RIP SUV?

Some question whether it's time to declare RIP to the SUV. GM admitted Tuesday that sales of its large sport-utility vehicles are unlikely to ever regain the peaks of recent years as soaring gas prices and changing tastes quell consumers' enthusiasm for the vehicles. GM acknowledged that it has begun planning for a future when large SUVs will no longer be its main profit-driver. “Given all the alternatives that are out there, given the uncertainty on gas prices, given some image factors, we think it's appropriate to plan in a more conservative manner,” said Paul Ballew, GM's executive director of global market and industry analysis. Nonetheless, GM officials said they aren't ready to scrap the company's fleet of big rigs. GM's current roster of large SUV and pickup models generate more than $50B a year in revenue. But consumers are realizing that bigger isn't always better. Not only are high gas prices making them expensive to operate, but recent studies have raised questions about the safety of some SUVs. With their high centres of gravity, experts say some models may be more susceptible to rollovers. In the first five months of this year, sales of full-sized and mid-sized SUVs across the US tumbled 15% to 822,258 vehicles from 972,150. But analysts say it's too early to bury the SUV. Sales of luxury SUVs and smaller “crossover” models remain strong and they are highly profitable. In 2006, GM is poised to launch a new line of full-sized trucks and SUVs. And analysts say the new models could buck the downward trend in sales. “The [SUV] market is vital to us,” GM's Ballew said. “It's still a great place to do business.”
(Globe and Mail, Toronto Star 050831)