Thanks to the huge spike in the price at the pump in the first half of the year, SUV sales are down more than 40% in 2008 from 2007. In response, the not-so-Big Three have closed many plants dedicated to making SUVs, a product that has come to symbolize their perceived inability to produce the vehicles American consumers want to buy.

Writing on his New York Times "Freakonomics" blog, Steven D. Levitt asks the question:

“The apparent cause of death for SUV’s was high gas prices. Doesn’t that mean that with low gas prices SUV sales should come back to life?”

Levitt goes on to suggest the reason SUV sales haven’t recovered is both a fear gas prices will rebound as well as a belief: “When gas prices got high, it became uncool to own an SUV.”

The SUV may be dead, but the humble pickup truck doesn’t appear to be suffering the same fate — because, for many buyers, trucks aren’t a fad, they’re actually a useful vehicle.

Keep in mind that in the current market problem of a lack of credit is being seen across the board — sales are down for every single vehicle in the marketplace. So the way to determine sales strength at the moment is to peg one vehicle's sales drop to another. So, while sales of the historically top-selling Ford F-Series pickup are down 25.4% for the first 11 months of 2008 compared to the same time period in 2007, they’re only down 18.4% when comparing November, 2008 to November, 2007. That's a lower drop in sales than that seen by the Toyota Camry, down 5.3% over the first 11 months of the year, but down 28.7% during the this past month.

So what does that potentially tell us? It would seem possible that the recovery in sales can be pegged to gas prices; as the economy collapsed in October, gas prices fell and consequently, pickup truck sales began to increase, and the sales of mid-size econo-sedans dropped. But, what we're also seeing is while some SUVs have recovered sales, for the most part, they haven't quite followed that same number, and appear to be continuing their decline.

Indeed, that trend can be tracked across other popular pickups and cars. The Chevy Silverado was only down 22.5% November to November while the Honda Accord was down 38.1% and the fuel-efficient Toyota Prius fell a staggering 48.3%.

What does this all mean? It appears that while people do stop buying pickups when gas prices spike, they’re more resilient long term than SUVs because they’re more useful. When gas prices drop, it looks like Americans still want to buy bigger vehicles, but now, they demand actually utility from their trucks, either by necessity or fashion.

The larger picture? Throughout the whole Carpocalypse, American automakers have always been building the vehicles Americans wanted to buy, it’s just they weren’t building the vehicles Americans thought they could afford to own.

[via The New York Times, data: Automotive News]

In a remarkably candid statement revealing where dealerships actually make their money, Poncho Redfern, president of San Francisco-based Thomason Auto Group, said

"...you can't outrun it in F&I. There's only so much you can honestly earn in that department. This wreaks havoc on the bottom line. We see people with $10,000 in negative equity.

A dealer does not have enough room to help the customer out of it."

The report also mentioned cancellation of a future Hummer product and the potential shuttering of a brand, though no concrete evidence has emerged to clarify whether the Hummer product cancellation and brand closure were one in the same (Hummer) or whether Hummer might be allowed to die on the vine while another weak brand, such as Buick, was closed outright or moved off-shore. [Automotive News (Sub. Req.)]

Spy Shots: 2007 Honda CR-V [TheCarConnection]

Related:
Pre-Release Video of Acura RDX SUV [internal]

We're not exactly sold on the merits of ethanol, although it makes somewhat more sense in the Midwest than it does anywhere that isn't the Midwest. The problem is, as we've mentioned previously, that ethanol requires significantly more BTUs to produce than it gives back. Combine that with the fact that it can't be shipped via pipeline because it absorbs water, and E85 becomes pretty expensive out on the coasts which is one of the main reasons why E85 (85% ethanol/15% gasoline) isn't really sold out there. Still, the General is planning to build 400,000 trucks and SUVS capable of running E85 next year, allowing more Midwesterners to take advantage of the alternative fuel choice.

Ethanol-gas fuel boosts mileage of GM's trucks [Detroit Free Press]

Related:
Frankfurt Premiere: Saab 9-5 [Internal]

While those of us in the industry have been hearing from the General that full-size SUV sales will level off in the wake of Katrina's roundhouses, uppercuts, karate hits and kung fu kicks to the Gulf Coast's oil production capacity, the mainstream media have now picked up on the story, with CNN/Money quoting none other than the Lutzmeister himself immediately post-rollout of GM's new big-size sport-utes:

"People are still going to buy full-sized sport-utilities at $3 a gallon. But even at $3 a gallon, it's 750,000 people a year. It's not going to go to a million," Lutz was quoted as saying. "Two years ago we would have told you the segment is going to go to a million vehicles. It's not going to do that. It's leveled off.

"We think 750,000 (units) is the best prediction based on today's fuel prices. I think we may maintain our volume at other people's expense, even if the segment shrinks a little bit," Lutz said according to the report.

Big Momma Nature's a bitch sometimes, ain't she, Bob?

Report: GM says new SUVs wont help sales [CNN/Money]

Related:
GM Reveals New Chevrolet Tahoe [Internal]