With High Gas Prices, Consumers Shift to Smaller SUVs
The early months of 2011 have seen both a major recovery in auto sales and record monthly highs in the price of gasoline. This has resulted in widely reported trends that could create confusion about consumer attitudes related to fuel efficiency. In one breath, we’re seeing the rise of small, fuel-efficient gas cars like the Chevy Cruze and Ford Fiesta. But then the media is reporting that sales of SUVs and light-duty trucks are rising right along with the price of oil. Don’t be fooled by these reports.
The official numbers indicate that trucks and SUVs were up 32 percent for the month of February, with General Motors alone seeing demand rise by more than 60 percent. Even more surprising is data suggesting that a large portion of the market seems to have come to terms with the idea of expensive gas and decided that driving a large vehicle is worth the extra cost. A recent survey by LeaseTraders.com found that among the drivers who traded in their SUVs for more fuel-efficient options in 2008, nearly 60 percent have since returned to their less efficient vehicles. There’s also a survey by Interclick, which found that among mothers, safety and value still reign supreme as determining factors in selecting a new vehicle—and that moms continue to prefer SUVs to any other vehicle segment.
Are We Talking about SUVs or CUVs?
All of this data supporting the continued persistence of the SUV doesn’t tell the whole story. Americans may be devoted to their large vehicles, but as we saw in 2008, every relationship has its breaking point—and gas prices haven’t yet even come close the levels they hit at the height of the last SUV exodus. Consumers may be more comfortable with the idea of paying $3.50 or even $4 for gasoline than they were in 2008—inflation alone tends to have that effect—but what about $4.50 or $5?
It’s even more important to consider the rise of the Crossover SUV (a.k.a. crossover or CUV), which should be viewed more as a large wagon rather than a SUV. These vehicles—and the light truck segment as a whole—tend to offer superior fuel economy to the gas guzzlers that became so popular during the 1990s and early 2000s. Most of these models (which give the appearance of a SUV) are unibody front-wheel-drive vehicles rather than body-on-frame trucks.
The top-selling SUV of 2004 was the Ford Explorer, which carried a combined fuel economy rating of just 15 mpg. 2010′s top-seller was the Honda CR-V, with a combined rating of 24 mpg. So although gasoline has become more expensive in recent months, carmakers have managed to give consumers the large vehicles they crave with fuel economy numbers that are palatable in comparison to older SUVs. In fact, the 2011 Ford Explorer, once the poster child for SUV-obsessed America, has moved to a car-like unibody construction and added an EcoBoost turbocharged four-cylinder engine as an option and a six-speed automatic transmission as its standard powertrain. As a result, the 2011 Ford Explorer is rated at 17 mpg in the city and 25 mpg on the highway.
In addition, the recent rise of pick-up sales was also influenced by improvements in the general economy, which gave businesses the ability to make purchases that were put off during the recession.
So stories and surveys suggesting the return of the SUV craze should be taken with a grain of salt. The reality is that Americans are shifting down in every segment, and are looking at fuel-efficient alternatives, such as hybrid and electric cars, with more interest than ever. This trend will only gain more momentum with each uptick in the price at the pumps.