High petrol prices see Americans ditch SUVs

World news

Saturday, May 03, 2008

America's love affair with sports utility vehicles (SUVs) and pick-up trucks is finally over as the gas-guzzlers that ply the country's freeways and clog its city streets and parking lots are falling victim to ever-rising petrol prices.

Even offers like that from a Denver showroom of a year's free petrol with each new SUV isn't shifting the pick-ups and 4x4s quickly enough to stave off financial ruin for the country's car manufacturers.

With petrol now selling for almost $4 (£2) a gallon, consumers are trading in their Humvees and Ford Explorers so fast that for the first time, one in five cars sold in the US is now a compact or subcompact. In another first, sales of six-cylinder vehicles were bypassed by smaller four-cylinder, mostly Japanese, cars in April.

In some cities sales of hybrid cars outnumber the lumbering vehicles that are still pouring off the assembly lines at Ford and General Motors in Detroit. The occasional Smart car can even be seen nipping through the traffic. "The era of the truck-based large SUVs is over," said Michael Jackson, boss of the country's largest car retailer Autonation. Another car executive called it the most dramatic shift in the market in 30 years.

There has been a gradual shift by car-buyers to smaller, European-style vehicles over the past few years, but high petrol prices have turned what was a trickle of buyers into a stampede. "It's really a great thing that's happening but four out of five cars sold are still too big," said Katie Alvord, the author of Divorce Your Car! Ending the Love Affair with the Automobile. "It's like the country is stuck in a bad marriage and needs to change."

The biggest victim of the changing times is the petrol-swilling Hummer, the civilian version of the military's transport vehicle which became a status symbol in America's suburbs in the 1990s. Hummer sales collapsed by more than a fifth last year to fewer than 56,000 vehicles and fell by more than 30 per cent in the first three months of 2008.

The switch to smaller cars comes as the ever-rising price of petrol has become a hot political issue during the presidential primary season with two of the hopefuls, the Democrat Hillary Clinton and the Republican John McCain seeking to appeal to voters by offering a petrol tax holiday over the summer months when Americans do most of their driving. Mrs Clinton's rival Barack Obama has refused to join them, saying the plan is pandering to voters. Instead he has proposed a windfall profits tax on the oil industry.

According to George Pipas, of Ford, sales of passenger cars have exceeded trucks and SUVs for the first time in at least 20 years and pick-ups are now on the list of the top 10 vehicles being traded in for every small car in the industry.

Large cars and SUVs have long been status symbols for Americans, but as economic reality bites, car showrooms are being turned over to fuel-efficient vehicles. The tiny Toyota Yaris has jumped in sales by 46 per cent, while the equally small Honda Fit is racing out of the showrooms as customers look for a vehicle that gets more than 30 miles to the gallon.

Dave Strom, who sold Chevrolets for 40 years, recently picked up a Smart which gets him 45 miles to the gallon. "I had to smile the other day when I filled my tank for $18 and change while the guy next to me was up to $80 and still clicking as he filled his Ford Explorer," he said.