October 23, 2010 in Business

Sales sturdy for big SUVs

Core market remains despite push for fuel efficiency
Bob Cox McClatchy
 

President Barack Obama wants automakers to increase fuel economy standards dramatically over the next decade, but don’t look for big sport utility vehicles to become extinct.

Sales of full-size SUVs like the Chevy Suburban and Tahoe, vehicles that environmentalists love to hate, have plunged in recent years because of shifting consumer tastes, higher gas prices and the economy.

But sales are up modestly in 2010. Auto manufacturers and industry observers say there is a core market of customers who need and want a vehicle that can haul people and all their stuff and pull a boat or horse trailer as well.

“Unless the country decides to limit people to only having two kids, only having one activity and not having things like snowmobiles, jet skis and boats, then there will be some people who will still want these vehicles,” Chevrolet marketing manager Mark Clawson said.

On Oct. 1, the Obama administration said it is considering proposals to require automakers to boost the average fuel economy of their vehicles by 75 percent – from 35.5 mpg in 2016 to 62 mpg by 2025 – and General Motors and Ford announced improved sales of large SUVs.

Sales in 2009 of large SUVs were down 72 percent from their peak in 2003 but are up about 20 percent in the first nine months of 2010. Sales are up 11 percent for GM’s six models and 28 percent for Ford’s two models.

Given that large SUVs typically get 15 to 18 mpg, their survival has left many observers outside the auto industry shaking their heads. “This is so interesting, because everybody thought this vehicle was going to die,” said Rebecca Lindland, analyst for IHS Automotive.

GM has consolidated production of all its large SUVs at its Arlington, Texas, truck assembly plant, which has been working overtime for months and is on pace to build more of the trucks than ever before.

The large SUV market has shrunk mostly because many former buyers shifted to other vehicles. The proliferation of car-based crossover utility models, which offer room for up to eight passengers in a smaller, smoother-driving, more fuel-efficient package, has attracted many former SUV drivers.

But the remaining SUV buyers want the truck stuff: heavy load-hauling and towing capability.


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