Why the Death of S.U.V.'s?

INSERT DESCRIPTIONPhoto: Andy Manis for The New York Times

The car companies can barely give away an S.U.V. these days. The latest evidence of this comes in the form of three more closings of factories making S.U.V.’s. According to that New York Times article, S.U.V. sales plunged by more than 40 percent this year, compared to a 16 percent decline for new vehicles overall.

Here is the puzzling thing. The apparent cause of death for S.U.V.’s was high gas prices. Doesn’t that mean that with low gas prices S.U.V. sales should come back to life?

I can think of a few reasons why that might not be the case:

1) Consumers think that the low current gas prices are temporary, and in general gas prices will be high in the future. Thus, they don’t want to get stuck with a vehicle that gets poor gas mileage. The question this raises is why consumers were so sure six months ago that gas prices were going to be high forever (which turned out to be wrong), but don’t believe now that gas prices will stay low.

2) The uncertainty of fluctuating gas prices takes the fun out of owning an S.U.V. Even if gas prices won’t be that high on average, it is so unpleasant to have an S.U.V. when gas prices are high that people don’t want to have them if gas prices are volatile. This explanation seems kind of dumb to me, but maybe it is possible.

3) When gas prices got high, it became uncool to own an S.U.V. Perhaps the process for going from cool to uncool is not easily reversible. Once something is uncool, it remains uncool for a long time, even when the forces that caused it to be uncool recede.

This might explain why the demand for pickup trucks remains strong, even as S.U.V.’s fade. Somehow the spike in gas prices didn’t make pickup trucks uncool in the same way as S.U.V.’s. Similarly, minivans have never been cool (or at least not for a long time); so if this explanation is right, minivan sales should stay strong.

My guess is that the third explanation is the most important of the three.

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  1. Jim Farmer says:

    I vote for #3. Car sales are more about keeping up with the Jonese, IMO, than practicality.

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  2. Michael says:

    Agree with #3. Now get street cred for my Camry Hybrid. A year ago I got derision for spending extra for the hybrid feature.

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  3. RB says:

    Spikes in gas prices didn’t make pickup trucks “uncool” because many people need pickup trucks for their jobs. Minivans and crossovers offer some close substitutes for SUVs, but there is really no close substitute for a pickup truck.

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  4. Nina says:

    AS a poor-ish person, I vote 1 and 2. I cant afford to have such a neccessary part of my budget wildly fluctuate. The difference between 1.70/gallon gas and 4.40/gallon gas is enough to completely destroy my montly budget and really really hurt me. I’d rather have a car I KNOW I can afford to drive, rather than take chances going thru THAT again. Fool me once shame on me…. I’d be a fool to get lulled into a false sense of security, then again find myself scrimping to pay for gas just to be able to get to work.

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  5. Raj Naga says:

    Did it occur to you that people buy pickup trucks because they actually need pickup trucks, whilst people buy (better: bought) SUVs because they were popular. People but different type of vehicles for different reasons.

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  6. Paul says:

    Some people have a legitimate work or business reason to own a pickup truck. The SUV was always more about status and ego than practicality — though some people always tried to tell you differently.

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  7. Louis Anthes says:

    So, in other words, rather than making rational decisions based on the inevitable long-term rise in gas prices, the increasing confrontation with climate change in our daily lives, and the fact that SUVs are an indulgent, wasteful consumption of natural resources in general — people choose to spend $40K because it’s not “cool.”

    “Coolness” is the ultimate indulgence of the baby boomers — read Thomas Frank, Christopher Lasch, and Jackson Lears.

    “Coolness” is the grease of confidence men and the lingua franca of the powerful.

    It is the virus killing the Earth.

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  8. Kara says:

    It’s not just about gas prices or being uncool. Americans are finally becoming aware of how their actions are affecting the climate crisis. I was worried that the green movement is just a temporary trend, but now I’m hopeful that it will continue.

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