With gas prices low, SUVs roar back

John A. Koninis (right) looks over his invoice on an eight-cylinderF150 with Dino Rucci of Winner Ford in Cherry Hill.
John A. Koninis (right) looks over his invoice on an eight-cylinderF150 with Dino Rucci of Winner Ford in Cherry Hill.
Posted: December 19, 2008

So long, cute little economy car. Welcome back, big truck, buddy ol' pal.

Americans who fled to small vehicles during $4-a-gallon gas are rushing back into the arms of sport-utility vehicles and light trucks, reversing a trend in which economy cars soared in popularity while consumers ditched brawny gas hounds.

Recent data and interviews with local dealers show more U.S. consumers have bought SUVs and pickups of late than any other new vehicle, thanks to the free-fall of crude-oil prices and must-sell discounts that would make even Santa Claus seem like a cheapskate.

The pace has intensified in the last few weeks thanks to even steeper manufacturer discounts aimed at resuscitating business on glutted lots.

The uptick is welcome news for automotive retailers whose sales reached a near-standstill after the Wall Street crash of mid-September. It also is a sign that some consumers are rolling the dice again on vehicles that, just a few months ago, they decried as impractical.

"Americans don't want to drive little cars," said Sophia Koropeckyj, a senior economist and auto-markets analyst with Moody's Economy.com in West Chester. "They really prefer larger vehicles, and gas prices have receded more than half since the summer. That's the only conclusion there is."

Even though there is "a general belief that gas prices won't stay as low as they are," she said, consumers have been emboldened.

"In Florida, you can buy two pickup trucks for the price of one," she said.

Ford dealers in the region say employee pricing and rebates since mid-November have sparked interest in pickups and more fuel-efficient crossover SUVs. Sales of the Focus and Fusion, small cars popular in the summer, are cooling off.

"Nothing is selling briskly," said Kerry T. Pacifico, who owns Pacifico Ford at Philadelphia's airport auto mall. Bigger models are "selling better than they did six months ago."

Contractors and other laborers who held off on replacing their trucks as the economy soured have come out of the woodwork to capitalize on discounts on Ford's ever-popular F-150 pickup, dealers said.

A lower-end 2008 F150 that lists at $20,900 can be bought for as low as $15,083 with employee pricing, Pacifico said. A similar model last year would have sold for $17,500, off a $20,000 sticker price.

Buyers are snapping up large pickups and midsize SUVs for home use, too. But the pace remains far below heyday levels.

"I would not classify what's happening as they're banging the doors down to buy pickup trucks or sport utilities," said Don Slipp, owner of Winner Ford in Cherry Hill. "We don't see the consumer coming in and setting any buying records. Compared to where it was a few months ago, it's a big pickup."

The trend emerged in November with a 7 percent increase in SUV sales across all manufacturers, foreign and domestic, while car sales continued to decline from high levels in the summer.

It is good news for the Detroit automakers, who dominated truck and SUV sales until gas prices skyrocketed. Sales bottomed out, and the Big Three are seeking federal aid to fend off bankruptcy.

"They depend on light trucks for their sales much more than other manufacturers," Koropeckyj said.

Area Ford dealers, in particular, said business had increased in recent weeks.

"We've been doing extremely well since the last month and a half," said Dino Rucci, general sales manager at Winner Ford, amid a steady stream of browsers and buyers yesterday. "The sales guys are all excited. They're finally seeing customers."

Shoppers bought two Ford Explorer SUVs this week, leaving six on the lot, said Slipp. F150 and F250 trucks have been most popular.

"We're going to sell out of trucks by the end of the year," Slipp said. "We usually have 50 or 60 trucks in stock. We're down to a dozen."

John A. Koninis was hashing out a deal at Winner yesterday to replace his 2000 Ford Excursion (a 10-mile-per-gallon SUV) with an eight-cylinder, four-wheel-drive F150, which gets about 18 m.p.g.

Even though his residential-flooring business is down, Koninis said that now seemed like the right time to replace his aging truck.

"Things are up in the air politically and economically, gas prices have gone down," said Koninis, of Wilmington.

The 2008 F-150 XLT - loaded with creature comforts - will cost him $23,867. The same car would have gone for $28,000 a year ago, Slipp said.

It lists for $31,000. But with a $4,500 Ford rebate, a $500 credit rebate and a $5,000 dealer markdown, Koninis was ready to buy.

Because of its improved mileage, even if gas goes up to $3.90 a gallon, Slipp calculated that Koninis would save $1,733 annually on gas if he drives the new F150 10,000 miles a year.

Other dealers say they, too, are seeing an increase in demand for bigger vehicles.

David Dodge owner David Kelleher said he included a batch of SUVs in a recent order of new vehicles from Chrysler.

"SUVs and minivans are still the hottest thing on the market," he said.

Officials said they doubted demand would return to previous levels. And while it is a salve to automakers, it may not be the best thing for the country.

"There's definitely a desire to reduce dependence on foreign oil," Koropeckyj said. "So in the long run, no, it is not a positive trend."


Contact staff writer Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com.

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