Gas prices hit SUV drivers hard

HOUSTON — Like a lot of other Texans, Paul Lanier likes driving big pickups and SUVs. But that was before gasoline prices jumped above $2 a gallon.

Mr. Lanier, a 53-year-old high-school football coach and a lifelong Ford truck man, in February traded in his family’s Expedition and his own pickup for two Honda Motor Co. CRVs. The small sport-utility vehicle averages 25 miles per gallon in mixed city and highway driving, according to government figures — 47 percent better than the Expedition’s 17 mpg average.

Mr. Lanier says he feels “a little naked right now” without his big F-150 pickup surrounding him. “You do think about ‘Am I being loyal to America by not staying with Ford?”’ Mr. Lanier said. But “it comes down to how much money you want to spend and if you want to spend it on gasoline,” he added. “I wasn’t worried about my stature among my fellow Texans.”

It can cost almost $100 to fill up a full-size SUV these days. That’s jolting the loyalty of some of the big vehicles’ most die-hard fans: Texans. For years, Texas has been one of the country’s strongest markets for large pickups and SUVs. According to R. L. Polk & Co., 57 percent of new-car registrations in Texas last year were pickups and SUVs, 10 percentage points higher than in the nation overall. The huge Chevy Suburban SUV had been considered by many residents to be the “National Car of Texas” years before sales took off in other parts of the country.

But now, sales of large SUVs are falling in the Lone Star state. In January and February, registrations of two big General Motors Corp. SUVs, the Chevrolet Suburban and Tahoe, slumped 18 percent and 22 percent respectively, compared with the same months a year ago, Polk says. Registrations of Ford Motor Co.’s Expedition and Toyota Motor Corp.’s big Sequoia also declined from year-earlier levels by double-digit rates.

In Houston, some people say they are driving their big SUVs less, restricting them to highway trips, where the vehicles get better mileage, or to church on Sunday. Car shoppers seem to be less interested in big SUVs these days.

At Houston’s Knapp Chevrolet dealership, salesmen say sales of big SUVs are slow. They are putting more emphasis on small cars like the Aveo and Cobalt. Across town at Central Ford, customers one day recently were taking a look at the new Mustang that was squeezed in next to the massive King Ranch Edition Ford Expedition and the Texas Edition Ford F-150.

For a short time earlier this year, the Mustang was the top seller at the dealership, replacing the F-150, which is the most popular vehicle in the U.S. and the backbone of Ford’s profits. “Mustang is the bread and butter right now,” said Abdirahman Mohamed, sales director of Central Ford.

Nationwide, overall SUV sales slid 13.5 percent in the first quarter, according to Ward’s Automotive Reports. Sales of the biggest SUVs plunged, including a 28 percent drop for the Chevrolet Suburban and and 22 percent for the Tahoe. Sales of Ford’s Expedition fell 25 percent, while the Toyota Sequoia sank 12.6 percent.

Large luxury SUVs fared better. This category, including Nissan Motor Co.’s Infiniti QX56, Ford’s Range Rover, GM’s Cadillac Escalade and Toyota’s Lexus LX470, saw sales slip nationwide by 4.1 percent in the first quarter from a year earlier.

So far, pickup truck sales have weathered consumer anxiety over gas prices better than large SUVs. In the first quarter, sales nationwide of pickups remained flat against last year’s levels.

But auto makers are anxiously watching truck sales trends in Texas. Last year, Ford’s F-Series pickups alone accounted for 8.9 percent of new cars registered with the state, according to Polk. Auto makers and dealers say they expect consumer demand for pickups to remain strong.

Doug Scott, Ford’s truck group marketing manager, said there’s no substitute for buyers who need a pickup’s payload and towing capabilities. He said 40 percent of F-150 buyers use the trucks for towing. “That’s a much higher concern than fuel prices or fuel economy,” he said. Mr. Scott added that Ford’s research showed people won’t start to change their pickup purchasing decisions until fuel prices consistently stay above $3 a gallon.

But big SUVs appear to be more vulnerable, in part because there are a growing number of more fuel-efficient alternatives. These include newer “crossover” SUVs that are built on a car underpinning instead of a truck frame, giving them a smoother ride and better mileage.

GM and Ford have already made clear that their outlook for SUV sales this year isn’t bright. Both have cut SUV production plans. GM executives say they expect sales of large SUVs to rebound when their new models hit the market early next year. At Ford, by contrast, William Clay Ford Jr., the chairman and chief executive officer, said two weeks ago that his company’s product strategy is based on a projection that sales of “traditional” SUVs, built on truck frames, such as the Ford Explorer, are headed for a long-term decline as consumer demand shifts to crossovers.

“The shift out of traditional SUVS which we anticipated several years ago is happening at a rate faster than we anticipated,” Mr. Ford said during a conference call.

Ford sales analyst George Pipas says the decline in SUV sales started last year and has being accelerating.