You’ve probably seen a local or national newscast about the declining demand for SUVs because of rising gas prices. That’s true…in some cases.
Once-venerable SUVs like the Ford Explorer and Chevy TrailBlazer are seeing huge drops in sales — 29% and 22%, respectively, for the year through June* — and the Explorer went through a significant update last year. Dodge Durango sales are down a whopping 37%. The trend runs across a number of other automakers’ lineups, including Toyota. That company saw sales of its large Sequoia SUV drop 30% through June, and even its car-based Highlander saw a near 13% fall.
But believe it or not there are some positive signs in the segment.
Luxury SUVs are doing well. The Land Rover brand was up almost 28% through June, and smaller SUVs like Toyota’s all-new RAV4 are red hot, up 103% in the month of June alone. Even the aging Ford Escape was up 4% last month.
While some are saying the SUV is dying, it looks to us like buyers are addressing their needs with smaller yet still utilitarian SUVs, especially those based on car platforms. Vehicles like the RAV4, Mazda CX-7 and others are basically today’s station wagons and get mileage similar to some midsize sedans. Expect to see their numbers only increase at the expense of their larger brethren.
*Year-to-date numbers (January – June 2005 compared to January – June 2006) were used to lessen the impact of last year’s Employee Pricing discounts, which accounted for much of June 2006’s drop in sales for domestic automakers as compared to June 2005.
