NYT: U.S. Makers Facing Glut of S.U.V.'s as Gas Rises

[DeepModem Mom]

U.S. Makers Facing Glut of S.U.V.'s as Gas Rises
By JEREMY W. PETERS
Published: May 3, 2006

DETROIT, May 2 — Americans shied away from large sport utility vehicles and pickup trucks in April as gas prices approached $3 a gallon. With a battery of new S.U.V.'s waiting in the wings, domestic automakers are now facing the very situation they had hoped to avoid.

Despite gains at Toyota and Honda, declines at General Motors, Ford, DaimlerChrysler and Nissan kept vehicle sales in the United States flat in April, according to Ward's AutoInfoBank. General Motors recorded the biggest drop, selling 7.3 percent fewer vehicles than it did last April.

For the first time, Toyota became the nation's No. 3 car seller for the month, passing DaimlerChrysler. That marks a symbolic victory for Toyota, which occasionally outsells the Chrysler division but had never before outsold all of DaimlerChrysler in the United States.

The latest surge in gas prices poses a long-term problem for the domestic auto companies, which had been hoping that gas prices would moderate and make S.U.V. sales easier. Now, analysts warn it may be harder to get consumers to buy a gas-thirsty vehicle when the oil market remains so volatile.

"Last fall when we had this first spike, then people could write it off as a one-time deal," said Stephen J. Hoch, a professor of marketing at the Wharton School of the University of Pennsylvania. "The fact that it spikes twice means it can spike again. Now, this time people will say there's enough evidence that this is going to be a recurring if not frequent phenomenon."...

http://www.nytimes.com/2006/05/03/automobiles/03auto.html

[cspanlovr]

1. Auto makers must be in shock...

who could have ever predicted high gas prices?

[Cassandra]

2. Didn't the auto makers pay Bush enough...

to keep the gas prices down? I guess they were outbid.

[KittyWampus]

3. but I just read that Hummer sales were up 231%. Guess they aren't SUV's?

[Media_Lies_Daily]

4. Think about who can afford to buy them....price of gas is nothing to them.

[niallmac]

5. Rich person SUVs.n/t

[rinsd]

8. Its a mixed bag though the overall trend is a sales decline....

Reading the article, some older models like the Explorer have taken a hit and the share of the overall market has dipped a little. But new SUVs(the humungous ones much like the Hummers) from GM are selling well right now.

"For now, G.M.'s new S.U.V.'s are selling well. Last month, the company said sales of its Yukon and Tahoe were up more than 30 percent. Escalade sales jumped 127 percent."

[CAG]

6. OMG... these guys can't be this dumb.... can they?? I mean, geez,

they make millions of dollars to run their huge US auto corporations, and they all sound f$%@in clueless.

[BR_Parkway]

7. Wonder what they were thinking 18 months ago as gas kept heading higher

[corporate_mike]

9. April hybrid sales (by make/model)

[amandabeech]

10. Ford's hybrid Escape and its Mercury clone are doing well.

Ford got on the hybrid bandwagon early enough to leave GM in the dust. IMHO, Ford should get credit for this.

And no, Ford did not just wholesale license Toyota tech. Ford developed its hybrid tech in its own engineering labs, but some of its tech turned out to be close to what Toyota developed. In order to protect itself against patent infringement claims from Toyota, Ford entered into a cross-licensing agreement with Toyota. Ford obtained a license on some hybrid tech while Toyota obtained licenses on some Ford diesel tech. Toyota has confirmed this situation.

[onager]

11. Bill Ford probably had something to do with that

Or to use his full name: William Clay Ford, Jr., President/CEO of Ford Motor Co.

In the motorhead press over the past few years, there have been quite a few articles about Bill Ford fighting his own executives for stuff like hybrids and better environmental performance. Some disgruntled execs have been known to fling around terms like "tree-hugger" and "environmentalist wacko" to describe their boss, though probably not within his hearing.

He's known for being serious about this, not just paying lip service to the idea for the press.

This was even mentioned in that humongous 2003 "anniversary" history of the company, IIRC. I halfway expected a whitewash, since the Fords commissioned the book. But it had a lot of their Bad History in it--old Henry Ford's crazy anti-Semitism, Harry Bennett, "the battle of the bridge," etc.

Even the story of how Henry Ford II put up with a boycott of Ford products for almost 20 years in the Middle East. That came about because Ford II heard that Israel needed trucks during the 1973 Yom Kippur War. Ford II literally stripped Ford factories of trucks rolling off the assembly lines, and put them on airplanes headed for Israel.

My favorite anecdote in the book, and one very relevant today:

One time a Ford executive conducted a plant tour for the famous UAW leader Walter Reuther.

The exec REALLY wanted to show off Ford's new robots in the assembly plant.

"Just look at that, Mr. Reuther! Not one of those robots will ever take a day off sick or go on strike."

"Yes," Reuther replied. "And not one of those robots will ever buy a Ford."

[amandabeech]

12. I'm from Michigan originally,

but your post contains new info.

Everything I've read about the current Ford is very positive. With him at the helm, I'm inclined to say that Ford will do better long term than GM.

The Reuther anecdote is terrific. And painfully true. It's as though the executive in question was completely ignorant of Henry Ford's quip about paying autoworkers enough that they can buy one of the autos that they were building.

I wonder if the low-wage countries will ever arrive at the same conclusions as Ford and Reuther.