The Homa Files

Excerpted from Business Week, “The SUV Is Rising from the Dead”, November 26, 2008

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Americans are downsizing to the smallest vehicle they can tolerate. But in many cases, that’s just another kind of SUV—one that gets about 22 mpg

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When gasoline blew past $4 a gallon in July, pundits declared the era of the gas-guzzling sport-utility vehicle over.

Since then, of course, prices have dropped 50%, and …  more visitors to the Edmunds.comsite are researching SUVs … and appear to be ‘cycling back to our ‘bad’ car-buying habits.”

It’s more complicated than that. Americans are downsizing to the smallest vehicle they can tolerate.

But in many cases, that’s just another kind of SUV—one that gets about 22 mpg. That’s more eco-friendly than a Hummer, but this is hardly the era of conservation that some had predicted.

Gas-electric hybrids, which typically cost at least 15% more than conventional cars with similar mileage, are a tougher sell than they were just three months ago.

According to Edmunds, the number of people intending to buy a hybrid has been declining along with the fall in fuel prices. When gasoline prices peaked in July, 700,000 visitors to Edmunds.com checked out hybrid cars. But in October, only about 150,000 did so.

Meanwhile, J.D. Power & Associates (MHP) says that 36% of people who traded in large SUVs in November turned right around and bought another one.

“Consumers tell us they don’t want a small car.They want something roomy (to haul kids and cargo) and more fuel-efficient.”

Full article:
http://www.businessweek.com/magazine/content/08_49/b4111063900772.htm 

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This entry was posted on December 12, 2008 at 7:52 am and is filed under Autos - Travel, Environment - Green. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.