SUV's Losing Interest... Durango still favorable
#1
01-29-2005, 05:40 PM
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SUV's Losing Interest... Durango still favorable
By BRETT CLANTON
The Detroit News
published: 01/27/05
DETROIT – Sales of pro-fitable full-size sport-utility vehicles such as the Chevy Tahoe and Ford Expedition are slowing after zooming out of showrooms for years.
The cooling of America’s love affair with the largest SUVs is a troubling sign for Detroit automakers, which count on the vehicles to prop up their bottom lines.
The typical full-size SUV now takes more than three months to sell – up from a little more than a month in 2002 – despite carrying more than $4,000 in rebates.
“Their time seems to be over,” BMW Chief Financial Officer Stefan Krause said. “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 segment that 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.
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.
-Matt-
The Detroit News
published: 01/27/05
DETROIT – Sales of pro-fitable full-size sport-utility vehicles such as the Chevy Tahoe and Ford Expedition are slowing after zooming out of showrooms for years.
The cooling of America’s love affair with the largest SUVs is a troubling sign for Detroit automakers, which count on the vehicles to prop up their bottom lines.
The typical full-size SUV now takes more than three months to sell – up from a little more than a month in 2002 – despite carrying more than $4,000 in rebates.
“Their time seems to be over,” BMW Chief Financial Officer Stefan Krause said. “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 segment that 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.
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.
-Matt-
#2
01-29-2005, 07:36 PM
#3
02-04-2005, 06:04 PM
RE: SUV's Losing Interest... Durango still favorable
If you need to carry 6 people, there are nicer alternatives like the Freestyle crossover, or the Pacifica - even the Magnum replaces the smaller 5 passenger ones with more style and efficiency than the Trailblazer, etc. The whole category was silly anyway. Why have this super duty chassis made for towing hauling and extreme abuse, but never use it for anything more than carrying your daughter's ballerina class in the lap of leather luxury?
#4
02-07-2005, 07:36 AM