Automotive News [sub] reports that the perfect storm TTAC predicted last year is now a howling hurricane. "In June, used full-sized pickups sold at auction for an average price of $8,740 — a 25.4 percent decline from June 2007, according to auction company ADESA Inc. The average wholesale price of large SUVs plunged 27.5 percent to $10,577." Some say the worst is over. Tom Webb, chief economist for auction company Manheim, claims "wholesale prices of large SUVs appear to have reached bottom, while inventory of used large pickups needs to thin before prices stabilize." Appearances can be deceiving. While there may be a blip in light truck sales– as "bargain hunters" scoop-up cheap-as-chips vehicles– it's a dead cat bounce. The demand for pickups and SUVs has virtually disappeared. And there are millions of people who would get out of their gas-hungry vehicles if they could. But they can't. In short, as Frank reported in his June BTN, we've not seen the end of this downturn. TTAC's seemingly endless liturgical litany may sound as bleak as a Russian novel, but reality makes it so. Did you know that Russia considers Chekhov's supposedly dark dramas comedy? And anyway, when the going gets tough, the tough aren't phased.
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I suspect that the wholesale market overreacts swiftly to market conditions. I think the full size used SUV values are now at their lowest (and may remain there for some time). The pendelum will swing back a little.
It’s time to toss “perfect storm” onto the cliche scrap heap, along with “at the end of the day.”
I’m down with “howling hurricane” though.
Um, wrong Chekhov.
I love “dead cat bounce.”
If gas prices don’t go up anymore, then SUV sales and prices might stop tanking. If all that oil Tommy Gold predicted materializes at a depth it can be drilled, and if global warming turns out to be a mistake, if spring coming early to alaska and glaciers and arctic ice melting are just a collective worldwide hallucination (oh, please, oh please–I never want to have to ease up on the gas pedal).
Still, I will take the fall of SUVs as the consolation prize.
I bought a couple of Russian “dark” books recently. Not graphic enough I thought. “The Idiot and Crime and Punishment” I lost interests. Maybe I’ll read them soon, I was looking for an answer as to how to feel about being a bad man.
In Russia, SUV drives YOU!
Yes, if you’ve been looking for a nice truck to putt around on the farm, the selection just keeps getting better and better.
Edit: I wonder where Chekhov’s phaser is?
Gotta love those Crazy Russians!
As for the SUV fad… good riddance to bad rubbish.
–chuck
“good riddance to bad rubbish”
I think calling SUV’s in general “bad rubbish” is a little silly, don’t you? Don’t forgetthat just a short time ago these vehicles wre what the consumer demanded. The manufacturers refined and improved them until they performed all the tasks that we needed.
And as far as the global warming nonsense goes…
nah.
Perfect time if you’re an avid autocrosser to pick up a tow rig if you ask me.
The Cherry Orchard and the domestic automakers have much in common. Quite scary how well that worked out.
Skooter
I think calling SUV’s in general “bad rubbish” is a little silly, don’t you? Don’t forgetthat just a short time ago these vehicles wre what the consumer demanded.
Not silly at all.
The consumer needed a kid hauler and grocery getter. Not a CAFE-exempt light truck body-on-frame shaped loophole. Minivans and station wagons would have done the trick but the Big 3 saw bigger margins in trucks, hence the goofy SUV fad. They were marketed very well, I’ll give them that. But consumers did not need 4-wheel drive and high CoG coupled with soft Firestones and roof-mounted crumple zones. Soccer moms only go off-road when they get to the play-field’s gravel parking lot. Good marketers can obviously convince people to buy items they don’t really need, especially when the economy is good.
Is there a “real” market for SUV’s? Sure, there are a handful of folks that go off-road, tow stuff, etc… but the vast majority of these “soft-roaders” were sold to folks who used them as a general-purpose CAR. Kid haulers and grocery getters, not to mention commuters. But when gasoline costs $4 a gallon, does driving something you don’t need, when it gets crappy fuel economy make sense? No.
95+% of the people who bought SUVs in the past twenty-some years could have made do with a smaller car. They bought the SUV because it was “cool” or provided themselves with some sort of (mis)perception of safety or security.
So no, I don’t think calling the SUV a fad is silly at all. Buying something you don’t need is by definition, a fad. The free market corrects idiocy like this, and the value of a used SUV indicates that it was indeed, a fad. I stand by my original statement. The facts of the current market back me up…. all the way to the bank. Good riddance to bad rubbish.
–chuck
Chuck, agreed. The worst part is that SUV’s drive and ride terrible compared to wagons. Bad rubbish indeed.
Mr. Farago – “dead cat bounce.” I love it. I don’t know from where you draw your inspiration, but it’s one of the main things differentiating this site from others.
# Skooter Says:
July 9th, 2008 at 6:41 pm
And as far as the global warming nonsense goes…
nah.
You would know of course
A delightfully nerdy ‘Plan 9 From Outer Space’ reference yesterday….A very sophisticated Chekhov reference today. This guy is fun to read…..
If people just drove their pickups and SUVs slower, they could weather the high gas prices and keep their wheels. Instead, everyone’s panicking, dumping their SUVs for dimes on the dollar. This will pass.
By the way, the Trek pic is from which episode? I’ll bet Farago knows….
The loophole SUV s were given in emissions is responsable in part for their existence. Had they been regulated as a just a big car would have been, then they wouldnt have gotten so big and thirsty.
The article is very specifically about the decline in re-sale value of full-size trucks and large SUVs. Fair enough, it’s clear these vehicles are out of favor. But then you write:
“The demand for pickups and SUVs has virtually disappeared.”
Which is odd to say, because the “crossover” segment is still doing okay (not great, but okay) despite less than stellar gas performance from a lot of the larger crossover models (Ford Edge, GM Lambdas, etc).
Part of what we’re seeing seems to be supply-side shift de-emphasizing traditional SUVs like the Explorer, Tahoe, etc. and simply trying to shift sales over to the CUV.
I also believe many people are shifting to smaller cars out of speculation that gas prices will keep rising. If prices stabilize or go down — or if people simply believe they will — I think it’s likely that people will become more comfortable with the idea of $4.50 gas and will come back to larger vehicles. Even at $4.50, gas is still a relatively inexpensive component compared to the $30-40k people are dropping for a fully loaded CUV which is going to cost them several thousands of dollars a year in depreciation alone.
But right now, a lot of people are afraid next year gas will be $7/gallon and visions of a Mad Max world filled with biker gangs fighting over “the juice”.
Hooray for chuckgoolsbee and wstansti! SUV’s were a ridiculous fad. How could anyone drive one of these huge boxes with extremely high centers of gravity – Oh yes, your 4 wheel drive – every mom needs that! If one enjoys driving, one knows that the lower to the road the more control and driving enjoyment you experience. Most of the huge SUV’s and Dually trucks trying to ram my rear end on the interstate carried but one person – the driver. An incredible waste and good riddance.
The dumb consumers demanded the bad rubbish. The rest of us chose cars… mostly Hondas and Toyotas.
I’m looking at picking up a one or two year old used SUV for the wife – something like a Jeep Grand Cherokee.
I stopped caring about what is stylish long ago – they are just tremendous deals right now. That is why I always drive a Ford Panther platform – best vehicle on the market for the price. I’d get a Panther station wagon if they sold them, but they don’t so an SUV is the next best thing.
As far as the loopholes, Big Brother writes laws to keep the unwashed masses from owning what they truly want, so manufacturers go about trying to fill that need.
The CAFE rules is what brought about the SUV – the law of unintended consequences.
shaker Says: “I wonder where Chekhov’s phaser is?”Girl: “Say, Chekhov, is that a phaser in your pocket or are you just happy to see me?”
SUVs became popular because the deskbound wanted to make pushing paper in the glare of a screen look like work.
And because men don’t trust their wives’ driving skills and want a heck of a lot of metal and stuff around their offspring to prevent the kids being offed. (And forget the fact that an SUV is not the vehicle you want to be in when the hammer hits the hood.)
In Patagonia, some years ago, on the border between Chile and Argentina. My fishing guide told me he and his brother would go up to Santiago (more than 2000km north) when they needed a new car, and pick out one of the SUVs that they knew were good. They’d been driven from garage to school to supermarket to garage and were good as new. But the price was 40% of new and it would last them for years and years.
It’s been a stupendously silly craze.
And I’ve owned two, so I’m silly, too.
Skooter Says:
July 9th, 2008 at 6:41 pm
I think calling SUV’s in general “bad rubbish” is a little silly, don’t you? Don’t forget that just a short time ago these vehicles wre what the consumer demanded.
They may be what “the consumer demanded”, but you should well know that “what the consumer demanded” is not what the consumer needed. Most were pavement queens, never seeing gravel roads, let alone “off road”, not to mention that they were purchased because “I wanted my wife to be safe…”
Well – okay, why don’t you and your wife sign up for a real driving school, rather than purchase a barge… But, I digress…
Skooter Says:
July 9th, 2008 at 7:57 pm
Mt point? Hmm. I’ll go back to say 1984 era. About 24 years ago. There was this product called Ford Explorer. Many (and I mean many) people purchased this truck to haul kids, move stuff, etc. Then came other products like Tahoe, Suburban, Blazer, Durango, 4runner, etc.
Your history is lacking. Before there was a Ford Exploder, there was the Ford Bronco II. Before there was a Ford Bronco II, there was the Chevy Blazer. Before there was a Ford Exploder, there was the Ford F-150, and the “Explorer” was a trim/option package, just like “Silverado” was the glitzy trim package of Blazers and ‘Burbans, about 34 years ago.
And, of course, the ‘Burb dates back to the 50’s, at least, where it was a contemporary of the IH Travelall. If you wanted to pull your Airstream, it was either a ‘Burb or a Travelall…
Now, what is (was?) wrong with the SUV craze? It killed honest, working vehicles like the Toy Land Cruiser. The bloated, blinged and pimped thing Toyota attempts to sell today is a sad caricature of the rugged little vehicle that proudly carried the “FJ” moniker. The FJ Cruiser is at least an attempt to return to an “honest” SUV, but it has horrid visibility (from sitting in it), which is not good out in the sticks. But, the rubber interior and water-resistant seats are a good start in the return to sanity…
And then there is IFS… Not IFS like Trophy Trucks have, but IFS like your car has, with nearly as limited angles on the half-shafts. The former, I lust for. The latter, well, it is fine for the street, but not really for hard core off-roading.
Bruce
limmin
The actress is Celeste Yarnall. She appeared as Martha Landon in the Star Trek episode “The Apple.” From the Wiki:
“Yeoman Martha Landon was a 23rd century Starfleet operations division crew member assigned to the USS Enterprise under the command of Captain James T. Kirk. While serving aboard the Enterprise, Landon was for a time romantically involved with Pavel Chekov.
“In 2267 [when the Volt enters full production], Landon was one of nine crewmembers assigned to landing party that conducted a survey on Gamma Trianguli VI. Landon and Chekov’s open display of affection angered the planet’s natives because love and intimacy were forbidden on the planet by Vaal.” [Alternative episode itle: Vaal is as Sexually Repressed as our Censors]
Ah wait! She ALSO appeared in the Kirkless porn known as the “Star Trek: Of Gods and Men (OGaM).” Its producers described the three-part unofficial mini-series as a “40th Anniversary gift” from Star Trek actors to their fans. “It is not officially endorsed by the owners of Star Trek, but has been covered on the official Star Trek website.”
Bonus points if anyone can tell me how many degrees of separation there are between Celeste and Kevin Bacon. (hint: “Well since my baby left me…”)
Ford’s first use of the Explorer name was in 1969. It was a trim package available (initially) on F100/250’s.
The Explorer nameplate was on the glovebox door (Ford part number: C9TZ-8104460-A) only till 1972 when it was installed on the R/L quarter panels (1972 # D2TZ-9925622-A).
The F Series truck Explorers were not the top of the line models, quite the opposite. The Explorer package was (usually) added to the Custom models, which were the price leaders.
Top of the line: 1965/69: Ranger / 1970/77: Ranger XLT / 1978/2005: Lariat.
The King Ranch is now the top of the line.
There was no F150 till 1975.
The Bronco II was introduced 1983 as a 1984 model.
The Explorer SUV was introduced 1990 as a 1991 model.
btw: Panther platform Station Wagons (Ford: Country Sedan & Country Squire / Mercury: Colony Park) were offered 1979 thru 1991.
I suspect that there are going to be some serious deals out there this winter for SUV’s and pickups. I’m personally watching the prices for pickups, as I would love to buy a slightly used one for cheap as an occasion drive, tow, or haul.
In fact I’m watching several vehicles at nearby dealer lots for the fun of it. Like an Excursion that will be interesting to see if it ever sells?
Stand up if you remember the last time we had this level of shock in the market, remember the 1970’s. Just some of the things folks did back then that they haven’t even started doing this time.
1. Closing off unused rooms in the house to control heating bills
2. Installing insulation, replacing windows with thermo-pane glass, installing solar water heaters and wood stove inserts. Of course today the environmentalists would scream bloody murder if people again begin to burn wood, too much CO2.
3. buying smaller, fuel efficient homes with appliances that used less electricity. I think some folks were able during this time to purchase some really nice older homes in the inner city that subsequently became quite valuable although not as energy efficient.
4. And of or course dumping their big cars, truck and RV’s for smaller more fuel efficient vehicles.
5. Buying a Mercedes Diesel car to get better fuel economy, even it meant paying twice what your trade in cost when it was new. The losses people took back then to save on gas were very large and out of proportion to the amount of $ actually saved. I knew several folks that traded a one year old Cadillac/Buick/Lincoln for less than 50% of what they paid the year before on a smaller car.
6. Car and van-pooling. This was very popular is areas like Los Angeles where I lived in the mid to late 70’s.
By the mid 1980’s most all of these things were forgotten.
good time to buy one!
honestly i cant believe that anyone who bought one of these things didnt know that this was coming.
And I agree with the writer who suggested that owners just slow down a little to save gas – around here, people have not slowed at all – so the same knuckleheads who bought these things in the first place, are now panicing about them, not slowing down at all -taking a bath on getting rid of them.
like i said, a good time to buy.
PS most of the crossovers i see do not get much better mileage than their bloated brothes.
PT Barnum was right…
Just this week I read a story in a Dutch newspaper about Tjechov in a piece about the Sachalin oil fields and now here again (assuming it’s the same guy).
Weird… or maybe not
Anyway, I think the new New Mini diesel is not that bad. The previous one was, that had a Toyota 1.4, but the new one has a PSA/Ford joint developed 1.6 110HP I4 that is sold in about a million different models in Europe, for instance The Cooper D, Volvo C30/S40/V50, Eurofocus, Peugeot 308, Citroen C4 etc.
For the Mini (MINI) it’s quite a good match, it gets very decent mileage and runs quite smooth (strong point of PSA diesels). Obviously it’s not the sportiest engine, but what it should do it does quite well.
chuckgoolsbee: “roof-mounted crumple zones.”
NICE!
Hmm… Vaal and SUV’s; both with voracious appetites — now I see the connection!