Are SUVs Making a Comeback?

August 4, 2010

Automakers are busy with plans to introduce a fleet of smaller, more fuel-efficient cars in the coming months---cars like the 2011 Chevrolet Cruze, 2012 Ford Focus, and the 2011 Hyundai Elantra.

Sales numbers from this year could give them pause, as the results for this year show a surprising trend. The fastest-growing segment in auto sales is now sport-utility vehicles.

According to our pricing partners at TrueCar, sales of mid-size and luxury SUVs are rising faster than any other type of new vehicle this summer.

TrueCar's research of sales rates includes a measure of days of inventory. Automakers gauge the speed of selling a new car once it reaches the showroom in this way, and TrueCar says that some new sport-utes are spending very little time on dealer lots.

Industry-wide, TrueCar reports manufacturers this month are sitting on an average of just 31 days' worth of model-year 2010 luxury SUVs, and 34 days' worth of more affordable mid-size sport-utes. In fact, of the ten 2010 vehicles in shortest supply, nine are SUVs ranging in price from the affordable Toyota RAV4 (16 days' supply) to the luxurious and pricey 2010 Audi Q7 (15 days' supply).

Small cars are averaging 79 days' supply; only vans are selling more slowly. Those numbers for small cars include many vehicles that are in their final model years and some even being sold by brands that are on their way to the scrap heap, like Pontiac.

Small cars still are outselling SUVs overall.  According to Autodata, Americans bought 974,000 small cars in the first six months of 2010, compared to 121,000 SUVs.

For shoppers, this means a very careful approach is mandatory when negotiating the price of a desirable new SUV. TrueCar says you should expect to pay close to full price for a Chevrolet Traverse, GMC Acadia or Land Rover LR4, for instance.  But there are still deals to be had -- the arrival of the 2011 Jeep Grand Cherokee, for instance, means that leftover 2010 Grand Cherokees are selling for an average of 20 percent below MSRP.

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