$2.36 a Gallon? Honey, I Shrunk the SUV
Mario Sanchez really wanted a big, American-made sport utility vehicle to haul his children around in pride and safety.
Then he did the math. And bought a Toyota 4Runner.
“It was the price of gas,” the 31-year-old North Hills resident said.
The high cost of gasoline -- which averaged $2.36 per gallon in Los Angeles County on Wednesday -- priced him out of the market for a bigger sport utility vehicle. With six cylinders instead of eight, the smaller 4Runner could cost Sanchez as much as $720 per year less than the Chevrolet Tahoe or GMC Yukon he had wanted to buy.
As gas prices hit new records, there are signs that motorists may be downsizing -- at least a bit.
Sales of the largest SUVs dived last month from the previous April, according to research firm Autodata Corp., which tracks sales nationwide: Ford Expeditions dropped 34%, Lincoln Navigators were down 25%, and Chevrolet Suburbans drew 21% fewer buyers.
Overall SUV sales continue to climb, up 2.5% last month over the previous April, largely due to the soaring popularity of smaller, more fuel-efficient SUVs. Sales of Saturn’s Vue rose 59%, Chevrolet’s Blazer jumped 55%, and Ford’s Escape rose 49%.
Car experts say it’s too soon to conclude that high gas prices will cut into sales of the largest SUVs over the long run. And last month’s drop-off might be explained, at least in part, by a rise in sales in April 2003. But transportation industry analysts say that if gas prices stay high, the “bigger is better” mentality could give way to a thriftier attitude.
“We expect to see a shift from big trucks to little trucks, and from big cars to little cars,” said Ron Tadross, an auto industry analyst with Banc of America Securities.
Adjusted for inflation, today’s prices for gasoline are actually a third lower than they were at their peak in 1982. But with average prices in Southern California hitting $2.40 in Riverside, San Bernardino and Ventura counties Wednesday, they still take a bite out of a motorist’s budget.
At that price for gas, and based on 15,000 miles a year of stop-and-go city driving at the Environmental Protection Agency’s estimated city mileage, it would cost about $2,600 for fuel to drive the largest sport utility vehicles, including Chevrolet’s biggest Suburban and Tahoe models.
Gas for a Toyota Sienna minivan would cost about $1,900 per year, while for a Toyota Prius, a hybrid car, it would cost about $600.
“The longer these prices persist and the higher they go, ultimately they’re going to become a problem,” said Bob Schnorbus, chief economist for the automotive market research firm J.D. Power and Associates.
“We need to be watching this closely.”
Morris Sheppard, a furniture designer who needs a vehicle with a cargo bed large enough to move custom-made couches and tables, had planned to replace his Jeep Grand Cherokee with another one. But he bought Toyota’s Scion xB instead, figuring he would save about $1,000 per year in fuel costs.
“I wasn’t as concerned about the gas mileage the last time I bought a car,” the 59-year-old Marina del Rey resident said. “It was not in the forefront of my consciousness as it is today.”
High prices at the pump are also leading more motorists to buy gas-electric hybrid cars, according to market analyses by Toyota and Honda, which make the two most widely available models.
At Toyota of North Hollywood one recent morning, Shane Ross and his wife took turns cradling their new baby as they discussed the automaker’s Prius hybrid with a salesman. The car had initially seemed too expensive to the 33-year-old Ross, who has three children, but now he is considering buying one.
He figures that he would save enough money on gas to recoup the premium he would pay for the popular Prius, which has a suggested retail price of about $21,000 but can sell for as high as $30,000.
Dealers and automakers said many customers who want large SUVs and trucks are opting for versions with smaller, more fuel-efficient engines.
“Our customers are very aware of the gas price situation, and we’re seeing them make decisions within models,” said Mark McCready, director of pricing strategy for the online company Carsdirect.com.
“For example, the customer that wants to buy a Ford Explorer is saying, ‘Do I need the 4x4 or can I live with the 4x2? Or do I really need the V-8? Can I use the V-6?’ ”
Jesse Toprak, director of pricing and market analysis for the online research firm Edmunds.com, said consumers have been concerned about gasoline prices since last summer, when the usual seasonal spike in prices failed to subside.
To move the larger vehicles, he said, automakers and dealers are resorting to incentives and discounts. In the case of Chevrolet’s Suburban, they add up to about $10,000.
Ted Nicholas, general manager of Three Way Chevrolet in Bakersfield, is counting on the markdowns to boost sales of Suburbans, which have been sagging even in partly rural Kern County.
His customers are not rejecting SUVs altogether, Nicholas said, but they are increasingly choosing the half-ton Suburban over the three-quarter-ton version, or moving from the Suburban to the Tahoe, which has several models with a smaller engine.
“Our Suburban sales were off,” said Nicholas, who Chevrolet says is one of the state’s biggest sellers of Suburbans. “But our Tahoe sales were up.”
Part of the reason was price and availability, he said.
But customers are also concerned about gas mileage, and the biggest SUVs can get as little as 10 miles to the gallon.
“There is a big change here,” said Ali Sepehri, who sells Lincolns, Mercurys and Toyotas at Toyota of Hollywood. “Our customers are really considering the price of the gas.”
Raul Gutierrez, a father of two from Eagle Rock, had been considering buying a Ford Expedition or a Toyota Sequoia, both large SUVs that the EPA rates at about 14 miles to the gallon in city driving.
Last Friday, on the day that the nationwide average cost of self-serve regular gasoline hit $2.06 a gallon and California averaged $2.32, Gutierrez decided to buy a Toyota Sienna minivan, which is rated at 19 miles to the gallon in city driving.
His reason was simple: “It’s not a gas guzzler.”
Times staff writer John O’Dell contributed to this report.
*
(BEGIN TEXT OF INFOBOX)
What it’ll cost
With average gasoline prices hitting $2.40 per gallon in several Southern California counties, it’s becoming more expensive to drive the biggest sport utility vehicles. Sales of large SUVs were down in April from the previous year; sales of smaller ones appeared to be on the rise.
Full-sized
Chevrolet Suburban: 8-cylinder, 5.3-liter engine, 14 mpg in city, $2,571 per year in fuel costs.*
Sales: Down 21%.**
Mid-sized
Toyota Highlander: V-6, 3.0-liter engine, 19 mpg in city driving, $1,895 per year in fuel costs.*
Sales: Up 15.5%.**
Compact
Ford Escape: 4-cylinder, 2.0-liter engine, 23 mpg in city driving, $1,565 per year in fuel costs.*
Sales: Up 49.3%.**
*Cost estimates assume city driving of 15,000 miles per year in 2004 models.
** In April 2004 as compared to April 2003.
Sources: U.S. Environmental Protection Agency, AAA, Autodata Corp.
Los Angeles Times
