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Let us sit upon the ground and tell sad stories of the death of SUVs

By Joe Romm on July 6, 2008 at 11:37 am

"Let us sit upon the ground and tell sad stories of the death of SUVs"

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It may not be Shakespearean tragedy, but the once proud sport utility vehicle has finally fallen from grace. SUV sales are crashing, and they are getting too expensive to drive with $100 fill-ups, but you can’t get your money back in the used car market. Oh, and you better have a lock on your gas cap or thieves will siphon off your fuel.

I cannot shed a tear for SUV buyers, but I will refrain from saying “I told you so.”

suv.jpg

The Washington Post had a lachrymose piece last week, “SUV Drivers Burned Twice: At the Pump, on the Car Lot: Some Unload Vehicles for Less Than They Owe.” They noted:

In the first three months of this year, about 900,000 SUVs were for sale at online auto market AutoTrader.com, an increase of 19 percent over the same period last year…

May saw the steepest drop yet in the price of full-size SUVs, which are now down 24 percent compared with last year, said Tom Webb, chief economist for Manheim Consulting, which tracks the used-vehicle market. Prices continued to decline in June….

Some dealerships have stopped accepting SUVs as trade-ins….

My Prius, however, has, strangely enough, retained most of its initial value — but again I won’t say “I TOLD YOU SO” in all capital letters or anything. The CIBC projects a huge drop in SUV sales (see “Must read CIBC report: $7 gas by 2010, 10 million cars off the road, 1970s style GDP growth“):

cibc-suv.jpg

Indeed, if you were the kind of person who actually needed an SUV — let’s say you have five kids — why would you buy a new one, when you could probably get a used one for virtually nothing?

What does make our current situation at least a little Shakespearean is that we did this to ourselves, like King Lear, Othello, and, of course, Richard II. Blame the Chinese and the Indians all you want, but this little country of ours — This Eden, demi-paradise, This fortress built by Nature for herself, Against infection and the hand of war, This happy breed of men, this little world … this blessed plot, this earth, this realm, this England — with 5% of the world population, uses twice as much oil as China and India combined, who have more than six times our population.

Oh, the rare delight of reading in today’s New York Times, “American Energy Policy, Asleep at the Spigot“:

Senator Domenici, the senior New Mexico Republican … is even more critical of Detroit. “They all said to us: ‘Don’t change CAFE. It’ll come when it’s supposed to.’ That’s baloney,” he said.

UNTIL last year’s vote, Mr. Domenici was an opponent of new fuel-efficiency standards, a stance he now regards as a mistake. “We were like everybody else,” he says. “We should have been more active on CAFE sooner.”

With Detroit again seeing profits collapse as sales of big cars plunge, Mr. Domenici says he is worried about the survival of the domestic automakers.

“They talked a good research game,” he says. “But let’s face it, little was being done. They are suffering the consequences and could go broke just like the airlines.”

Must resist the urge to say “I told you so, I told you so, I told you” three times in a row, but wait, what did I read earlier in this piece….

Much of what we’re seeing today could have been prevented or ameliorated had we chosen to act differently,” says Pete V. Domenici, the ranking Republican member of the Senate Energy and Natural Resources Committee and a 36-year veteran of the Senate. “It was a bipartisan failure to act.”

Must stop head from exploding. Yes, Pete, if by “bipartisan failure” you mean, that conservatives blocked all sane action on fuel economy standards and cut funding for government-industry advanced research partnerships with the automakers while progressives were guilty of not being smart enough to convince you or the public of what was inevitable. Who else can we blame but the people who were right all along?

For the sake of literary coherence, I end with another quote from Richard II — just subsitute “America” for “England”:

This land of such dear souls, this dear dear land,
Dear for her reputation through the world,
Is now leased out, I die pronouncing it,
Like to a tenement or pelting farm:
England, bound in with the triumphant sea
Whose rocky shore beats back the envious siege
Of watery Neptune, is now bound in with shame,
With inky blots and rotten parchment bonds:
That England, that was wont to conquer others,
Hath made a shameful conquest of itself.

Wow! I made it through the entire post without once saying, “I told you so,” notwithstanding the aphophasis.

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26 Responses to Let us sit upon the ground and tell sad stories of the death of SUVs

  1. Brewster says:

    I’m so glad you were able to avoid saying “I told you so…”

  2. llewelly says:

    Like most American car sales strategies, SUVs were a scam, the buyers are scam victims. And unfortunately, $4.00/ gallon gas is probably not here to stay. It’s just brief pause on the way up.

  3. Dennis says:

    No fan of the SUV, I smile when I hear about these problems. When my 12-year old car finally dies, I may buy a used SUV. Since I take transit to work and rarely have to get into my car 5 days a week, I get by on one tank of gas a month for those necessary trips where public transit doesn’t exist. If the price is low enough and the math (including gasoline cost) works out, I may find that owning a used SUV is the cheapest solution for me, because no one else wants them.

    Also, ceteris paribus, buying a used car has less of a negative environmental impact because that’s one less car that has to go through the manufacturing and shipping process.

  4. caerbannog says:

    Big used SUV’s may become cheap enough for boy-scout troops, etc. to acquire them.

    A Suburban with two scoutmasters and 6 scouts would not be much less fuel-efficient than two Prii with one scoutmaster and 3 scouts each. And the up-front purchase price would be a whole lot lower.

    Neighbors might want to consider sharing ownership/costs of a big SUV (like folks share ownership of boats and airplanes). A big Costco run for three families could be done all in one whack with a big-a** Suburban.

  5. I’ve done calculations on this. A FULLY LOADED 2WD Suburban with the base V8 engine is actually pretty fuel efficient, more so than many compact cars in terms of its per passenger fuel efficiency. The problem with SUVs is that they have been driven at a much lower capacity factor than they have been designed for. People bought them with the idea that they MIGHT or ONE TIME A YEAR WILL need to use the extra space and/or horsepower.

    The idea of renting an SUV or light truck for when you need it is going to become a lot more popular. SUV sharing might become a new business model.

    On the other hand, there is little cause for Schadenfreude as many people were duped by a combination of politicians and industry to believe that cheap energy was forever. People have built their lives around these assumptions led by politicians and industry. The image of “cardigan-wearing” Jimmy Carter was a figure of ridicule: you would be wearing a hair-shirt (interesting association there) not to feed at the cheap energy trough.

    So the trick for writers about this is to express sympathy for the misled and no mercy to the leaders of the energy binge.

  6. Ronald says:

    I read where the domestic car companies had their most efficient plants, labor wise, building SUV’s because they were building so many of them. Now the manufactering plants that are less efficient will be building the smaller cars which still sell while the plants with the higher infrastucture costs will be idle more often.

    It’s a sad tale that you do tell well. Like most things that can catch up with us if we don’t do the right things whether it’s eating unhealthy, not enough exercise or to much debt whether credit card or more house than we can pay for or national government debt, it will catch up with us.

  7. Robert says:

    Strange that SUVs became so popular in the UK around 10 years ago – at one point about 50% of new registrations were SUV-type vehicles, when petrol cost more then than it does in the US now.

    That’s marketing for you.

  8. Eli Rabett says:

    A useful thing would be buying up the least efficient autos and scrapping them. The usual is that the worst cars get passed down the food chain.

  9. llewelly says:

    I’ve done calculations on this. A FULLY LOADED 2WD Suburban with the base V8 engine is actually pretty fuel efficient, more so than many compact cars in terms of its per passenger fuel efficiency. The problem with SUVs is that they have been driven at a much lower capacity factor than they have been designed for. People bought them with the idea that they MIGHT or ONE TIME A YEAR WILL need to use the extra space and/or horsepower.

    True. Note it implies most Americans should be riding motorcycles.

  10. Earl Killian says:

    Robert, sort of like bell bottoms?

  11. llewelly,
    Actually, the wind resistance of the upright stance on motorcycles makes their drag co-efficient higher than a slightly larger mini- or micro-car with a windscreen. The Aptera is closer to ideal in terms of its drag co-efficient. The fact that a small engined motorcycle gets about 75 mpg is underwhelming.

  12. Tom G says:

    I wonder how many older small cars headed for the boneyard just got a new lease on life?

  13. Ian says:

    Recently my wife and I purchased a Honda Fit. It had a lot to do with economy and only a little about the price of gas. My 2003 focus always got what I thought was extremely lackluster mileage for the smallest car in a company’s fleet (23-24 mpg average, and thats with a 20 mile highway commute against traffic, so it should be peak. although this is provided it did have the larger engine offered in the model). The $4.50+ price of a gallon of gas here in LA did make use look at another car, almost “upgraded” to a 2002 corolla (not knocking, but an older car with more miles is an odd upgrade).

    But here was the full scenario. The focus had 80k on it (reasonable but slightly high), and I could expect it to have issues once I paid it off (a friend’s 2002 focus had melted it’s electrical system and another’s had faulty wiring, and trouble from the word go). GIven the maintenance i put into the Focus, the fact that there was nothing but routine service on the fit until 100k was impressive. The insurance for both of us on our two cars now is less than the focus was for me alone. Add that we felt it was silly to have a 2 door car with kids (which we plan on in the next few years) and decided to stop paying for 2 doors of trouble and get to paying off the 4 door piece of mind.

    This is nothing shocking. It’s just a better car that will cost us less and that we’d need in a few years anyway. MIlage aside if I didn’t drive either one the Honda costs less until gas hits $6. But, get this, even though the estimated trade in from multiple sources for the Ford was $4000±, dealers would only offer $1500, a car buying service maxed out at $3000. Why? the Honda dealer was upfront. No one can move any american cars, except for the america lots (people go there cause thats what they are looking for) and even those are having trouble. The quality has always been a factor, but the lack of fuel efficiency extends beyond the SUVs. And while Chevy is offering $0 APR on the HHR, some Honda and Toyota dealers are having trouble with hybrid stock being available and able to get $2000 above the MRSP for their smaller cars. The non-domestic car lots are just sending used american cars to auction to liquidate them.

    The flip side is that I was able to, within 4 days, sell the focus to a private party looking for a more fuel efficient car for a little more than what I owed.

    So while all smaller cars are more desirable even the american ones. And the american ones, even at KBB value, are less valuable because they lost their value faster regardless of anything else. They will get snapped up by those looking to “upgrade” their fuel savings maybe even especially because of the lesser value, but the fuel sipping manufactures won’t really consider them for trade-in.

    A strange market out there now.

  14. Greg N says:

    Sadly, denying and delaying has made America poorer – not in the medium or long term as we expected, but in the short term.

    A lot of people will lose their jobs thanks to the criminal incompetence of the senior management of US car makers.

    GM’s shares are down 60%, losses of $50 billion plus. Was it on this website that I read that no US car plant is capable of making cars efficient enough to be sold in China, due to China’s strict emissions laws?

    If only they’d addressed reality a decade ago, instead trying to hide from it in a make-believe world of denial. They could be world leaders right now, ahead of the curve, making American cars number one again.

    It goes to show how free markets can cause enormous economic losses for us all – the economic costs of correcting the CO2 problem are tiny in comparison.

  15. Tom G says:

    North American cars manufactured in North America can’t compete in the Chinese market because of the huge difference in labour costs and on top of that shipping costs have to be added.
    But I’m puzzled by mention of Chinese auto emission laws.
    The 3.4 litre V6 in the Chevrolet Equinox is made in China and is used in Chinese made Buicks. I understand it’s a popular car in China for those who can afford it.
    And the old 4.0 litre in-line 6 is still installed in Chinese manufactured Jeeps. This is a very reliable engine that has had many improvements over the years, but its basic design dates back to 1966 AMC Ramblers.
    I’m guessing the emission laws are very similar, but maybe the Chinese government limits engine size?
    That would certainly eliminate a lot of North American products with their big engines.

  16. Greg N says:

    The “no-us-made-car-meets-china-fuel-standards” bit was at:

    http://climateprogress.org/2008/03/25/no-us-made-car-meets-china-fuel-standards/

  17. Tom G says:

    Aha!
    Thanks Greg, now I understand.
    Better efficiency standards.

  18. Uosdwis says:

    It’s SO funny that the loudest deniers’ central argument is that any restrictions imposed on Americans will crimp their lifestyle, particularly moving them towards “clown cars,” etc. But the instant gas hit $4, THAT’S EXACTLY WHAT IS HAPPENING ANYWAY!! So, go to hell, Mr. “No SUVs on Mars, yet they have global warming!” Fred Thompson.

  19. llewelly says:

    Actually, the wind resistance of the upright stance on motorcycles makes their drag co-efficient higher than a slightly larger mini- or micro-car with a windscreen. The Aptera is closer to ideal in terms of its drag co-efficient. The fact that a small engined motorcycle gets about 75 mpg is underwhelming.

    Agreed. But given that the average American is usually alone on the road in a car built for 4-6 people (Not an Aptera at all), a motorcycle would be a huge improvement.

  20. Robert says:

    Earl Killian – I’m just trying to point out that it can’t really be all about the cost of gas. People in the UK aren’t that well off, yet I don’t see anyone parking up their 4.6 litre Turbo Range Rover in the drive just because petrol is £1.22 a litre (i.e. over $9/gal). It must be the rapid change in the price of gas in the US that is upsetting people, rather than the absolute cost, and the reaction is emotional rather than logical.

  21. Earl Killian says:

    Robert, I agree with you entirely (and I am glad you reminder Americans of this all the time). Yes, the US is in shock because of gas prices right now (I read a newspaper story today about people moving to shorten their commute!), but if they stay the same for a few years, Americans will get used to them. If however they continue to climb, the shock may last long enough to have an effect.

    Like Joe, I believe the government is going to have to bring about automotive changes. This will have the quintuple effect of making the air more breathable, reduce global warming, save consumers money, improve the trade deficit, and provide more time for us to deal with peak oil. The opposition to achieving these benefits always amazes me.

  22. paulm says:

    Was that the graph of the Arctic Ice on the verge of collapse 2007? Looks very similar. Maybe theres a link…

    The writing is on the wall…
    http://www.reuters.com/article/newsOne/idUSBNG26150420080707?pageNumber=2&virtualBrandChannel=10222

    You do realize that we are seeing the collapse of GM – bankruptcy is probable in the next 18mths.

  23. MikeB says:

    Robert – speaking as someone from the poverty stricken island of manland Britain, your right to point out that large 4×4′s have been popular in the UK and much of Western Europe, despite much high fuel prices (‘We are up high, so we are safe!’).

    But overall, our historically higher fuel prices, mostly due to tax, have meant that most cars in the UK (and Europe) are still more fuel efficient than US models. I have yet to see a GM Suburban in the UK, and its worth pointing out that European SUV’s would possibly be lighter and more efficent if they did not have to qualify as light trucks in the US. The BMW X3 series is the perfect example of this, being just heavy enough to qualify.

    On the wider point, perhaps the US carmakers should look at what happened to British motorcycle industry. Japanese imports were derided, and Norton, Triumph, BSA and the rest all carried on doing the same thing they had always done. Now there isn’t a British motorcycle industry, destroyed by more customer friendly designs from Japan. The big three from Detroit can lobby all they like, but sooner or later, the reality of high oil prices and large costs will destroy them. Adapt or die? They are probably going to die.

    Must now go to scavenge rags to put on feet instead of shoes, and hope that the UN relief supplies get here soon…..

  24. Robert says:

    Still see a lot of these around our part of the world:

    http://www.buyacar.co.uk/detailyq10701.jhtml;jsessionid=F9FF279A10C27FC07A39BF2B0CBDF42E

    I guess if you can afford £67,507 (about $130,000) you’re not going to be too worried about the fact that it only does 17.7 mpg. And you’ll probably view the 376 g/km CO2 figure as a big plus, judging by the 4×4 owners I meet.

  25. Julius says:

    Robert, while that is true, I do get the impression that the number of SUVs on the roads here in Devon has decreased over the past few months, and particularly, the number of very small cars (like the Toyota Aygo and similar sized models) has gone up, especially among new cars. As well as the number of Priuses, although they’re nowhere near as “fashionable” here as in the US, so far…

  26. llewelly says:

    I’m just trying to point out that it can’t really be all about the cost of gas. People in the UK aren’t that well off, yet I don’t see anyone parking up their 4.6 litre Turbo Range Rover in the drive just because petrol is £1.22 a litre (i.e. over $9/gal).

    Although I agree the rapid change in price is part of the issue, I also suspect work commute and leisure driving distances play a role. The US has several large metro areas, such as LA and Seattle-Tacoma, which have average commute distances upwards of 60 (both ways) miles (~110 km) a day.