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Cynthetiq · 06-08-2008, 08:21 AM

Quote:

Originally Posted by BadNick

It seems that this gasoline price situation will at least have a positive impact on our environment, forcing manufacturers to offer much more efficient vehicles, and cleaner burning as well.

I also always wondered why so many people seemed to choose behemouth, inefficient SUV's and trucks when they didn't seem to really need the space or hauling capacity. So now it seems that the soaring price of gasoline here is making them reconsider their choices, whereas concern for our environment and efficiency didn't do that.

You may have seen the article in today's NY Times about the newest Honda Pilot SUV. Surveys told Honda that the consumers wanted it to look more SUV'ish and with a stronger image, so the newest one was redesigned in that regard. So now they are concerned that considering the current mentality of auto consumers this new image will backfire and adversely impact sales...even though the new one is more efficient than the old one with its V6 that can automatically drop to operation on 4 or even 3 cylinders to improve economy.

People may not necessairly do so.

Quote:

Fuel economy is improved compared with the old Pilot, despite the new model’s being larger and heavier. The two-wheel drive version is rated at 17 miles a gallon in town and 23 highway. The all-wheel drive version is rated at 16/22.

I believe it is simple economics. People need the space that is provided, 2 adults, 2 kids, and the dog don't fit in a Pruis all that well. There's a similar article about minvans...

Quote:

View: Minivan sales could hit 22-year low as gas prices, image problems take their toll
Source: Startribune
posted with the TFP thread generator

Minivan sales could hit 22-year low as gas prices, image problems take their toll
Minivan sales could hit 22-year low as gas prices, image problems take their toll
By DEE-ANN DURBIN , Associated Press

June 6, 2008

DETROIT - Asked recently how the U.S. minivan market has been faring, Nissan's Dominique Thormann had a concise answer.

"It collapsed," said Thormann, a senior vice president of Nissan North America.

While the rapid decline in pickup and sport utility sales has been grabbing the headlines, minivan sales have also taken a tumble, falling 20 percent in the first five months of this year.

And unlike trucks, which could rebound once the construction industry picks up, it's unclear if minivans have a future in the U.S. market or if they're being killed off by crossovers and the stodgy taint of the soccer mom image.

"The future of the segment is up in the air," said Tom Libby, senior director of industry analysis for the Power Information Network, a division of J.D. Power and Associates. Libby said the advantages of minivans — the sliding doors and height — has been eroded by the negative image of minivans and consumer preference for SUV-like styling.

The slump reflects what's going on in the wider U.S. market. Overall auto sales were down 8 percent through May, and big vehicles like minivans took the brunt of it because of high gas prices. Large pickup truck sales fell 21 percent, while large SUVs were down 32 percent.

It doesn't help that families — minivans' target audience — have been particularly impacted by rising gas and food prices, falling home values and more difficulty in borrowing money, said Rebecca Lindland, an auto analyst for the Waltham, Mass.-based consulting company Global Insight.

"Everything that a family needs is more expensive right now, and so the last thing they're looking at is do they need to replace their Honda Odyssey," she said.

But even before the economy took its toll, families were migrating away from minivans. U.S. minivan sales peaked at 1.37 million in 2000, 17 years after Chrysler introduced them. They've been falling at a steady rate since then, to 793,335 last year. This year, sales are expected to fall below 650,000 for the first time since 1986.

One reason is the rise of crossovers, which offer similar space but more car-like handling. In March through May of 2004, 12 percent of minivan owners trading in their vehicles bought a crossover. That rose to 26 percent in the same period this year, according to the Power Information Network. Crossovers accounted for just 4 percent of the U.S. market in 2000; they now account for 19 percent.

Another reason for minivans' decline is that some players have left the market. General Motors Corp. will stop making minivans by the end of this year, while Ford Motor Co. quit producing the Ford Freestar and Mercury Monterey in 2006.

Thormann said Nissan has no plans to exit the market for now, despite a 34 percent drop in sales of the Nissan Quest so far this year. Thormann said that first, Nissan needs to figure out where large SUV buyers are going and whether they will choose to downsize to minivans.

"The fact is that the minivan hit a particular need. Then, that same need was satisfied — because fuel was cheap, because affordability was high — with an SUV," he said. "But once you're stuck up there and you're thinking, 'Oh, wait a minute, do I need to be a little bit more rational and do I need to come down a notch without sacrificing much utility?' Does the minivan become an alternative to that or is it the crossover?"

Perhaps the biggest gamble in the shrinking market was made by Chrysler LLC, which spent $1.4 billion on the redesign of its two industry-leading minivans, the Chrysler Town & Country and Dodge Grand Caravan. Despite the investment and new features such as swiveling seats, Caravan sales fell 35 percent through May. Town & Country sales were down 13 percent.

Chrysler remains bullish on minivans and says sales have dropped for several reasons. First, the company discontinued the cheaper, short wheelbase version of the Caravan because it couldn't accommodate the new features, a decision that priced some buyers out of the market. The 2007 Dodge Caravan had a suggested retail price of $19,055; the 2008 Grand Caravan starts at $21,930.

Chrysler also says it significantly cut the low-profit sales it used to make to rental, corporate and other fleets. Non-fleet sales were up 23 percent this spring, the company says, and many buyers are choosing options like backseat televisions that improve Chrysler's margins.

"What is left is good quality consumer business and we are right-sized for the market," Chrysler spokesman Stuart Schorr said.

But Chrysler needs to watch its back, as rivals Toyota Motor Corp. and Honda Motor Co. are gaining on it. Chrysler continues to control 30 percent of the minivan market, but that's down from 32 percent in the first five months of 2007, and both the Honda Odyssey and Toyota Sienna have made larger market share gains than Chrysler's minivans this year.

Lindland said it turned out to be an awkward time to discontinue the lower-priced option, but Chrysler couldn't have predicted the rapid run-up in gas prices. The Dodge Grand Caravan gets an average of 18 miles per gallon, according to government statistics. The 2009 Dodge Journey crossover, which is meant to replace the short wheelbase minivan, gets 21 miles per gallon.

Still, Lindland is also bullish about minivans. Global Insight predicts U.S. minivan sales will settle in at around 650,000 through 2012, when they could jump back up to 700,000 as the market improves. She said demographics are working in the vehicles' favor, as Generation Y starts having families and Baby Boomers circle back to minivans to transport their grandchildren.

"I don't think the segment is going away entirely. It's reorganizing itself," she said.

Yesterday we took a cab back from JFK to NYC. It was a Ford Escape Hybrid. The engine sounded like it was overworking as we were driving over the normal rolling hills and overpasses. I don't think that the premium for hybrid vehicles outweighs the amount of fuel that can be purchased in the lifetime of the vehicle.