| January 2nd, 2009 by admin |
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Decline Of The SUV
Decline Of The SUV
Sports utility vehicles have enjoyed a good run; they burst onto the scene years ago. Soccer moms loved the extra space and guys enjoyed having more girth and horsepower than any driver can reasonably use. Over the past year, the death knell of the SUV has begun to ring, instigated by rising gasoline prices. Most automotive insiders are predicting that the large gas-guzzlers are poised to become the auto industry’s Tyrannosaurus Rex: powerful, ferocious, and on the cusp of extinction.
Below, we’re going to take a tour of the erstwhile sports utility vehicles. I’m going to explain the challenges that manufacturers have had to contend with in the face of rising fuel prices. I’ll also mention a few notables that deserve a moment of silence to mourn their eventual passing.
Gasoline, Oil, And Automakers
At its simplest level, this sector of the industry was buffeted by two primary dynamics. First, according to the brains at economic think tanks, the U.S. officially entered a recession in December of 2007. Second, barrels of oil started to command high prices; around that time, the price of gasoline began flirting with $4. For motorists who had invested a large chunk of their money in Ford Expeditions, H2 Hummers, and other SUVs, those two dynamics represented a major problem.
Frankly, it’s hard to justify spending $70 to fill your tank only to drive yourself to and from a job that you may lose the following week. What’s worse, that $70 doesn’t last long since your fuel-sucking beast of a vehicle only gets 10 to 14 miles per gallon. In short, SUV owners started to get squeezed.
Predictably, sales of sports utility vehicles have plummeted this year. That creates a potentially disastrous problem for automakers; if they can’t sell their inventory, they can’t generate cash flow. Without the cash flow, they can’t operate. Eventually, they find themselves in Washington, hats in hand, asking for a multi-billion dollar bailout.
Honorable Mentions
SUVs aren’t likely to stage a major comeback anytime soon. The automakers have already begun dismantling the platforms they used to produce them. Meanwhile, the trend toward greener fuel options represent another nail in the gas-guzzlers’ coffin. So, before we part today, let’s take a moment to recognize the passing of a few notable SUVs.
The H2 and H3 Hummers were never shy about their ability to consume fuel faster than their brethren. The Ford Expedition was slightly less “manly,” but afforded families enough room to avoid sibling wars in the back seat. Finally, the Jeep Grand Cherokee makes the list of notables because of its popularity. It may not boast the fuel-guzzling prowess of the Hummer and Expedition, but it remains one of the most recognizable SUVs on the road.
Here’s to their long-time record of service. May each of them rest in peace.
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