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Americans Show Less Interest in Buying SUVs, Report Says

August 13, 2004|From Reuters

U.S. motorists have recently been shying away from buying fuel-thirsty sport utility vehicles, an industry research firm said Thursday.

Power Information Network, an affiliate of J.D. Power & Associates, cited rising gasoline prices and a renewed emphasis by some manufacturers on their car models as factors contributing to what might become a worrisome trend for Detroit's Big Three automakers.

The Power report said unsold SUVs had sat on dealership lots for an average of 73 days as of last month, 7.4% longer than the "days to turn" rate for SUVs in June and 22% longer than the average in July 2003.

The days-to-turn rate for luxury SUVs jumped 47% from a year earlier to 50 days, the report said.

Also pointing to weakness in the SUV sector, the report said, was a 2% decline in the average SUV selling price in July from a year earlier. In the same period, the average price of all new vehicles rose 0.4%. Luxury SUV prices were nearly 5% lower.

Many Americans have long considered SUVs the kings of the road, making them their preferred choice of vehicle despite generally poor mileage and a higher rollover risk compared with cars.

Buyer incentives on SUVs averaged $3,440 in July, the report said, up nearly 12% from June. Industrywide, incentives on cars and trucks rose 6.6% to an average of $2,867.

General Motors Corp., Ford Motor Co. and DaimlerChrysler's Chrysler division all make a major share of their automotive earnings from sales of pickup trucks and truck-based SUVs.

But Tom Libby, the senior director of industry analysis at Power Information Network, said it was too soon to say America's long love affair with SUVs is finally on the rocks.

"You have to wait and see if indeed there is a major softening or if this is just sort of a blip," Libby said.

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