Are We In The Age Of The SUV

April 12, 2002
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Conventional wisdom has held for sometime now that big cars are bad in that they pollute the environment and, because they use so much fuel, they also threaten national energy independence.

Be that as it may, the McCain-Kerry proposal to jack Corporate Fuel Economy standards to 35 miles per gallon crashed and burned in the U.S. Senate last month 62-38. Firing heat-seekers at the proposal were the UAW and Big Three automakers during one of their moments of utter solidarity.

So why did the Detroit special interest carry so much weight?

Perhaps it's because John Q thinks, despite all the doom-saying about carbon dioxide and global warming, that the environment seems to be in better shape now than it has been for years, and that expensive catalytic converters will keep it so.

Or, maybe, it's just that the auto-buying public has made it clear to the nation's showrooms what kind of vehicles it wants.

And what the public wants seems to be vans, some form of SUV or pick-up trucks.

Taken together, such vehicles now make up 51 percent of the private passenger vehicles on the road. And that message seems to have resonated strongly with the organizers of the International Auto Show in New York.

By all accounts, the exhibits at the Javits Center two weeks ago leaned very heavily toward SUVs.

More than 300 SUV models from all over the world were on exhibit: modest-sized ones from Japan, mid-sized and large ones from Europe, and behemoths from Detroit.

About the only SUV that was smaller this year was the Hummer H-2, which is a few inches narrower so that its drivers can negotiate bank drive-up lanes that the military version just couldn't fit before. The Hummer, incidentally, was a relative rarity among American SUVs at the show in that it generates slightly under 200 hp.

Most of the Detroit horsepower numbers were well above 200 and a number of the big ones exceeded the 300 mark.

Among them, for instance, was Lincoln showing off its new Aviator, a plush version of the Ford Explorer with a 302 hp V-8.

Even Honda, which ordinarily indulges in self-congratulations for its fuel-efficient cars, was showing off its new Pilot, which looks like a downsized mimic of the Acura MDX.

The Pilot has a 240hp V-6 that will guzzle what for Honda is a high 24 miles to the gallon on the highway.

Not that anyone who drives would doubt it, but the industry last year sold almost 4 million SUVs of one kind or another — nearly a fourth of all its sales.

That sales figure — in what was supposed to be a recession year — was up 12.5 percent from year 2000.

The SUV component seems to be the most rapidly growing segment of the automotive market. One thing is clear: More is on the way — much more.

Europe apparently wants to play catch-up with Detroit. Porsche's new Cayenne SUV, due out later this year or early next, reportedly will offer a twin-turbo V-8 generating 444 hp.

Meanwhile, Mercedes-Benz is reportedly countering with an ML55 with its own V-8 producing more than 400hp.

With those monsters on the horizon, does it seem likely that Cadillac will let its 345 hp Escalade roll over and die in 2003?

If auto sales last month were any indication (see separate article) the conflict in the Mid-East and the spike it has caused in oil and gasoline prices may have cause a brief dip in auto-buying confidence.

But if Saddam Hussein's promise of a 30-day oil embargo rattled people, one of Saudi Arabia's princes made it reassuringly clear that they won't play Saddam's game. His huge family is eager to sell all the oil it can.

Moreover, the Russians have made it clear, too, that for now they will not cooperate with OPEC. The Russian economy is recovering nicely from its post-Soviet disruptions, but Moscow still needs hard currency from oil sales.

Aside from Saudi and Russian assurances, what seems to give the auto industry heart is last month's national E-Poll consumer survey that indicated about 40 percent of consumers plan to buy or lease a new vehicle this year.

That is precisely what the survey found just before the Sept. 11 attack.

Moreover, three in four of the people surveyed (and this was before the emergence of optimistic March and April economic numbers) indicated they were not planning to delay the purchase or lease of a vehicle due to the economy.

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