johnnymk

http://www.ctv.ca/servlet/ArticleNew...0?s_name=Autos

The Canadian Press

SILVER SPRING, Md. -- Check out any car dealership in suburban Washington these days and that's exactly what you won't see - cars.

There's no end of trucks, vans and SUVs lined up with military precision, though, and they're likely to stay there for a long time.

Americans paying $4 a gallon for gas are losing their appetite for guzzlers so quickly that some showrooms are having trouble keeping up with demand for smaller vehicles.

"It's been a steamroll - you can feel it," said Clint Rose, a salesman at Sport Chevrolet in Silver Spring, Md., for more than 20 years.

"Last month we sold more cars than trucks. I can't remember the last time that happened."

Customers are trading in their sports utility vehicles for compacts at a brisk clip.

Families with children are augmenting their vans with a second small car to do most of their running around.

Some are opting for crossover utility vehicles that offer size and space but are based on car platforms.

And hybrid cars that run on electricity as well as gas, introduced about eight years ago, are fast becoming a top choice.

"We can't keep them in stock," said Andrew Cort, sales manager at Sport Honda.

While the shakeup in buying trends has been unfolding for months, there's been a much more noticeable change in the past two or three weeks, said Cort.

In the past, climbing gas prices had changed buying habits for short periods but many Americans reverted back to less fuel efficient vehicles when costs fell. But this time, with no sign of gas prices going anywhere but up and the U.S. economy in a tailspin, the American love affair with big vehicles may be over for good.

"There is a very profound and significant shift and it appears that it's permanent this time," said Philip Reed, senior consumer advice editor at Edmunds.com, an automotive research website.

"It's a stormy economic report. It's got people saying: `We need to prepare for the future'."

Foreign car makers are well-positioned for the changing market. American automakers, meantime, are "keeping up a brave front," Reed said from Los Angeles.

"I understand behind the scenes, there's a fair amount of panic. They've made their money on trucks and SUVs. That's given them the biggest profits over the last 10 years."

The widespread housing crisis and credit crunch are also having a major impact on the troubled domestic automotive industry.

Auto lenders and banks aren't doling out financing for cars anywhere near as easily as they once did, with many would-be borrowers being turned away.

Those with loans are falling behind on their car payments at a faster rate than in other downturns.

Some of the busiest people around these days are repossessors.

Steve Ghareeb, owner of Towing Pros and Recovery in Washington, said that part of his business has doubled.

"The gas prices are killing everybody. Add the bad economy and everything else. And it's not getting any better."

As a result, the American auto industry is facing what may be its worst year in more than a decade. Some projections peg expected sales at 15 million vehicles this year, down from 16.2 million in 2007.

In April, General Motors said it would cut production of pickup trucks and SUVs in Canada and the U.S. for the rest of the year, taking out a shift at a few plants including the assembly plant in Oshawa, Ont.

Ford Motor Co. also announced decreased production of larger vehicles last week, adding it wouldn't meet its goal of returning to profitability in 2009.

The switch is expected to result in 300 layoffs at the engine facility in Windsor, Ont., that builds V-8s for SUVs and half-ton trucks.

Chrysler faces a similar dilemma grappling with the lower profit margins of smaller vehicles now in high demand.

The company recently launched a program that caps the price of gasoline at $2.99 a gallon for three years for people who buy or lease new vehicles.

But analysts say Chrysler faces a potential backlash for encouraging more driving at a time when gas costs are making people more aware of the overuse of energy and the damage to the environment.

The price of gas is a potent symbol for Americans. They use it to gauge the country's well-being and their own personal circumstances.

Even though average U.S. prices are still about 20 per cent lower than in Canada, it's been a big shock for Americans to watch them climb nearly a dollar a gallon in the last year and 40 cents in the last month alone.

Many Americans are already changing their habits: using more car-pooling, riding bikes to work, telecommuting from home or taking public transit.

In Washington, transit officials are trying to buy or lease more buses, expand parking and encourage employers to stagger work schedules as they grapple with significant ridership increases.

And local governments across the country are taking some unusual steps to cut costs.

In the small town of Bremen, Ohio, deputies are trading in their squad cars for golf carts as gasoline prices rise.

Police bicycle patrols are making a comeback in states like Pennsylvania, Iowa and Virginia.

And the soaring fuel price of liquid gold has given police a new kind of criminal to catch - thieves who are puncturing or drilling gas tanks and using a container to catch the contents.

Siphoning gas is tougher now in many vehicles that have check balls in the tanks to prevent spills in rollover accidents.

The cost crunch is also changing vacation habits, with studies suggesting a fourth of Americans shortened or abandoned Memorial Day travel plans last weekend - traditionally the beginning of summer travel.

Consumer groups are sounding alarms about a double whammy for drivers this summer season as temperatures soar and they pump warmer fuel into their cars that gives them less energy.

Public Citizen estimates so-called hot fuel - at more than 15.5 degrees Celsius - could cost U.S. consumers an extra $3 billion this year.

There are growing demands for devices on pumps that would adjust for the heat, similar to ones in Canada that compensate for the cold so that gas stations don't lose money when fuel contracts.

The gas crunch is reviving memories of the 1973 oil embargo that significantly boosted demand for compacts and hatchbacks while killing the appetite for full-size luxury cars.

The times forced the Big Three automakers to introduce smaller and fuel-efficient models for domestic sales by the late '70s.

By that time, though, Honda, Toyota and Nissan had captured much of the market with improved, front-wheel drive models that offered better fuel mileage than their American competitors.

And while there' s no problem with supply, as there was in the 1970s, the cost alone is putting a lot of Americans on a new fuel diet.

Two new studies this week signal a potential turning point.

U.S. light trucks sales fell below 50 per cent of all sales in April for the first time since 2004.

And the distance travelled by U.S. drivers in March fell by 18 billion kilometres from the same month in 2007.

While changes in buying and driving behaviour have big implications for U.S. gasoline consumption, analysts say it would take years to have a meaningful impact.

Environmentalists and others, though, couldn't be happier.

"Many Americans are perceiving this as a horrible inconvenience and a breach of their constitutional right to bear arms and have cheap gas," said Reed.

"But a lot of good things can come from it. We can discover clearer skies."

Airencracken

Good.

__________________
"I remember my first orgasm, I just wish someone was there to share it with me..."11-05-2003 05:33 AM - Topane
They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety. - Benjamin Franklin
Religion is the sigh of the oppressed creature, the heart of a heartless world, & the soul of soulless conditions. It is the opiate of the masses. - Karl Marx
Hell is other people - Jean-Paul Sartre

Jeffbx

Anyone in the market for a truck or an SUV should be turning cartwheels now - you can get them for ridiculously cheap prices.

A guy I know just leased a $42k Saab 9-7X for about $400/mo. 4-5 years ago, that lease would have been about $650. Dealers will do almost anything to get the bigger trucks off the lot.

Jihforce

Yeah, but how much did he put down? LOL. Unless the dealer's selling price was like 5-10k under MSRP plus next to nothing financing (which GM generally does not do). I don't see $400 a month on a 42k Saab, no matter how bad the economy is.

__________________
Auto Leasing Info @ RIDEwithG.com | My Food & Travel Blog

Jeffbx

No, it was zero down... should have mentioned that. Yeah, I know you can get a Ferrari for $150/mo if you put enough down up front!

Although to be fair I should mention that he kind of had the dealer over a barrel - he had already put a deposit on another one & someone else at the dealership sold it out from under him. The closest one they could find on short notice was a nicer one, so he made out like a bandit since they honored his original quote. Plus it helps tremendously that leasing cost here in MI is ridiculously cheap (yay!).

Prngr44

I wonder if the price of vehicles in general in Michigan is better than other places due to the economy up there; especially in Detroitland.

__________________
http://otthouse.blogspot.com

Jeffbx

I think it's mostly because most people either work or have family that work for the big 3 & get a discount, and then the other mfrs have to lower their costs to compete.

However, both cars & houses are crazy cheap these days because of the crappy economy. Large or inefficient (vehicles AND houses) are just not selling.

r0CkiStAh

The soaring oil prices are affecting the costs of everything from food to gas. There are also significant issues on local and global environmental impact. While there are many issues, we need to look at our next leader and determine which will have the best course of action going forward…..I recently watch the two video in Pollclash about this issue, Obama and McCain talk about this…

Maarchk

Well, I'm sure my brother is excited about his pathfinder that he bought a month ago. Sigh and i Guess the GTO will get less and less love. Since it goes 8 gallons to the mile.

__________________
"The girl is crafty like ice is cold."

"I left my heart in san francisco... And my liver at Moe's Tavern."

A real friend is one who listens to you as much as they talk to you.

Daedalus

Wow! That's more than a top fuel dragster!

Jihforce

Wow...that bad huh? I guess my i don't feel so bad about my 18MPG now. Haha

zippyjuan

I caught some program I can't remember where right now but it said that if you own a gas guzzler right now you should bit the bullet (unless you are going to buy a new car anyways) and keep it- that you will lose more money trying to sell it and buy a new car than you will save on gas. From an environmental standpoint, you are better off selling, but economically it may be better to keep it.

__________________
I add new pictures to my photo gallery pretty regularly. You can see them here if you are interested: http://www.pbase.com/jeffryz

Daedalus

Of course that will become less and less true as prices rise. At some point the difference in cost of gas per month between gas guzzer and efficient vehicle will be more than the monthly car payment for some people. In extreme cases some people are already there, but they probably didn't have a gas guzzler to begin with.
I ran the numbers a few months ago and decided we'll get an efficient compact for daily commuting when gas hits $15/gallon, which I'm really hoping won't happen until 2014 at he earliest.
As far as environmental impact, that's debateable. There's an impact to building a new vehicle, and whoever buys the gas guzzler will still keep it on the road, even if it's in Venezuela.

johnnymk

People who are leasing SUVs: I am sure that many of their leases are expiring. I guess that the leasing companies will really be taking a hit when their owners turn them in.

My sister in Florida leased a Cadillac over 6 months ago and is losing her job. She is considering turning it in and taking a big penalty. I bet this will happen a lot.

Jeffbx

You're absolutely right - the secondary market is already flooded with bigger cars & lease turn ins are only adding to the problem.

Big displacement is also at risk - My Saturn lease is up at the end of this year and I was really hoping to swap it out for the V8 version of the Pontiac G8, but ~15MPG is NOT what I want to see these days. If you can get one of these, a GTO, or an SRT8 anything & sit on it for about 20 years, you'll have one heck of a collectors item, since these are all going to sell like crap for the next couple of years.

uncledaddy

Wow, this is all great news to me. I was thinking about getting a Tahoe, but now I may be able to get the Suburban or Yukon Denali XL.

Right now, I'm in a '96 Discovery that gets about 17 MPG highway, and I'm spending about 210 per week on fuel. A 6.2L Vortec would be a significant improvement.

__________________

DarkFury

Honestly, unless you NEED a big truck like that, I'd just stay away from them.

Yeah, the price sounds nice... but dayuum, the gas bill is really gonna SUCK!!!

I bought my truck when gas was like $1.80 per gallon (back in 2003). Had I known that gas would now be well over $3 per gallon (as it is $4+ now) I would have made a different decision. However now.. I'm not willing to take a huge loss on my truck in selling it. But I sure as heck wouldn't advise anyone to go that route unless they really need to go there.

BTW.. my truck gets roughly 10 to 12 MPG on average (I'm lucky to get 15 on the highway). Good thing is.. I only live about 6 miles away from my job.

__________________


DarkFury's Pimptopia - Don't Hate the Playa, Hate the Game!
Home of the Original OG Pimp (accept NO imitations)

Jihforce

yeah, living close to work is probably the best way to conserve gas. I gas up like every other week for about 60+, so getting 18MPG isn't that big of an issue for me.

Prngr44

Man, I was looking at getting a Hyundai Sonata and keeping my little Ford Ranger, but the deals on the F-150s are nuts.

Employee pricing, $6000 cash back, 100% KBB trade-in.

It's very tempting. I guess if there's one thing good about the house taking so damn long it's pushing off this purchase.