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.


  • Anonymous

    Well written article.

    Yes the Truck based SUVs with V8 engines has given way to Car based CUVs with V4 & V6 engines.

    I had a email conversation with Wall Street Journal author to whom I said that the sales figure of SUVs are higher for which he mentioned that Explorer is a SUV, actually its a CUV since it has unibody frame.

    Even Durango is designed with unibody, more vehicles could follow. Of late, many tall wagons like Juke & Mini Countryman are coming to market. Ideally every vehicle should be designed to be taller so that we have enough legspace.

    The difference between Wagons and CUVs are disappearing.

    Ofcourse GM sold many trucks last month, but they are giving huge discounts.

  • zach

    @anonymous: If we build vehicles taller and lighter wouldn’t that tend to cause more rollovers? I know that stability control is supposed to be mandatory in 2012, so I wonder if that will have the effect of making carmakers feel more secure designing “up?”

  • DownUnder

    I haven’t heard of V4 engine. Four cylinder engines usually have the cylinders arranged in straight line, not in V configuration. Am I wrong?
    To counter roll-over, make the centre of gravity lower. Taller vehicles also have bigger Cd.

  • Yegor

    “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 and 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.”

    Correction:
    17 mpg in the city and 25 mpg on the highway is a not a direct injection I4 engine but a regular V6 engine.
    Direct injection I4 engine is coming soon – should have about 10% better MPG.

  • Shines

    sean t, you are not wrong. Most car 4 cylinder engines are inline. There are V4 engines, though they are very rare. I think if you wanted one today you’d have to buy it in a motorcycle.
    Not that I’d ever buy one, but for example:
    http://www.motusmotorcycles.com/

  • Charles

    About V4s. For cars the inline 4 is by far the most common. Second is the flat/pancake/boxer version.

  • Sandysurf

    I wish that there were more station wagons to choose from instead of all these SUVs.

  • Anonymous

    While many models have a choice of V4 and V6 models, Honda CRV has only V4 model and yet it sells so well that it has outsold Accord in the last 2 months.

    While we may think that CRV has lesser mileage than Accord, we should also know that CRV has replaced many SUVs.

    Sandysurf : Soon the wagons will come, but with few inches taller, they may be baded as CUVs. For ex – Prius v

    One good thing is that in many models, now a choice of hatch is available. Versa, Fiesta, Sonic, upcoming Focus and so on.

    In Europe, Focus is sold only in Hatch & Wagon version.

  • Anonymous

    @zach: I guess it depends more on the centre of gravity (or how far the C.G. is away from the road) than the height of vehicles.

    In addition, a couple of things to consider:
    I think many SUV have body on frame design, which made them heavier and have a higher C.G.;
    the driving dynamics – e.g. suspension design – vehicles that are designed for good off-road performance may have longer suspension travel, making them less stable and more rollover prone in extreme conditions like avoidance maneuvering.

  • Anonymous

    http://finance.yahoo.com/news/A-Radical-Kind-of-nytimes-3311971807.html?x=0#mwpphu-post-form

    For those who are concerned about using nuclear power to run Electric & Plugin vehicles, read this news, there is a safer type of nuclear reactor concept called Generation-4 reactor, now the Chinese are building it.

  • Anonymous

    When Ford C-Max comes with a 5 + 2 concept, people will realize the utility of these tall wagons and this may shift a move from big SUVs and also big Sedans to these functional vehicles.

  • Tom

    The segment leader..equinox.. gets 32 to a gallon.. when they redesign in 2015, it’s supposed to go to a smaller platform, and get a further mileage boost. Will be interesting.

  • FamilyGuy

    In my humble opinion (without the math to back it up), I’d rather have longer and shorter (wagon) then taller (SUV/CUV).

    1. It’s easier to put things on top of a shorter; Christmas tree, kayak.
    2. Lower center of gravity means better handling and less feel of rolling over.

    Unless you need the ground clearance, I’d really just rather have a wagon.

    Then again, maybe it’s just my bias anti-SUV because of so many people that have them that really don’t need them that now complain about gas prices.

  • Anonymous

    Dear Anonymous,

    “Honda CRV has only V4 model”

    Incorrect. The Honda CRV uses an inline 4 cylinder engine.

  • Anonymous

    Tom said: “The segment leader..equinox.. gets 32 to a gallon.”

    According to Fueleconomy.gov: (city/hwy) fuel cost for 1 year @ $3.57
    Chevy Equinox AWD I4 20/29, $2,329
    Honda CR-V AWD I4 21/27, $2,329
    Chevy Equinox AWD V6 16/22, $2,817

  • tapra1

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