Orange_Juice
Senior Member
- Jul 24, 2008
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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 Universitys 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, youre 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 Detroits newest models. Instead, they almost cannot give S.U.V.s away.
Theres 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. Were 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
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 Universitys 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, youre 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 Detroits newest models. Instead, they almost cannot give S.U.V.s away.
Theres 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. Were 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
