Published on October 4, 2005 by the Palm Beach Post
September SUV Sales Plunge as Owners Ditch Guzzlers
by Jeff Ostrowski
Michele Ryan loved everything about her large SUV — everything, that is, except its paltry gas mileage.
So the Jupiter woman recently traded her 1999 GMC Yukon for a Toyota Highlander with a gas-electric hybrid engine that uses a third as much fuel as her gas guzzler.
"I'm a big fan of big SUVs," Ryan said. "If it had decent gas mileage, I would have continued to drive it."
As pump prices soar to record levels, consumers such as Ryan are ending their love affair with the big, thirsty SUVs that drove Detroit automakers' profits for years — and sparked a bitter debate over motorists' responsibility for global warming and rising gas prices.
Ford said Monday that its large SUV sales plunged 51 percent in September compared with a year ago, and General Motors likewise said its sales of big SUVs plummeted.
Although no one expects big SUVs to disappear altogether, the threat of gas prices remaining above $3 spells the end of an unusual era for the auto industry, one in which rugged trucks built for snowdrifts and gravel pits became the choice of chic commuters in the Sunbelt. Suburban office workers who never ventured off-road flocked to SUVs that got 12 or 13 mpg.
Environmentalists welcomed the news that once-hot SUV sales have cooled, although they wish the shift had come sooner.
"It's about time," said Kay Gates, head of the Sierra Club's Palm Beach County chapter. "You wonder what people were thinking. They weren't thinking about gas."
Like many motorists, Ryan bristles at SUV detractors. She felt safe in the Yukon and said she'd still be driving it if not for the relentless rise in pump prices.
Her 7-year-old Yukon's fuel efficiency had dipped to about 10 mpg, Ryan said. The U.S. Environmental Protection Agency says Highlander hybrid owners can expect 33 mpg in the city and 28 mpg on the highway, an estimate that Ryan said has proved accurate.
Although consumers' appeal for big SUVs has faded, automakers and dealers don't expect motorists to flock to small cars. Instead, they're trading the large sport utility vehicles for not-so-big ones such as Ford Escapes and Honda CR-Vs.
Earl Stewart, owner of Earl Stewart Toyota in North Palm Beach, said consumers are replacing big SUVs with mid-sized SUVs such as the Highlander.
"We don't see any radical moves," Stewart said. "We don't see people coming in with a Chevrolet Suburban and buying a Scion xA or a Corolla. They'll go from a large SUV that gets 15 mpg to a smaller SUV that gets 20 mpg."
Rising gas prices spelled the death of one much-maligned Ford gas guzzler. The automaker last week ended production of the Excursion, a 19-foot-long behemoth that was the bane of environmentalists everywhere. The vehicle's sales had dipped from a peak of 50,000 in 2000 to fewer than 15,000.
Ford is shifting its attention to more fuel-efficient vehicles such as the Escape hybrid, a small SUV that promises gas mileage up to 36 mpg.
But GM hopes a revamped line of full-sized SUVs will keep motorists buying the profitable vehicles. New versions of the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade go on sale next year as early 2007 models.
Some analysts also expect SUV sales to bounce back, in part because the September sales figures for Ford and GM were depressed by the lifting of deep discounts that boosted sales earlier in the summer. GM's sales were down 24 percent overall, compared with the same month last year. Ford also took a hit, with sales down nearly 20 percent in September.
"It is going to take more than high gas prices to pry SUV owners out of their trucks," said Jeff Brodoski, an analyst at J.D. Power and Associates. "If you look out over the next five-year period, this is pretty much the bottom of the trough. We expect a rebound over the next two years. By the time you get to mid-2006, gas may not be as big an issue."
George Pipas, sales analysis manager at Ford Motor Co., who takes a conservative view of the segment, said: "The market is shrinking, but it is not getting vaporized."
No matter what, some consumers are glad to be rid of their gas guzzlers. Lake Worth real estate broker Chris Stevens bought a Hummer H2 in 2003 because he wanted an "image car" to promote his company, Wise Buy Realty & Investments.
But as gas prices neared $2 a gallon last year, he traded the Hummer for a Volkswagen Beetle.
"I saw the writing on the wall a long time ago," Stevens said.
Copyright © 2005, The Palm Beach Post