Report: Large SUV Sales Growing Faster Than Small Cars
Hybrids and alternative fuel might appear to be all the rage these days, but a report in USA Today claims that the hottest selling segment in the car market is, surprise surprise, full-size SUVs.
While small cars still outpace big SUVs in total units sold – selling 974,000 examples versus 121,000 sport-utes in the first 6 months of 2010 – year-over-year sales for SUVs outpaced small cars, with truck sales up 19% versus 17% for compacts.
“The American consumer tends not to like small cars, despite what the government would like, and despite how much the manufacturers have committed to small cars,” George Magliano, director of North America auto forecasting for consultant IHS Global Insight, told USA Today.
Aside from being popular with consumers, SUVs are a favorite of automakers because they are extremely profitable. Because they share so much with full-size pickups, the cost of engineering them is lower, and demand is traditionally strong. However, a spike in gas prices can easily see the bottom drop out of the market, causing catastrophic financial difficulties for automakers that rely on full-size SUVs and trucks for the majority of their revenue . This same phenomenon was part of the domino effect that led to a bailout of GM and Chrysler in 2008.
[Source: USA Today]
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