At the height of the U.S. economic crisis, one of the most potent symbols of American excess was the gas-guzzling sport utility vehicle. When oil prices spiked and millions of Americans lost their jobs, sales of big trucks collapsed, taking General Motors, Chrysler and nearly Ford with them. Only small cars would have a future in this more frugal, sensible economy, we were told. Well, so much for that.
The SUV is back, and American drivers can’t get enough of them. According to Ford, sales of the Expedition jumped 45 per cent in December, while the Lincoln Navigator was up 60 per cent. GM, meanwhile, has announced plans to spend US$1 billion revitalizing its lineup of full-size pickups. The companies are still heavily focused on smaller, fuel-efficient vehicles, and the next generation of SUVs will undoubtedly do better on gas. But any notion that the SUV would go the way of the Model T is gone.
One problem with the love-in for electric cars and other fuel-sippers is that they’re awful for the bottom line. In some cases, they’re built at a loss, compared to profitable SUVs. But it also appears that the willingness of Americans to give up their 4 x 4s, even if it’s only to go to the corner store, was seriously misjudged. “Some people still hold that the future will be in small cars, but I’m not sold on that,” says George Augustaitis, a Detroit-based automotive analyst with CSM Worldwide. “If people have the disposable income to buy and afford a large vehicle, they’ll do it.” He adds the only way SUVs might seriously disappear is if gas prices remained above $6 a gallon ($2.50 per litre) for a long period of time.
Of course, this move back to manufacturing trucks flies in the face of the U.S. government’s push for smaller vehicles, especially since U.S. taxpayers own 60 per cent of GM. (Canadian taxpayers own another 12 per cent.) But if GM hopes to remain viable, it will have to be ready to make the types of vehicles people want to buy—and right now, that’s once again hulking SUVs.