. Worth a read if you have the time.
Great article, DB. Thanks for the heads up.
LOL! Many great comments but my favorite is DB’s
“Quite a number of you are acting like it’s the end of the world because MINI will be building a replacement for the Ford Excursion. ”
Oil is high and getting higher because demand is growing and will continue to grow (e.g. India/China plus us & others) and supply is static or declining. End of cheap oil forever? Yep! End of the world? Nope. High cost oil provides just the incentives we need to develop alternatives; and we will.
Are Hummers dead? Yep, especially H1 and H2 models. Are SUVs dead? Nope. Sales will drop but their versatility guarentees continuing demand from all segments. Plus, they will get more ecomomical. With Prius’ getting in the mid 40s its not unrealistic to imagine a more streamlined RAV 4 sized SUV getting 35 mpg in 3 to 5 years. I can’t wait to see a Mini 4×4 SUV on 30 inch risers! (just kidding).
Last year, Exxon/Mobil made a $40 BILLION profit. The biggest profit ever, by any company, in the entire history of the world. $40 BILLION. In a year that was considered by many (US speaking) to be on the edge of a recession. In a year that millions of Americans were hurting.
Wouldn’t $20 Billion have been enough? No? $30 Billion? How much is enough? What about shaving a few dollars here and there in the interests of what’s best for Americans? Naw. What about some gov’t cap? Isn’t price fixing sort of illegal?
That this profit occurred in an era of government malfeasance is no coincidence. It’s a result of a “screw everyone else” mentality that pervaded from the highest elected office on down. It’s corrupt. And it’s the result of oil-men running the White House.
I don’t see SUV’s dying anytime soon. They’ll continue to become more efficient, more flexible in terms of fuel options, etc. Smaller, better designed too. Didn’t BMW just launch a new one recently? Realistically, there is no reason for ill-concieved, ugly and wasteful behemoths like the GMC Yukon and its ilk to exist.
I own a MINI and an SUV. I like them both, each for their unique qualities. That said, I’d be fine with a day when the majority of cars on the roads of America are of a reasonable size and efficiency. Y’know, like Europe. Let’s get some of those hot hatches over here!
Nah, it’ll never happen.
All I can say is wow… Bitching about Exxon profits is like complaining your drug dealer is screwing you for profits. Kick the habit! Also, while I don’t defend thier business practices, ever look at thier gross revenue? It’s freakin huge! Margins aren’t that high…
And here’s one for you.. Let’s look 40 years into the future at Meecum or some other auto auction…
“Comming to the podium now is a rotissary restored Caddilac SUV complete with period correct 24″ spinners! I remember when you couldn’t trade these in due to gas braking $4/gallon sometime near the turn of the century.” (Other announcer breakes in…. “I remember that too! Now we’d be happy to pay twice that!” “Lets start the bidding at $100k!” 😉
Matt
I look forward to the near future when the cars in front of me at the light can be seen over from the comfort of my mini.
I think the Mini crossover (SUV) will find its market and they will probably name it the “Moke” after the original.
<a href="http://image.motortrend.com/f/future/future_vehicles/8560564/112_0703_08z+mini_moke+front.jpg" rel="nofollow ugc">http://image.motortrend.com/f/future/future_vehicles/8560564/112_0703_08z+mini_moke+front.jpg</a>
Dr Obnxs,
You must own Exxon stock. I am with Kurt regarding a $40 Billion dollar profit while many companies close their doors and people can’t afford to pay their mortgages.
I guess if things get tough enough, I can live in one of my SUVs…
It’s tempting to paint SUV owners with a broad brush, as Prof. Hoffer does, but the real world is not so simple. My 2005 MCS seats 2 adults and 2 kids and gets about 26 MPG. My Honda Pilot seats 5 adults and 3 kids and gets 18 MPG on the same roads. I frequently carry 5 people, which would require 2 MINIs at a combined 13 MPG; so which is the more efficient vehicle? When I do drive the Pilot alone, I’m usually hauling several hundred pounds of tools and driving on a deeply rutted ranch road that would rip the floor pan off my MCS. I’m thankful that I can afford two vehicles, but if could keep only one, it would have to be the SUV. Gas would need to hit $10/gallon for me to actually save money by owning the MINI.
Certainly there are many SUVs driven by people who don’t need them, but in what sense do people need a Corvette or RX-8, both of which use as much gas as my Pilot? Or how about a WRX or a MCSa convertible, which aren’t much better?
Another point that is often missed: it’s not just the MPG but also the miles driven that determine total fuel usage. I have one co-worker who drives a Tahoe 4 miles to work, and another who drives a Prius 20 miles to work. Guess who burns more gas and produces more CO2 on his daily commute?
Yeah its getting to the stage of can afford the car but need to borrow for the gas.
BMW are being hopeful that enough people can afford to buy and run X5 and new X6 despite their current spin of efficient dynmaics and quoting urban use figures that nobody can get close to.
Bring on the MINI Colorado Diesel 4WD.
The Honda Pilot is a “crossover” SUV. It is not really based on a truck platform (Honda doesn’t have true truckish platforms and the Honda Ridge pickup is FWD by the way).
I respect your opinion and you may be one of the many that “actually needs an SUV”. But the same could not have been said 20-30 years ago.
Instead of tooling around in a Honda Pilot, you may well have been driving a Ford Crown Victoria Country Square wagon or an Oldsmobile Vista Cruiser wagon.
Talking about MINIs and SUV’s (including the Hummer) – the Australian Federal Government has released in the latest Federal budget plans to increase luxury car tax from 25% to 33% for vehicles costing more than AUD $57,000.
So not only is there the fuel price hike, but also the luxury car price bracket hike. More aussies are down-sizing to compact cars from the oil price hike alone.
If MINI gets the numbers and marketing right, they could find and potentially dominate a market niche down under, but may need to drop prices a bit to capture more market share to compete in the small to medium vehicle segment.
I’ve got an idea, but it’s going to take cooperation from a bunch of people.
Week 1: Nobody buys their fuel from Exxon (US) or Esso (Canada).
Week 2: Nobody buys fuel from Chevron or PetroCan.
Week 3: Shell
This would be like wildcat strikes or rolling blackouts.
If PetroCan didn’t sell much fuel for a whole week, competition will soon kick in.
Andrei,
I’m in!! This is exactly what we need to do to fight back!