Still like nothing else

[LasVegas]

They just don't get it. There's still a segment of the population (us) that want to own & drive something rugged, unusual & satisfying for our needs. See last paragraph. Therefore, it's a limited market so after the initial entry to the market it's bound to slow some. Guess we just stand out among the rest.

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Large SUVs lose luster
Sales drop a concern for makers

Brett Clanton
Detroit News
Jan. 26, 2005 12:00 AM

DETROIT - Sales of hugely profitable full-size sport utility vehicles such as the Chevy Tahoe and Ford Expedition are slowing down after zooming out of showrooms for years.

The cooling of America's love affair with the largest SUVs is a troubling sign for Detroit automakers, which count on the vehicles to prop up their bottom lines.

The typical full-size SUV now takes more than three months to sell - up from a little more than a month in 2002 - despite carrying more than $4,000 in rebates.

"Their time seems to be over," BMW Chief Financial Officer Stefan Krause said. "You don't see huge SUVs here as you would have seen two years ago."

While some analysts and research suggest that U.S. consumers are starting to have their fill of large SUVs, automakers are far from ready to abandon a product segment that still produces nearly 1 million vehicles a year.

"We see that as a segment that probably still has some opportunity in it," said Joe Veltri, director of truck marketing and product planning for DaimlerChrysler AG's Dodge brand, whose 2004 Dodge Durango was one of the few big SUVs to post higher sales last year. But recent sales trends are raising concerns. Sales of large SUVs - a category that includes GMC Yukon, Hummer H2, Ford Expedition and Toyota Sequoia - were down 6 percent last year, with many models posting double-digit declines, according to Autodata Corp.

High gas prices may have deterred some consumers from considering the gas-guzzling rigs, whose fuel economy often rates below 15 mpg on the highway.

But it may also have to do with changing customer preferences, said Stephen Girsky, a leading industry analyst with Morgan Stanley.

"I used to drive a (Lincoln) Navigator. Now I drive a (Cadillac) SRX. Was it a fuel thing? No. I like to be able to park a lot easier. I like the ride better. I like the quieter inside. It's a consumer-taste issue as much as anything."

Consumer-loyalty data from J.D. Power suggest that more big SUV drivers are opting for smaller SUVs. In late 2002, about 56 percent of large SUV owners were replacing their vehicles with another large SUV. But by late 2004, the rate had fallen to 50 percent.

While buyer preferences are always changing, a shift away from SUVs could be devastating for Detroit's automakers.

"It's their biggest fear," Girsky said.

Declining demand led automakers in December to offer an average rebate of $4,179 per large SUV, the highest of all vehicle categories, according to Edmunds.com.

But a lot of the decline can be explained by the lack of new models to choose from in the large SUV category, said Joseph Barker, an analyst with CSM Worldwide, an industry forecaster in Farmington Hills. New products attract buyers, he said, and the large SUV segment has been fairly quiet in recent years. "Some of the traditional players, they're in need of a refresh right now."

But it may not be enough to win back customers who have abandoned large SUVs for smaller SUVs and wagonlike crossover vehicles.

Last year, small SUV sales were up 18.5 percent and crossover sales were up 13 percent, representing the two fastest-growing categories of the U.S. auto industry.

"The market isn't going in the direction of ever-bigger SUVs," Krause said.

Try telling that to Peter Linnemann, an engineer with Detroit Diesel, who would love to supersize his Dodge Durango for a Hummer H2. Ogling the truck at the Detroit Auto Show during an industry preview, Linnemann, 50, said he knows the H2 chugs gas, but loves the adventurous look and brutish size of the $50,000 beast. <HR></BLOCKQUOTE>