General Motors, Others Decide the SUV is Dead

Posted: Jun 04, 2008 11:58 a.m.

Pickup trucks and SUVs are hurting.  In May sales numbers, the Ford F-150 was knocked from its perch as the best-selling vehicle in the U.S., and sent reeling all the way to the fifth spot.  A glut of SUVs sits on used car lots, almost unsellable in today's market. 

The New York Times reports that large trucks and SUVS that were "the first generation of mass-market …to approach the six-figure mark" in price are now selling for "much closer to $50,000."

Brent Robinson, sales manager of a GM dealership in Minnesota, told the Toronto Star "We haven't had anyone crack the door on a Yukon or a Denali in 30 days."

Is the death knell of the gas guzzler here?

Jack Nerad, executive market analyst for Kelley Blue Book, told ABC News, "Up until now, we've said it's not dead.  But right now, it's probably on life support."

USA Today writes, "For a generation, pickups and SUVs have symbolized a rugged, oversized, no-holds-barred American lifestyle.  Tuesday, automakers made it clear that consumers are hitting the brakes on their love affair with the hardiest, roomiest -- and thirstiest -- vehicles."  According to USA Today, automakers expect the pickup truck to "trend back to its roots as the humble working partner of cowboys and contractors."

SUVs don't even have that working role to fall back on.  So automakers are re-organizing, planning to de-emphasize SUVs and produce more of the small cars Americans are now buying.

The Chicago Tribune reports, "General Motors announced a bold attempt Tuesday to wean itself from a dependency on large SUVs…declaring that gasoline prices won't retreat and the company must sell more small cars, some battery powered."  The automaker is closing four plants that make the large vehicles, and CEO Rick Wagoner has "said the future of the company's Hummer franchise is in review, with an overhaul of the military-style vehicle lineup or a complete or partial sale of the division possible."

GM has announced plans to rush a 40mpg small car to market as early as 2009, and hopes to introduce its Chevy Volt plug-in hybrid for the 2010 model year.

Ford Vice President for marketing told the Arizona Republic, "May was a watershed month.  We are, as an industry, catching up with the breathtaking choices the consumers are now making."

While it considers re-tooling its own lineup, Ford is making an effort to move the F-150 off dealer lots.  The New York Times notes that Ford has "announced an 'employee pricing' incentive plan on its F-Series pickup trucks that will allow customers to buy its trucks for the same price as the automaker's employees in June."  Ford will bring its new Fiesta small car to America for the 2010 model year, but has not yet announced any plans to introduce more fuel-efficient vehicles for 2009.

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