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Extra
Is the big SUV dying?
Sport-utility sales nosedive in September in the face of $3-a-gallon-gas, with giants like the Ford Expedition, Chevy Suburban and Toyota Sequoia falling hardest.
By MSN Money staff and wire reports
Sales of sport-utility vehicles took a dive in September, dragging down U.S. automakers who were already expecting a consumer payback after a summer of employee-pricing discounts. Gas prices that topped $3 nationwide after Hurricane Katrina didnt help.
The damage:
- Sales of the perennial best-selling SUV, the Ford Explorer, dropped by 58% compared with September 2004. Its larger kin, the Ford Expedition, which gets 14 mpg in city driving, saw sales drop 61%. Ford stopped producing its even larger SUV, the Excursion, last month.
- GMs full-size SUVs, due to be replaced with more fuel-efficient models next year, fell 56%. Sales of its Hummer H2 so heavy it doesnt fall under the EPAs fuel-mileage ratings system -- were off by 31%, but the brands smaller new SUV, the H3, is off to a brisk start. Its rated at 16 mpg in city driving.
- Toyota moved 46% fewer of its immense Sequoia sport-utilities, rated at 15 mpg city, and sales of its smaller SUVs were off sharply as well. Sales of Hondas largest SUV, the Pilot, fell 26%. Nissan sold 20% fewer of its 13-mpg Armadas.
The upshot? Overall General Motors sales were down 24% from last year; Fords by 20%. Both companies said their hugely successful employee-discount programs pulled ahead fall sales into July and August. Asian brands, which didnt offer employee discounts, felt less pain, mainly because they had a wider selection of small cars to fill the gap.
Whether the September sales shift represents a sea change in consumer habits is still unknown. While Toyota, Honda and Ford are selling every hybrid-electric vehicle they can make, sales of full-size SUVs still dwarf that output.
A September survey by AARP found 47% of the members it surveyed cutting back on travel and 39 percent visiting family and friends less often. Thirteen percent of the respondents even said they were offsetting high gasoline prices by eating less, and a like number were cutting back on medical care and prescriptions.
"These are lifestyle-changing prices," said James Toedtman, editor of the AARP Bulletin, in a statement.
Payback is hell
"Many of the superlatives that were used to talk about sales this past summer turned to expletives in September," George Pipas, the top sales analyst for Ford, said during a conference call with journalists.
GM said it knew September would be a challenge after a summer of heavily promoted discounting. GM began letting consumers pay the employee price in June and ended the promotion Friday.
Were coming off the three strongest months in the history of the industry, said Paul Ballew, GMs executive director of market and industry analysis.
Ford, Lincoln and Mercury car sales rose 6% in September, but sales of trucks and SUVs fell nearly 28%. Industrywide, sales of SUVs fell by almost a third.
Related news and commentary on MSN Money
They exhausted their customers and their inventories in July and August," auto analyst David Healy of Burnham Securities Inc. said. "This is the hangover from the employee discount pricing."
"People see $100 fill-ups and wonder what the hell they are doing," Healy said. "Even the rich who can afford it realize that maybe these vehicles don't do much more than a sensible vehicle could."
Pipas said the company expects SUV sales will stay soft in the near term. Analysts think so, too.
"Expect a very weak fourth quarter as well," said Steven Szakaly, an economist at the Center for Automotive Research in Ann Arbor, Mich.
Some buck the trend
Ballew cautioned that gas prices arent the only reason for falling SUV sales. He said an aging lineup of SUVs and more options in car-based crossovers also are affecting the segment.
Strong pickup sales were further proof that gas prices arent the only factor in the SUVs decline. The Dodge Ram pickup had its best month ever and its sales were up 5%, DaimlerChrysler said. Toyota said sales of its smaller pickup, the Tacoma, rose more than 21%.
Chrysler reported a 4% increase in September sales, led by a 26% jump in car sales. The Dodge Neon, which Chrysler stopped making two weeks ago, saw a 69% increase.
Toyotas sales were up 10% in September, thanks to a 22% increase in car sales, setting a third-quarter U.S. sales record.
Toyotas record sales reflect increased interest in fuel-efficient vehicles and hybrids, Toyotas North American President Jim Press said. Sales of the hybrid Toyota Prius surged 90%.
Hondas sales rose 11.7% thanks to its redesigned 2006 Civic, which helped boost car sales by 20%.
Hyundais sales were up 9% in September.
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