Car Sales Outpace SUV Sales

A Love Affair With S.U.V.’s Begins to Cool (NYT)

To believe the commercials, sport utility vehicles can climb the most indomitable mountain, ford any stream and haul around the kids to boot.

But gas prices are a more unconquerable force of nature. With higher prices at the pump sinking in as something more than a blip on the radar, and with several new passenger car models winning back customers, America’s love affair with S.U.V.’s is taking a breather.

For the first time in 14 years, the passenger car is actually taking sales back at the expense of S.U.V.’s and other trucks, according to an analysis of auto sales data. The renewed interest in cars over the first four months of the year, while modest, is a pause in what has been the trend in auto sales for the last decade and a half: the soaring growth of the sport utility vehicle as America’s preferred family vehicle.

Sales of medium and large sport utility vehicles – like the Ford Explorer and Chevrolet Suburban – have stalled, and the torrid sales growth of large pickups has cooled.

While much of the slack is being taken up by smaller and less bulky S.U.V.’s known as crossovers, overall sales of S.U.V.’s are down 1.7 percent while passenger car sales are up 3.1 percent, according to Wards Automotive, which tracks auto sales.

Though gas prices surely don’t help matters, it seems unwarranted to give them such a prominent place in the story. After all, as a JD Power analyst mentions down the page, they currently have less of an impact on automobile consumption than they did two decades ago (indeed, when adjusted for inflation, gas prices are “not nearly as high as they were in the early 1980’s”). I haven’t seen the data upon which this analysis is based; I therefore can’t vouch for how it controls other variables that could impact sales. But it’s strong enough, I suspect, that the Times should have probably taken a bit more of the limelight off gas prices, especially when other factors — like the entry of new car models and the closure of some SUV product cycles — seem pretty significant.

To reporter Danny Hakim’s credit, the accompanying audio slide presentation strikes a more nuanced pose: he casts some doubt on the gas-price hypothesis. I only wonder why the same factual care didn’t quite make the article.

FILED UNDER: Economics and Business
Robert Garcia Tagorda
About Robert Garcia Tagorda
Robert blogged prolifically at OTB from November 2004 to August 2005, when career demands took him in a different direction. He graduated summa cum laude from Claremont McKenna College with a Bachelor of Arts in Philosophy, Politics, and Economics and earned his Master in Public Policy from Harvard's Kennedy School of Government.

Comments

  1. McGehee says:

    The automakers have indeed been introducing some exciting car lines lately. And no one can deny that SUVs have been something of a fad, much like the minivan fad that preceded.