Large SUV Sales Surge Faster Than Small Cars

Toyota Sequoia
Plug-in electric hybrids and electric cars have taken up much of the digital airwaves over the past few weeks (or years, depending on your perspective), but it may surprise you to find out that “passé” full-size SUVs are increasing in popularity once again. 

So far this year, full-size SUV sales have increased 19%, beating overall industry growth of 17%. The full-size SUV category is composed of large body-on-frame SUVs, like the GMC Yukon, and large crossovers, such as the Lincoln MKT and Chevrolet Traverse. 

If the surge in SUV sales catches you off guard, the same can be said for automakers. GM has low supplies of its Cadillac Escalade and Chevy Tahoe, triggering overtime at the truck factory in Arlington, Texas, where they’re built. Some employees are now working 10 hours a day and even working on Saturdays to fill demand, according to USA Today. 

Toyota has increased production of its Toyota Sequoia, but the automaker wouldn’t specify by how much. Nissan can't keep up with the demand for the new 2011 QX56 Infiniti, representatives recently told Cars.com. 

According to USA Today, part of the reason for the surge in large SUV sales may have to do with the impending regulations that may make these vehicles a rare find, or at least much more expensive than today’s models in order to curtail demand and meet the federal government’s more stringent Corporate Average Fuel Economy standards. Today’s stable gas prices, now at $2.75 a gallon, are helping out as well. 

Large SUV sales are good for automakers because it’s basically like “printing cash,” says Jim Hall at 2953 Analytics. That’s because traditional body-on-frame SUVS share much of their hardware with full-size pickup trucks. 

Interestingly, the much-hyped compact car segment – which is right on the cusp of getting new entries from GM, Ford, Hyundai, Mazda and Scion – is underperforming in the overall market, with just 14% growth for the year. More refined and expensive compact vehicles were supposed to help automakers not only meet CAFE standards but sustain profits with the loss of more profitable SUV sales. 

Small-car market share of the overall industry now stands at 17.3%, which is still dramatically up from the same time in 2009, as other segments — such as large cars, small SUVs, minivans and luxury car sales — have lost market share. 

Despite the surge in SUV sales, the segment still makes up only a fraction of the market. So far this year, about 121,000 have been sold, compared with 974,000 small cars. We still sell more cars than trucks in this country, a shift that occurred in mid-2008 and has stayed that way ever since. 

Overall, light-truck sales – which include minivans, crossovers, SUVs and pickup trucks – are up 14.6% for the year, at 2.6 million, according to Automotive News. 

Still, the surge in SUV sales may be a bittersweet affair for automakers. Intense political pressure to reduce our dependency on oil – especially after the BP oil spill – could force automakers to build more fuel-efficient cars, regardless of consumer demand. Starting in 2011, the first boost in CAFE will take place and will steadily increase throughout the years until it reaches 35.5 mpg for the new car fleet in 2016

Surprise: Sales of big SUVs surging faster than small cars (USA Today)

Comments 

Amuro Ray

Americans just doesn't learn....

We cry for high gas prices and then we keep buying gas guzzlers when gas prices not so high...the spiral of cry babies

There's no free lunch!

(For those that say "we are a free country that embrace capitalism," then just don't cry for high gas prices when they come, because playing with gas prices in the stock market IS PART OF capitalism!)

WestPhillyForever

LOL @Amuro: "Americans just don't learn..." I was going to say almost the same thing. It's funny the things we complain about and identify as "bad" but somehow just "can't stop ourselves." Of course at the same time, this is how market forces are supoosed to work. People want their big 'ol honkin' SUVs and they're willing to pay higher gas prices...but not 2007 high. ;oP

I think a good thing about 2007 was that it proved that small cars CAN sell in America and big trucks ain't in our DNA - it's a learned preference. It's just a shame that prohibitively high gas prices seem to be the only thing that will bring about the change.

Anonymous Coward

I guess the average American wants a super-sized vehicle to go with their super-sized meals and super-sized rump.

Happymantis

Sad, I thought maybe we could have stood a chance when oil in the middle east finally gets depleted and provides a knockout punch to the global economy... Now it seems we're just prepping to continue on with our foolish ways. I suppose we could ruin the Alaskan wilderness to buy a more years of cheap oil until that runs out too.

113

And this is exactly why we need a Gas-Tax. During the summer of 2008 when gas was approaching $5/gallon a real shift was occurring in the country. Now that gas is about half-that now we as a nation are slowly reverting back to old buying habits.

We need that Gas Tax if we have any hope of cutting our addiction to oil.

Zack

113,
YOu might be right, but a lot of folks would argue that a gas tax is a job killer.

Only people I see crying about SUV's are the people that wouldn't buy them anyway..if you can afford to pay $100 every other day to gas up your SUV then who am I to say don't buy one...in this economy some people are just more fortunate than others and that's just the way it is.

Thomas

It always the poor people who do the most whining.

Gino

@Thomas, on what do you base the assertion that it's only the poor who are whining about these SUV sales trends? How do you know the AGIs of the post-ers on here? My family is one of the lucky ones--we're both working and making okay money, but we divested ourselves of the family aircraft carrier in favor of a sedan rated at 30-35mpg. As a non-poor person, I'll put it out there: With all we now know about the oil market, who's producing and exporting oil to us, and all of oil's costs, it may be your free American choice to snag a Yukon, but you're a cretin if you do.

Dan

A stricter gas guzzler tax would be more effective than a gas tax.

A gas guzzler tax directly taxes those who are making the vehicle decision that gets it off the lot and impacts what the manufacturer builds. Also, it is an immediately visible tax, where the gas tax comes in bit by bit over time and is easier to ignore. Plus, a gas guzzler tax is less regressive as it doesn't disproportionately affect those who can only afford older, less efficient cars, but still achieves the desired outcome of a motivation to improve the fuel efficiency of the auto fleet.

One note here, SUV fuel economy has much improve over last few years keeping them attractive for some. Look at the NEW 2011 Ford Explorer, they say it has improved fuel economy by 30%. That's part of the reasons.

atterratt

shows unequal rise during "recovery"
- SUV sales go up because the people that can afford them experienced the recovery, while everyone else is still suffering. Nothing against those who buy them, but don't blame everyone for these sales, it's not the average person buying these.

Amuro Ray

Actually, I do not think that the economy's recovery is the reason why sales have gone up. If that's the case, then the sales figures of other luxury items (premium vehicles, clothings, etc.) should have gone up too. As noted in the original post, SUV (full-size) sales have gone up, and that can be both cheap and expensive models. I believe that gas price is the main factor - Americans are just numbed to sub $3 gas now and think that it'll, AGAIN, stay @ $3 4ever...so let's put everything else (pollution, our control of oil by foreign countries, etc.) behind.

In addition, it's really a fallacy for one to believe that it's ok to buy SUVs nowadays 'coz their efficiency has gone up. 30% improvement of a 17 mpg hwy vehicle (most full size SUV)...u do the math...5 mpg...so now 23 mpg hwy. But remember, this is under the most ideal, fwy no traffic criuse control conditions @ 55mph. 99% of the drivers will most likely not to achieve that, based on the way how we drive (lead foot, city driving / fwy congestion / over speed). Worst of all, statics have shown that there's only 1 person - the driver - driving a SUV (any size) most of the time. Putting 2 to 2 together, and you've a ~15 mpg vehicle on the road, for 1 person. Imagine - same person on a gas saver like a Fit or Versa, or hybrid vehicle.

We learned to share when we were kids, to love and be responsible for the environment when we were young, and somewhere along our line of growing, the art of don't care...

WestPhillyForever

@Thomas: Irrespective of how they wound up poor, poor people probably have the most to "whine" about, dontcha think?

Actually I knew a couple of very-much-not-so-poor people who were bi*ching about the cost of gasing up their SUVs waaaaaay back in 2007.

Surely Thomas, the poor merely complain because they simply don't appreciate "how hard [the rich] worked for it." But perhaps, just perhaps there's a condition we could call "affluent amnesia" where a person is likely to forget (or care about) how the choices they make affect the rest of the world around them once they make enough $$$, all in the name of convenience & perceived entitlement.

Possibly, maybe? L'il bit? L'il bit?

SUVs are great for the family due to their 3rd row seating config!

The larger the SUV the more interior room. So for instance the Cadillac Escalade, Nissan Armada, and Toyota Sequoia all have adequate leg room.

But the smaller midsized SUVs like the highlander have terrible leg room.

Eileen Schwab

I have a '96 4WD Tahoe that gets bad mileage. I also live two miles from my work. It's 17 years old and has 78,000 miles on it and always passes the emissions tests with flying colors. Say you have a half-hour commute to work in your Prius or whatever- who's leaving a bigger carbon footprint?
BTW I'd get a Yukon hybrid in a flash, but don't have the $$ for a new car right now.

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