Hybrid Nation? Nope.
In spite of $3-a-gallon gas, carmakers are still betting big on SUVs. Look out, Prius—here comes the Nitro.
http://www.msnbc.msn.com/id/9556248/site/newsweek/Oct. 10, 2005 issue - To Cleveland real-estate agent Kim Bittner, the incredible bulk of a Hummer H2 was always oddly alluring, but just too over the top. For one thing, it wouldn't fit in her garage. And with runaway gas prices, owning a 12mpg H2 just wasn't an option. But then General Motors came out this summer with the slightly smaller Hummer H3, which gets 20mpg on the highway. Now Bittner's $36,000 "mini-tank" is turning heads wherever she goes. "The first thing people ask is 'How is it on gas?' " she says. "When I tell them it gets 20 miles to a gallon, they just grin and say, 'I want one, too'."
Surprise! The SUV isn't dead yet. Sure, $3-a-gallon gas has sent sales of hybrids soaring and sunk sales of behemoths like the Chevy Suburban. But hybrids represent just 1.3 percent of the U.S. auto market. The real action remains in SUVs, which still account for one in four new vehicles sold in America. What's changing, though, is that we're downsizing from XL models to more modest SUVs, like the H3 and "crossovers" built on smooth-riding car chassis like the Honda Pilot. Detroit's dependence on the biggest of the breed caused its current calamity. But Motown now sees much of its salvation riding on this new-style SUV. Chrysler is doubling its SUV offerings over the next three years, including the radical Dodge Nitro model coming next year with flared fenders and fuel-friendly V-6. GM is counting on a new crop of full-bodied SUVs arriving next year to drive its comeback. And though the models are still big, GM designers burnished the edges to make them look smaller. By 2010, the number of SUVs on the market will increase 24 percent to 109 models, while just 44 different hybrids will be offered by then, according to auto researcher J.D. Power. Even Toyota, the hybrid leader, is building a $1 billion pickup-truck plant in Texas where analysts expect it to build a new—and bigger—version of its Sequoia SUV. Despite pain at the pump, 56 percent of Americans refuse to downsize and will stick with the wheels they've got, according to a new survey by consultant AutoPacific. "We haven't turned into wimps overnight," says AutoPacific's George Peterson. "People still like a tough-looking SUV."
You wouldn't know that from all the hype about hybrids. Bill Ford just announced a big hybrid push that could lead to a tenfold increase in sales—from a tiny number now—by the end of the decade. And Toyota is spending up to $60 million on a new ad campaign to promote its hybrid drive system as the auto industry's new killer app. But take a look at the numbers. Hybrids, as hot as they are, still represent only about 5 percent of Toyota's U.S. sales, while pickups and SUVs account for 29 percent. By the end of this decade, J.D. Power predicts hybrids will account for less than 4 percent of total auto sales. SUVs, meanwhile, will grow from 24.6 percent to 26.6 percent. "For hybrids to have a double-digit market share," says Power's Jeff Schuster, "we'd essentially have to run out of fossil fuel."
Why won't we park our big rigs? SUVs remain the perfect complement to a brash culture that likes to live large. They satisfy a need Detroit researchers call the "maximum-use imperative"—that rare occasion when you're towing a boat while ferrying your child's entire soccer team. But with $3 gas the new normal, SUV makers are now maximizing something else: mileage. Next year's blingy new Cadillac Escalade will get 20mpg—what GM hopes is the new magic number for social acceptability. That's something SUV owners need these days to rationalize their driving choice to their neighbors. So add this to the list of major contradictions of our time, right after jumbo shrimp: the PC SUV.
"SUVs: The Hummer H3 will be one of 109 SUV models offered by 2010, vs. 44 hybrids"
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