http://www.detnews.com/2005/autosins.../A01-60827.htm


"Their time seems to be over," BMW Chief Financial Officer Stefan Krause said last week. "You don't see huge SUVs here as you would have seen two years ago."

While some analysts and research suggest that U.S. consumers are starting to have their fill of large SUVs, automakers are far from ready to abandon a product segment that still produces nearly 1 million vehicles a year.

"We see that as a segment that probably still has some opportunity in it," said Joe Veltri, director of truck marketing and product planning for DaimlerChrysler AG's Dodge brand, whose 2004 Dodge Durango was one of the few big SUVs to post higher sales last year. "The margins in that segment are going to be very attractive."

But recent sales trends are raising concerns. Sales of large SUVs -- a category that includes GMC Yukon, Hummer H2, Ford Expedition and Toyota Sequoia -- were down 6 percent last year, with many models posting double-digit declines, according to Autodata Corp.

High gas prices may have deterred some consumers from considering the gas-guzzling rigs, whose fuel economy often rates below 15 mpg on the highway.

In December, 37 percent of shoppers planning to buy a new car or truck during the next 12 months said high gas prices have changed or will strongly influence their vehicle selection, according to the AutoVibes Report, conducted by Kelley Blue Book and Harris Interactive Inc.

But it may also have to do with changing customer preferences, said Stephen Girsky, a leading industry analyst with Morgan Stanley.

"I used to drive a (Lincoln) Navigator. Now I drive a (Cadillac) SRX. Was it a fuel thing? No. I like to be able to park a lot easier. I like the ride better. I like the quieter inside. It's a consumer taste issue as much as anything."

Consumer loyalty data from J.D. Power suggests that more big SUV drivers are opting for smaller SUVs. In late 2002, about 56 percent of large SUV owners were replacing their vehicles with another large SUV. But by late 2004, the loyalty rate had fallen to 50 percent.

While buyer preferences are always changing, a significant shift away from SUVs could be devastating for Detroit's automakers.

"It's their biggest fear," Girsky said.

Declining demand led automakers in December to offer an average rebate of $4,179 per large SUV, the highest of all vehicle categories, according to Edmunds.com.

But a lot of that can be explained by the lack of new models to choose from in the large SUV category, said Joseph Barker, an analyst with CSM Worldwide, an industry forecaster in Farmington Hills. New products attract buyers, he said, and the large SUV segment has been fairly quiet in recent years. "Some of the traditional players, they're in need of a refresh right now."

Ford Motor Co. and General Motors Corp., the two biggest sellers of large SUVs, expect to improve sales in coming years by introducing major updates of current models. But both companies are making plans to build big SUVs that share underbodies with steady-selling full-size trucks. That gives them the ability to shift production to trucks if the large SUV market should weaken further.

The next-generation Ford Expedition and Lincoln Navigator, set to debut in 2007, will share their basic underpinnings with the next Ford F-150 pickup. Ford is also planning to build a stretch version of the Expedition to replace the Ford Excursion, which goes out of production before 2007.


(more at the link)

 

good riddens man
the most useless vehicles on the planet for 90% of the people who own them

 

I love my Z71 Suburban...but I have three kids.
When we travel, it's full. I use it to tow and it only gets about 8k miles a year.
It's not a surprise that people are downsizing. Many owners can use a smaller truck, but opted for the bigger vehicle based on pricing.
There is little delineation in price in some circumstances.
S.

 

Yeah,really...and I'm sure that all the people with small or low slung cars will be glad to see a reduction of those things hopefully soon.It's a bitch to try and back out of a parking lot with one(or one both sides of you)..and among other problems for cars caused by those big SUVs.

 

I'm thinking the Big 3 saw this coming a while ago, thus the shift to smaller SUV's and car products. I for one am looking forward to being able to see over and around more vehicles as I'm driving down the road!

On the down side...the lower popularity of SUV's will have safety and environmental groups shifting their focus to the "evils" of performance cars and larger V8 engines. One thing I can say for sure is that SUV's took some of the pressure off of cars like F-bodies and Mustangs.

 

I bet Nissan is kicking them selves now for getting into the big SUV market

 

I think GM was aware of this and has built in redundancy into its lineup for this purpose. Why else would you have the TB EXT which is a 7 seater SUV with a 5.3 DOD V8 AND have a Suburban with a 5.3 also? I don't see anyone getting hurt.

 

If these land whales are going to survive they need to have a optional DIESEL motor!!

 

not to mention that most of my friends that drive SUVs for their 30-mile 1-way work commute are the FIRST people to bitch and moan whenever the gas prices spike up

 

The reason the sales are down is the lack of new product. Expect to see the sales go way back up when GM rolls out their new lineup of full sizers. All those people with a 99 or 2000 Tahoe will buy a new one.

Also, diesiel engines should be offered in ALL SUV's. You get a lot better gas mileage, and help shatter the image that they only get 10 MPG.

 

i'm sure that will help
i can see the new full sizes from chevy definately getting a lot of sales
but the market as a whole, i think, is declining like the writer thinks (and the auto world in general)
maybe people are finally thinking "maybe we don't need something that has a little bit more space but gets 10mpg less"

 

GOOD!

But i doubt they'll go away anytime soon. They'll be around for decades to come, but their market share will most likely dwindle.

The cross-over is definitly putting a hurting on SUV sales in general and alot of the mid-sized trucks and SUV's are becoming more capable now that output from their v6's have gone up considerably. They offer good utility without the heavy fuel penelty, etc... The general populace is also more fuel-conscious now that prices are closer to 2 bucks a gallon.

 

With trucks and SUVs taking something like half the new vehicle market, I'm not going to pop out the champange just yet over a 6% drop at a time US overall vehicle sales are dipping, possibly the same amount.

If you have a decent sized family, do alot of camping, or live in rural areas I can see needing a Suburban or Tahoe. But I don't see any reason for anyone needing anything bigger than an Explorer or Trailblazer for daily use.

I'm also probally one of the 3 or 4 people on the planet that thinks the Aviator makes more sense and looks better than the oversized Navigator, so I'm probally not the 1st person you'd want to take seriously on this subject.

 

The biggest killer the the Domestic large SUV , IMO .....is a combination of very practical ( i.e. most people with a 4x4 never see the mud ) , very stylish luxury mid-suv's . Cadillac SRX , Acura MDX , Volkswagon Toureg , Volvo's new SUV ect. have to have pulled alot of sales from the big SUV market . I would take a smaller , infinately more luxurious diesel V10/6speed auto VW Toureg over a Big loaded to the gills Tahoe LT anyday . Before you laugh at the diesel , it has 553 lb/ft at 2000 rpm and can tow 7700 lbs .

 

GMT-900 SUVs and Trucks need a Diesel in 1500 models. 605tq & $6,000 is too much power and money for most Tahoe and Silveado 1500 owners. The next gen trucks might have a Duramax pushing 700 ft-lbs. torque 4.9L Duramax V6 with 450tq would be perfect. Very powerfull, cheaper than the V8, and better milage than the V8.