Falling SUV Prices Squeeze Automakers' Profits - Reuters

[hatrack]

DETROIT - "Soaring incentives on sport utility vehicles have depressed prices and squeezed profits from a critical segment of the U.S. market, hitting Detroit automakers especially hard. Adding to the bleak outlook for the manufacturers of traditional SUVs is the fact that many consumers have grown tired of their truck-like ride, and rising gasoline prices also give buyers a reason to consider a different vehicle.

The average price paid for SUVs, including incentives, fell in the third quarter this year, while unsold SUVs sit on dealer lots longer, according to data from the Power Information Network, an affiliate of J.D. Power and Associates. Sales incentives across the industry have risen by 25 percent this year to an average of $4,667 for full-size SUVs and $4,203 for mid-size SUVs, according to industry tracking firm Autodata.

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The trend is particularly troublesome for General Motors Corp. and Ford Motor Co., whose SUV lineups are aging and who dominate the full- and mid-size SUV market. Traditional SUVs, built on a truck frame, have lost out to new entries, such as the Chrysler 300 sedan, and the growing number of crossovers with car-like ride and gas mileage but the roominess of an SUV.

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Ford's SUV sales have fallen sharply this year, including double-digit drops in sales of its large Expedition and Excursion SUVs.

Full-size SUVs sat unsold at dealerships for an average of 87 days in the third quarter, up from 68 days in the third quarter last year. The "days to turn" was nearly the same for mid-size SUVs - 90 days vs. 70 days a year earlier. "People are having second thoughts about buying trucks, even in Texas," said one analyst, who declined to be named. "The natural level of sales are wanting to slow, but GM isn't letting it. It's where they make all their money." Rather than let its sales slip, GM has pushed its incentives higher, forcing the industry to follow or lose market share."

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http://www.planetark.com/dailynewsstory.cfm/newsid/27744/story.htm

[RaleighNCDUer]

1. NOW will they stop making the damn things? eom

[amber dog democrat]

2. This makes me feel all the better about my 1998 Honda Civic

which has been paid for for years. :)