Commentary

America ends love affair with the SUV

Marketplace Staff Nov 11, 2009
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Commentary

America ends love affair with the SUV

Marketplace Staff Nov 11, 2009
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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.

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