August 16, 2004
Consumer demand for SUVs in U.S. weakening
Westlake Village, California – Consumer demand for sport utility vehicles in the United States is weakening, according to recent transaction data from the Power Information Network (PIN), LLC. The data shows that the number of days SUVs sit on dealer lots before selling has increased substantially over 2003. SUV prices have also declined while average new-vehicle prices have increased, and incentives increased more on SUVs from June to July than they did on any other type of new vehicle.
Further suggesting a weakening in the SUV sector, the average SUV transaction price dropped 2 percent (or U.S.$620) in July versus a year ago, while overall new-vehicle prices edged up slightly. Luxury SUVs exhibited the most weakness, as the average price slid almost 5 percent.
To spur consumer demand, new-vehicle manufacturers increased SUV incentives in July. The average total incentive expenditure per SUV in July was U.S.$3,440 – up nearly 12 percent from June. This increase was almost twice the overall industry average increase.
“The data clearly suggest the SUV segment is under exceptional pressure,” said Tom Libby, senior director of industry analysis at PIN. “Higher gas prices and a renewed emphasis on cars by some of the OEMs have both likely played a role in this trend.”