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Tough Times for SUVs
US consumer demand for sport utility vehicles (SUVs) is weakening, according to recent transaction data from the Power Information Network (PIN), LLC, an affiliate of J.D. Power and Associates. SUVs are sitting longer on dealer lots before selling, while prices have declined and incentives increased.
The number of days SUVs are on dealer lots (days to turn) increased from 60 days in July 2003 to 73 days in July 2004, up 22%. For luxury SUVs the increase was 47% (50 days in July 2004 versus 34 in July 2003).
The average SUV transaction price in July 2004 was 2% down on July 2003, equivalent to $620 - at a time when overall new-vehicle prices edged up slightly. The price of luxury SUVs slid almost 5%. New vehicle manufacturers increased SUV incentives in July - average expenditure per SUV in July was $3,440,up nearly 12% from June. This increase was almost twice the overall industry average increase.
Tom Libby, senior director of industry analysis at PIN, says the SUV segment is under exceptional pressure: 'Higher gas prices and a renewed emphasis on cars by some of the OEMs have both likely played a role in this trend'.
PIN collects and analyzes daily new- and used-vehicle retail transaction information from automotive franchises, with more than 250 details included. Its web site is at www.powerinfonet.com
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