SUV Jihad Continues as SUV Segment Atomizes
- March 4, 2006
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- Posted by George Peterson
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Back in November 2005, a VehicleVoice Blog commented on the existence of a periodic jihad on sport utility vehicles in the USA and worldwide. The introduction of General Motors’ GMT900 SUVs – the Chevrolet Tahoe and Suburban, the GMC Yukon and Yukon XL, plus the Cadillac Escalade and Escalade ESV have set the earth-is-flat crowd wailing again.
Audi Q7 Latest Target of SUV Jihad… This Time From British – Austrian Axis
But June 2006 intro of the Audi Q7 in the USA following its earlier introduction in Europe also will be watched closely. As Audi is about the last major brand to add an SUV to its lineup, it is a fresh target for the anti-SUV crowd. The March 2006 issue of CAR Magazine is a case in point. Georg Kacher, a 6-foot, 13-inch Austrian based in Germany, writes, “Big, heavy, chunky, aggressive, unwieldy – SUVs deplete our resources, tear up the countryside and flatten whatever they hit.
So why does a company like Audi, renowned for advanced engineering enter this bad karma segment?”
Because the market is allegedly craving a mud-crawler made in Ingolstadt, and because Audi firmly believes it can add a new dimension to the SUV game.”
As with many non-USA automotive journalists and even American buff book scribes, Kacher’s loathing of SUVs is mis-directed.
SUVs respond more to customer pull than manufacturer push. After the demise of station wagons (or estates as the Europeans so lovingly call them) and the image black hole called Minivans, came sport utility vehicles. These jack-of-all-trades vehicles carry people and stuff with aplomb. Well… more aplomb today than at any time in the past when they were admittedly crude trucks with a closed in cargo area. They go anywhere, anytime, with anyone, carrying anything within reason. They come in all flavors from the late and not particularly lamented Ford Excursion to the Suzuki Vitara. Populated between the Excursion and Vitara are SUVs of every ilk. Some are suited for suburban streets only. Some are rock crawlers. Some are designed to tow horse trailers and boats.
The beauty of SUVs is the breadth of choice within the segment. The SUV buyer has the luxury of choosing between more brands and more models than ever before. Like the overall auto industry, the larger SUV segment is atomizing into smaller and smaller niche entries.
Choice is good and Audi is welcomed.
The following article was posted by Barry McCahill, President of SUVOA or “Standing Up for SUV, pickup and van Owners of America”. SUVOA is a lobby self-described as “a non-profit consumer organization dedicated to supporting the rights and serving the interests of SUV, Pickup and Van Owners. SUVOA, formerly known as, Sport Utility Vehicle Owners of America has broadened its mission to represent the views of all light truck owners, thus adopting the new tag line, “Standing up for SUV, Pickup and Van Owners of America.”
Prediction: SUV Obituary Writers Will Be Disappointed
Hardly a day passes without at least one national story predicting the demise of SUVs as “aging baby boomers” supposedly switch their allegiance to crossover SUVs or cars. You’d think there was a stampede away from SUVs the likes of which hasn’t been seen since totanka were hunted on the Great Plains.
Typically included is an interview with some outspoken citizen who just ditched an SUV for a small car “to save gas and do my part for the environment.”
There is no denying that the SUV phenomenon attracted a lot of folks who bought them simply because they simply wanted one, much to the frustration of the “nobody needs an SUV” highbrows who favor centralized planning of transportation.
Contrary to the popular notion advanced by many editorial boards and pundits, high gas prices are not the only thing depressing SUV sales and motivating the switch by some to different vehicles. Other reasons that you don’t hear include these:
* We are just coming off a long period of huge sales incentives—most of those who wanted a new SUV or pick up truck already bought one. The end of interest-free financing and big discounts always results in a depressed market until demand for replacement vehicles rebuilds.
* There is a vibrant new vehicle market with lots of attractive choices competing for sales, including crossovers that appeal to those who like the SUV concept for comfort, safety and utility, but don’t need to tow or haul heavy loads.
* Baby boomers are not just aging—their kids moved out, so many no longer need a larger vehicle. Same with the housing market—boomers are selling the big hacienda and moving to smaller homes that require less upkeep.
So, why is it surprising that SUV sales are off and some former buyers opt for crossovers or cars? Indeed, the car companies started producing crossovers long before Hurricane Katrina forced a huge spike in gas prices precisely because they understand their customers, and that their SUV market was getting grey in the temples along with many potential buyers.
But wait. Before the last obituary is written about SUVs, there are some other indicators on the radar screen that portend that they will be with us for many years to come.
To wit, the RV industry just left Louisville, KY where it had its biggest trade show in history. The Recreational Vehicle Industry Association (RVIA) predicts that sales this year will be up 1.8 percent over 2004 (and sales in 2004 set new records). In fact, despite gas and diesel prices they predict the best year since 1978, about when the last national angst about gas prices and that pesky “dependence on imported oil” worry created the Corporate Average Fuel Economy (CAFE) program.
Along with triggering a wave of vehicle downsizing that institutionalized the deaths of tens of thousands of people, CAFE caused the demise of the station wagon that was used to tow boats and trailers.
The SUV replaced the station wagon. RV sales today are brisk both because people enjoy the RV lifestyle, and they have vehicle choices available to tow them. Crossovers can’t tow as much as large SUVs, and all those “aging baby boomers” that want to gear up and get out to see the country in an RV know it.
Posted by Barry McCahill, SUVOA President