http://www.msnbc.msn.com/id/15658052/site/newsweek/page/2/
Driving Forces: SUV Sales Take Off Again
About a quarter of hybrid owners have an SUV in the garage, too. Why the conflicted carports?
WEB EXCLUSIVE COMMENTARY
By Keith Naughton
Newsweek
Updated: 9:18 p.m. ET Nov 10, 2006
Nov. 10, 2006 - As gas prices have plunged since topping $3 a gallon this summer, a startling shift is taking place in the car market. Hybrid sales are slowing and SUV sales are speeding up.
Come again?
Thats right: the megawatt popularity of hybrids is dimming and Americans are rediscovering their favorite automotive guilty pleasure, gas-guzzling SUVs. And heres something even more shocking: a surprising number of Americans have it both ways. They own a hybrid and an SUV. According to an analysis for NEWSWEEK by researcher GfK Automotive, 24.2 percent of hybrid owners also have an SUV in their garage. Oh sure, plenty of hybrid owners like small cars, too. One in five of them has a diminutive gas sipper in the family fleet. But SUVs, from large to little to luxurious, are hybrid owners No. 1 stablemate, according to GfK, an affiliate of the Roper research organization.
Talk about your hybrid households. What are these people thinking, mooring a big land yacht next to the ultimate driving dingy? I asked Victor Tinio, who owns a Toyota Prius and BMW X5 SUV. He says he sees the contradiction, but doesnt feel like a hypocrite. I never thought about it that way, says Tinio, of San Jose, Calif. For him, the Prius is practical and the X5 is fun. He drives the Prius during the week, when he travels 80 miles a day for work.
He even brags about leaving SUVs in the dust in traffic jams because California lets hybrid drivers travel in the carpool lane. I see all these big SUVs who want to overtake me but they cant, says Tinio. I really love that. He says he got the X5 three years ago as a status symbol car and to haul his five children on skiing adventures. Now, though, theyre old enough to drive themselves and hes thinking about trading in the X5 for a sports car. He loves the 48mpg he gets in his Prius (versus 17mpg in the X5), but he still likes driving the Beemer better. As an engineer, I just marvel at the way the Prius works, he says. The only thing I dont like about it is that it drives like a sack of potatoes.
Tinios conflicted carport is emblematic of Americas struggle to give up the keys to our big rigs. Sure, in these days of global warming and global terror, we all want to save the planet and reduce our dependence on foreign oil. At least thats what we tell the pollsters. But then as soon as gas prices fell to the current average of $2.20 (off nearly a buck from this summers highs), Americans started turning to SUVs again. In September and October, SUV sales climbed 12.4 percent compared to the same two-month period a year ago.
Now, keep in mind those two months in 2005 included Hurricane Katrina, $3 gas and one of the worst auto-sales periods ever as Detroit ended its employee discounts for everyone promotion. So topping that wasnt too hard. Still, jumbo SUVs like the Chevy Suburban had their biggest month of the year in October. Meanwhile, hybrid sales fell 16.2 percent from September to October, according to Wards AutoInfoBank. Andrew McHorney of San Diego bought an inferno-red Dodge Durango last month because he needs something big to haul his sons Boy Scout troop and their camping gear. He claims to feel no guilt driving a vehicle that burns a gallon of gas every 13 miles. For some people, SUVs were a fad, he says, but for me this is a way of life.
So never mind all that talk of the death of the SUV. The only thing that really died is the SUV fad: as those big units lost status and gained stigma, sales plunged, sending Detroit into the ditch. But recent trends show that the right combo of low gas prices, new models and good deals (average SUV discount in October: $2,984) can still goose the SUV sales engine. People were doing funerals for SUVs, says Edmunds.com auto analyst Jesse Toprak. But that was premature. Still, Detroits not ready to declare the SUVs comeback. Ford Motor Co. is not counting on a rebound in full-size SUV sales, says George Pipas, market analyst for Ford, which lost $5.8 billion in the third quarter. Weve entered a new world where small cars and crossover utility vehicles rule.
Hybrids are also starting to show some fad fatigue of their own: sales are up by 23 percent this year, but thats mostly because so many new models have entered the fray. The good old Toyota Prius, which still accounts for nearly half of the hybrid market, has actually seen a small sales decline this year. (Toyota attributes the falloff to the federal governments recent 50 percent cut in the tax credit you receive for buying a Prius).
And remember, hybrids still account for just 1.5 percent of total U.S. auto sales. Analysts dont expect that to grow much any time soon. Consider this: the cohort of car buyers who would even consider a hybrid has fallen from 39 percent a year ago to just 14 percent today, according to CNW Marketing Research. Whats hurting hybrids? The word is out now that it takes years to make back at the pump the extra $3,000 to $5,000 you pay for a hybrid. And that payoff only takes longer as gas prices fall.
At this rate, it seems like hybrids will soon be joining SUVs in the discount lane at your local dealership. Indeed, Honda and Ford have already put incentives on their hybrids. But given hybrid owners apparent split personality, dealers might want to consider some kind of two-for-one promotion that pairs a Prius with a Pathfinder.
In fact, Prius owners are particularly keen on SUVs. CNW says theyre more likely to own an SUV than drivers of hybrid Honda Accords or Civics. Prius owners, an especially affluent group, also are partial to luxury cars, with nearly one in five sharing garage space with upscale wheels. That love of SUVs and luxury liners drags down the fuel economy of the family fleet in Prius households to just 22.8mpg, according to CNW. Thats lower than the family fleet mileage of households where one cars an Accord, Civic or even Toyota Corolla (which average 26.3mpg).
Perhaps this kind of automotive oddity is to be expected in a culture with an appetite for having its cake and eating it too. Toyota officials insist their Prius owners arent simply looking to pinch pennies at the pump. People who buy a Prius are proud they are helping the environment, says Toyota spokeswoman Ming-Jou Chen. Theyre giving something back to the planet. Maybe. But to me, this kind of driving duplicity explains why gasoline consumption continued to rise in this country even as gas spiked above $3 a gallon. It also shows why the average fuel economy of new cars sold today is lower than 20 years ago: we all talk a good game, but were not driving the talk.
