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SUVs Meet the New Fuel Crunch

Automakers are downsizing sport-utility vehicles—and facing the oil crunch—with crossover rides that have drivers wondering, "Do I really need a truck?"
Paul A. Eisenstein
From the Print Edition:
Antonio Banderas, Nov/Dec 2005

Shelly and Jim Hopper have had a crude awakening. It was when they saw the numbers on the local gas pump start to spin like the reels on a slot machine every time they went to fill their SUV that reality set in for the young Michigan couple. The Hoppers had traded their sports car for a sport-utility vehicle a few years back when they arrived in Michigan from Florida.

Their new Nissan Xterra seemed better suited to Michiganís rough winters and abundant off-road trails. It also seemed safer with all that snow and ice theyíd be facing. "But the thing I liked best," Shelly recalls with a laugh, "was the way it looked." Things looked different for her when the rising cost of crude oil sent the price at the pump inching toward $3 a gallon. She realized that "the gas money was outrageous and the lease was too expensive, and itís not like we went off-road all the time."

So the suburban Detroit couple recently traded in their big SUV on something a bit smaller and markedly more fuel-efficient. Looking a lot like a station wagon on steroids, their ë05 Chrysler Pacifica still boasts many of the advantages that originally sold the Hoppers on their old ute, including all-wheel drive and the higher "command"

Is this what Yogi Berra once described as "déjà vu all over again"? In the days before the oil crunch of 1979, Americans drove full-size sedans and family station wagons. Then gasoline prices soared to record levels and long lines formed at the gas stations, sending Americans by the millions scurrying to dealers to trade in their big gas-guzzlers on more fuel-efficient econoboxes. But the price of gas eventually dropped against the inflated dollar and motorists gravitated to the largest vehicles they could buy—this time they were pickups, minivans and SUVs—especially SUVs. Oversized rides came to dominate the market, accounting for more than half of all motor vehicle sales.

But with fuel prices soaring into the $3-a-gallon range, many analysts suspect we're about to see Americans abandon their behemoths again. Indeed, but for a brief summer respite, when the Big Three U.S. automakers launched an aggressive price war, SUV sales have been slipping this year. Another trend might be compounding the situation: recent research suggests that consumers may simply be tiring of the rugged vehicles, regardless of fuel prices.

Don't expect to see conventional passenger cars regain dominance in the U.S. market, however. Even as the SUV boom is beginning to bust, buyers are checking out a new generation of ute-like "crossover" vehicles, such as the Pacifica, and other car-based products almost impossible to categorize.

Off-road Warriors and Soccer Moms
It wasn't all that long ago that if someone mentioned "light truck," you'd likely picture a no-nonsense workhorse bought to haul wood, carry tools or traverse tough terrain. But something happened in the late 1980s. Affluent Boomers began trading in their sedans and coupes and driving sport-utility vehicles and pickup trucks as their everyday rides. Today, you're just as likely to see a Jeep as a Jaguar parked in front of a fancy boutique on Beverly Hills' fashionable Rodeo Drive.

Exactly what triggered the switch is a matter of much debate. Some suggest that the sport-utility vehicle is the natural evolution of the classic American station wagon. It's certainly a more fashionable alternative—and more functional, thanks to such features as all-wheel drive. Meanwhile, today's utes are a lot more comfortable and car-like than the rugged Jeeps first made famous in the Bill Mauldin "Willy and Joe" cartoons from the Second World War.

Yet that image of wartime invincibility has also been a strong card for SUVs. "When I'm in this thing, it feels like absolutely nothing in the world can stop me," says Eric Edelstein, as he maneuvers a new Land Rover LR3 down Detroit's busy Woodward Avenue. Ironically, in the late 1990s, sport-utes came under attack for being a bit too invincible, if you will. Critics contended that utes were unacceptably deadly to passengers of smaller vehicles they might collide with. But the advantage that SUVs enjoyed in a car-versus-truck run-in only encouraged more car owners to trade in. Then the introduction of three-row seating made roomy SUVs even more appealing. The so-called "soccer moms" hoping to sidestep the stigma that comes with driving a minivan began showing up to practice with half the team packed in an SUV.

Curiously, the SUV has benefited from forces that might have been intended to work against it. Consider federal rules meant to encourage motorists to downsize their vehicles to improve fuel economy. The Corporate Average Fuel Economy rule sets a standard that every manufacturer must meet. It's a complex formula, but essentially it balances out the average mileage of each vehicle an automaker sells, dividing the vehicle population into two distinct categories: cars and trucks. But the mileage requirement for the latter class—which includes SUVs—has been significantly lower than for traditional sedans, coupes and wagons. Since 1990, products in the passenger car class have had to average 27.5 miles a gallon, but until 2004, trucks needed to average only 20.7 mpg. That jumped to 21.6 on October 1 of this year, and will climb to 22.2 mpg in 2007, but even then, that's a significantly lower hurdle to clear.

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