America ends love affair with the SUV
When Americans junked their old cars under the Cash for Clunkers program, they replaced them with more efficient, smaller vehicles. Commentator David Frum draws some larger economy lessons from Detroit's recent troubles.
Commentator David Frum. (David Frum)
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TEXT OF COMMENTARY
Kai Ryssdal: The most recent round of news from the U.S. auto industry was more hopeful than it's been in a while. Ford's making money. Car sales overall are, well, at least not as bad as they have been. Commentator David Frum draws some larger economy lessons from Detroit's recent troubles.
DAVID FRUM: Do America's highways look different to you? They should. Under the Cash for Clunkers program that ran through the spring and summer, almost 700,000 old vehicles were destroyed.
The vehicle most frequently junked under Cash for Clunkers? The 1998 Ford Explorer. Number two? The 1997 Explorer. Followed by the 1996 Explorer. All told, six of the top 10 vehicles destroyed under Cash for Clunkers were models of Ford Explorer, two were Jeep Cherokees, and two were minivans.
The car most purchased? Toyota Corolla, followed by Honda Civic, then Ford Focus. Only one SUV appears on the top 10 purchased list: Ford's Escape, a much thriftier machine than the Explorer.
America's love affair with the SUV has faded, and there is reason to think it has ended altogether. Even before the recession, sales of Hummers, Ford Expeditions, and other huge SUVs had already collapsed, victims of high gasoline prices.
In this recession, gas has remained relatively expensive. It will likely remain so even after recovery. Chinese consumers bought more than 9 million cars in 2008. They will buy more in 2009, despite the recession, which means they -- not to mention the Indians -- will be buying more gasoline.
While global demand for oil trends up, the debt-burdened dollar will surely trade down for some time. As Americans pay for imported oil with weaker dollars, gasoline will feel even more costly here than elsewhere.
And cost-cutting will remain in vogue even when the economy recovers, as consumers save to rebuild the wealth they lost in the housing crash. So farewell SUV. Hello econobox. We haven't gone green. But we have gone broke.
RYSSDAL: David Frum is a resident fellow at the American Enterprise Institute.
Comments
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11/23/2009
Austerity, cramped limits, and restricted possibilities will never sell in this country as they are antithetical to its basic character. Americans only prioritize fuel efficiency in times of grave economic crisis or sky high fuel prices, which usually coincide.
The solution is not to abandon the SUV, but to adopt former NASA rocket scientist and nuclear engineer Robert Zubrin's "Energy Victory" plan to transition from gasoline to alcohol fuel.
Adding alcohol fuel capability to a vehicle costs automakers only $130 per car, and given alcohol's wide resource base, it can never have its market cornered and price artificially spiked by an OPEC like entity.
Thus alcohol prices are and will be stable and affordable. That predictability will calm markets, encourage Americans to buy the profitable roomy powerful safe vehicles they really want, and deliver a huge blow to OPEC's finances.
By contrast conservation is ineffective - OPEC can just restrict production, spike the price, and make as much money as before on reduced sales volume.
11/17/2009
Mr. Frum could have had a more interesting column had he investigated where America's love for the SUV came from.
It began with the minivan. Chrysler invented it after a government bailout for its bankrupcy. Chrysler had a new front wheel drive platform, as station wagons were getting smaller and families were upgrading to big vans--and getting hit with high gas prices in 1981.
Chrysler created a mini-van, on their new platform. The side doors were bigger than those on station wagons, making it easier on parents' backs to buckle in their children. They sold like hot cakes, until a problem developed.
The problem was, the Japanese could build minivans on front wheel drive platforms, too--and theirs' were known for reliability, while America's were not.
But Detriot had something the Japanese did not build--large pickup trucks. Dodge came back with ads touting the size of their new, big-rig looking Dodge Ram. And Detriot noticed, if big trucks could be advertised to people as a sexy, manly way to impress the Jonses...then SUV's could be sold to families as a great idea.
so why not advertise small cars for the cities and densely populated coastal areas, and mid size for the middle of the world's biggest consumer market, as a better idea for transportation? As long as oil is sold in dollars, the value of the dollar will either affect it...or the need for oil will affect the value of the dollar. But the fact that oil is running out, shall never change.
From Richmond, TX, 11/13/2009
The value of David continuing to have the air time is that it forces us to "think" about the topic. You know its spin... You just have to figure out "what" the spin is. Its a way of forcing an examination of the opposite point of view.
In this case, I think David's spin is a backhanded way of saying the Obama policies are a "bust" whether he's right about it or not. Monitary policies will force the price of oil up even though we are using less. We're going to be forced to be happy paying "more for less". And this may well be true... But he did spin the numbers.
From CO, 11/12/2009
I agree with Jimmy. Search both AP and Edmund's analysis of the cash for clunkers program, and you'll find that SUVs and trucks were very popular.
11/12/2009
AP article - Truth
Frum - Spin
It must be some FCC rule that radio NEWS has to include fringe spin garbage like Frum.
It is unfortunate that the program wasn't harder on the mileage standard, but of course, where are we in the US in that? If the mandate was 30mpg+, how many would have bought from the big three?
From OR, 11/11/2009
I'm not saying David Frum's analysis is wrong, but after reading this item:
http://news.yahoo.com/s/ap/20091104/ap_on_bi_ge/us_cash_for_clunkers
I am left wondering where the truth lies.
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