The SUV Blues, Baby

Discussion in 'Economy' started by Orange_Juice, Aug 13, 2008.

  1. Orange_Juice
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    Orange_Juice Senior Member

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    DETROIT — The market for sport utility vehicles is starting to look a lot like the housing market, spreading pain to consumers, automakers and dealers.

    Even the vocabulary is sadly familiar. Bloated inventories? Days spent on the market?

    Well, in July, General Motors dealers had a 174-day supply of the Yukon XL/Suburban on hand, on average, up from a 92-day supply a year earlier. Inventory of the Chevrolet C/K Suburban nearly doubled over the same period, to 116 days from 63 days.

    Just like hapless homeowners, countless car owners are now “underwater,” driving vehicles that are worth less than the balance on their car loans. And just like desperate homeowners, the sellers of S.U.V.’s are having to painfully cut asking prices.

    For instance, Michael Kohan, a recent graduate of Hofstra University’s law school, decided that hundreds of dollars a month filling up his 2006 Land Rover LR3 would be better spent paying down his student loans. He calculated that his vehicle — loaded with luxuries like a navigation system, xenon lights, parking assist sensors, heated leather seats and three sunroofs — should be worth at least $31,000, according to the Kelley Blue Book.

    But with a V-8 engine that gets only about 14 miles per gallon, Mr. Kohan, 24, decided to list his LR3 on eBay and Craigslist for $18,000. And yet, he told a reporter this week, “As low as I set the price, you’re the first person to call.”

    Dealers are going through the same pain, only multiplied. They normally spend this time of year raking in some of their biggest profits and breathlessly promoting Detroit’s newest models. Instead, they almost cannot give S.U.V.’s away.

    “There’s never been discounts this big before on them, but people are still shying away,” said Kevin Fortman, a sales manager at Wolf Chevrolet in Naperville, Ill.

    Mr. Fortman said his dealership had dozens more sport utility vehicles left from the 2008 model year than it needed, even as factories began rolling out newer versions. “We’re not going to order any ’09s for a while,” he said.

    Automakers are offering discounts of $10,000 or more on some S.U.V.’s just to get rid of them, so dealers have space to stock more of the fuel-efficient cars consumers are clamoring for. On average, new sport utility vehicles sold for 20 percent below sticker price in July, according to Edmunds.com, a Web site that gives car-buying advice to consumers.

    http://www.nytimes.com/2008/08/13/b...=th&adxnnlx=1218632784-0F72pPsB3FzAhJbBwp1AWQ
     
  2. Zoomie1980
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    Zoomie1980 Senior Member

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    That's the market working the way the market is supposed to work. It did not take government mandates to get the auto companies to stop making so many trucks and SUVs, it was the American MARKET! When we hit about $3.75 or so we hit the pain threshold, after which Americans finally made a substantive change in their driving and purchase habits. You can't find a hybrid on a lot now. Think they might make more of those next year? More small cars? Some new Electrics? They just might.....
     
  3. busara
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    busara wanasiasa wapumbava

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    as more leases for SUV's expire, the large amount of unwanted SUV's will rise even further.
     
  4. wihosa
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    wihosa VIP Member

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    Yeah, good luck selling yours for anything close to what you owe on it.

    Oh well, you can always borrow another $40,000 against your home to get something more fuel efficient, er, well, maybe not, now that tour home is worth 20% less that it was 2 years ago.
     
  5. CA95380
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    CA95380 USMB Member

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    This is when it started, back in June ....

    Business - Soaring gas prices drive down sales of SUVs - sacbee.com

    This weekend they are still trying to dump some of them with huge televsision ads, and bigger rebates! Next month they will be including in a "CALIFORNIA FORECLOSED HOME" with each new SUV you buy! :eusa_shifty:
     
  6. editec
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    editec Mr. Forgot-it-All

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    Now that was pretty damned funny.

    I love gallows humor.
     
  7. Zoomie1980
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    Zoomie1980 Senior Member

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    Well it makes sense they will advertise to sell the things they are having a hard time moving. No sense to spend money to sell things that sell by themselves. Kind of surprised to see the Volt ads for the 2010 model year already. GM's attempt at PR I guess to show the market they are indeed thinking forward. They need an entire line of electrics, though including a small SUV.

    SUV's WILL sell, but only hybrid and 100% electric models. My next vehicle will be a 100% electric, preferably a small SUV model.
     
  8. Chris
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    Chris Gold Member

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    The nice thing is that all the people who have lost their homes, can move into their SUV.
     

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