Not Your Father's SUV

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Ever driven a good-size passenger car-say, a Pontiac Grand Prix or a Honda Accord-up to a stoplight, and found yourself next to a Lincoln Navigator? Then you know how the Lilliputians felt at their first sight of Gulliver. Bigger has clearly become better for many Americans. We're not talking about a Cadillac or a Buick, but a variety of vehicles all classified as light trucks by the government-sport utility vehicles, jumbo and compact, as well as trucks and minivans.

It's hardly news that the love affair between Americans and sport utilities like the Jeep Cherokee and Ford Explorer has been hot and heavy for the past decade. But now that the leading edge of the baby boom turns 53 this year, can the trend continue as more and more of us add AARP cards to our billfolds? Yes. Forecasters estimate that 49 percent of the new-vehicle market will be light trucks by 2001, overtaking car sales by 2002. "We are getting to be a two-car-per-household nation and people want, and can afford, a combination of vehicles that suits them," says Rich Spitzer, an analyst at Southfield, Michigan-based Polk Company, which specializes in auto industry research.

Last year Americans bought an estimated 7.3 million trucks-sport utilities, minivans, and light trucks-based on monthly estimates of automotive sales. That's an estimated 47 percent of total1998 vehicle sales.

The trend, of course, is led by sport utilities. There were 12.6 million on the road in 1997, according to Polk, versus 7.2 million in 1993. There were 2.2 million personal registrations of sport utilities in 1997-including heavy-duty wagons, full-size vehicles, mini utilities, and sport utilities-compared with just 1.2 million in 1993. In fact, the full growth rate may not show up in the numbers, says Spitzer, who notes that many new vehicles may have the utility of a light truck but be classified as a car. "The latest growth has come from mini SUVs, such as Toyota RAV4, Subaru Forester, and the like, and more are on the way from GM, Ford, and Chrysler. All of them are being built off car platforms like the Dodge Neon and Ford Focus."

Consider Maine as reflective of the national trend. The state saw a 75 percent increase in SUV registrations between 1992 and 1997, according to data collected by the U.S. Census Bureau, which later this year will issue a summary report for all 50 states and the District of Columbia.

There were 71,000 SUVs registered in Maine in 1997, up from 40,000 in 1992. The number of minivans increased 50 percent and the number of pickup trucks rose just 5 percent. Total truck registrations in Maine included 55 percent pickups, 19 percent SUVs, and 12 percent minivans. About 72 percent of all trucks were used for personal transportation, while 27 percent were operated for business, including for-hire use.

The new empty nesters Industry watchers have predicted for years that, when Explorer and Grand Cherokee owners reached their 50s, they would want to trade the height, girth, and rough ride of sport utilities for cushier sedans and sport cars. Not so fast. Some companies believe that in a few years half of all sport utility and minivan buyers are likely to be empty nesters in their 50s.

This crop of aging Americans is much different from their parents. To them, retiring from their current job or profession doesn't mean daily golf games and soap operas, but rather starting a part-time business, renovating houses, and the like. And as part-time grandkid sitters, they want the same kind of kid hauler that their kids have. There's image to think of, as well. Who, after all, really wants to drive a Buick LeSabre to a Rolling Stones' or Eagles reunion concert?

That empty nesters comprise a strong market for sport utilities and minivans is no secret to the industry. General Motors, for example, has a segmented marketing approach to address the quirks of each demographic in the market for a minivan. GM pitches the Chevy Venture to families, the Oldsmobile Silhouette to empty nesters, and the Pontiac Montana to families or couples where a man will be a primary driver.

Not only is demand still strong, but manufacturers are taking in all the information they can get about what buyers will want-more comfort in exchange for less actual off-road capability, for one thing. New entries from Mercedes-Benz and Lexus have far less off-road capabilities than Jeeps or GMCs, and offer easier rides for older behinds. The new Jeep Cherokee, Mercedes M Class, and GMC Denali are all examples of softer riding sport utilities. Companies like Ford, BMW, and Buick are also developing so-called hybrid cars-sport wagons, really-to copy the success of Subaru, which has had new life breathed into its sales by people in their 40s and 50s opting for Subaru's all-wheel drive Outback and Forester sport utility wagons.

Aging boomers aren't the only ones concerned with image. The number-one reason people switched from mid-size cars to compact sport utilities was exterior and interior styling and appearance, J.D. Power and Associates found in its 1996 "Early Buyer Study," the most recent study of SUV buyers. In other words, the car looked more rugged, and that was how drivers wanted to see themselves. Also, the study found, as far as compact sport utilities go (versus full-size), fewer than 1 percent of respondents cited safety as a reason for buying.

And the features that attract light-truck buyers will continue to do so after the millennium, a study by the Office for the Study of Automotive Transportation at the University of Michigan found. For sport utilities, those features are status, exterior styling, passenger and cargo space, and product quality. For minivans, prized features are cargo space, price, comfort, convenience, and safety. For pickups, they are price, passenger and cargo space, brand reputation, and exterior styling.

If the sport utility segment is winning over consumers, who's losing them? Ten percent of compact SUV sales, for example, came from the luxury car segment, according to the Early Buyer Study, while 8.5 percent came from sporty cars, and 16 percent came from mid-size cars. And that's another indication of how popular these vehicles are with the over-50 crowd.

It's the fuel economy, stupid Currently, there seems to be just one real threat to slowing or reversing the trend of a great trucked society, and that is fuel economy. California is challenging the auto industry to achieve the same levels of fuel efficiency for its trucks as it has for cars. The argument, which will probably end up in court, is simple. If people are buying and using trucks in the same way they've traditionally bought and used cars, and if trucks are about one-half the American market, then standards should be the same. Now, trucks have a less strict gas-mileage standard as a consideration to farm and commercial businesses, which once were the primary users of vehicles now found in about 50 percent of American garages. The automakers, naturally, are saying that it can't be done. We'll see. But even a gas-guzzler tax tacked onto tht price will probably not have much of a slowing effect, especially if the economy stays strong and gasoline stays cheaper than bottled water.

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