Are small cars poised to replace SUVs?
Wednesday, May 14th, 2008It’s no surprise that with gasoline prices threatening to reach $4 a gallon, Americans are looking at fuel economy as never before. Most of us could not afford to keep a Hummer gassed up these days, and automakers are starting to shift their production and advertising to reflect this sad fact. They are reaching out to consumers with targeted ads, new technology, and clever marketing strategies that acknowledge new values in a slowing economy. So far, it seems like we’re taking the bait.
Even as auto sales in general fell, sales for some compact, fuel-efficient vehicles rose dramatically. As a recent Wired article reports, “Ford’s own Focus, which starts at $14,395, has seen its sales pop by 32% from a year ago. The Honda Fit ($13,950) has jumped 54%. And the Toyota Yaris ($11,350) has spiked 46% year to year.” Sales are up by such large margins not only because of their relatively low MSRPs, but also because it costs less to keep them running. At the same time, sales of pickup trucks and SUVs have plummeted. GM has reported a 25% drop in truck sales.
Small vehicles are breaking into the market in a big way. As this CNN report suggests, many micro-cars which have long been popular overseas are making their way into the U.S. market. The most note-worthy of these is perhaps the Smart ForTwo, an almost unbelievably compact commuter car. ForTwo gets incredible gas mileage and can be parked almost anywhere. In addition, many fears about safety are likely to be calmed by recent crash testing. The Insurance Institute for Highway Safety (IIHS) has given Smart ForTwo top marks for frontal crashes. With safety, fuel economy, and environmental responsibility on their side, small cars are becoming increasingly popular with U.S. drivers.
This shift in values is reflected in recent advertising trends. Gone are the sexy spots featuring SUVs driving through mud puddles and pickups pulling semis. Commercials seem to concentrate on fuel economy, price, and special offers and rebates. Many manufacturers are hyping their environmental policies as well, as this SuperBowl 2008 spot from GMC typifies. The ad features a new hybrid Yukon, which I suppose is meant to bridge the gap between America’s love affair with massive cars and their need to save money. A Honda ad also exploits this trend, showing its fleet weaving in and out of gas pumps without needing to stop.
Auto companies are also adding new sections to their websites to convince environmentally-conscious consumers to purchase their vehicles. Ford’s “Our Values” section describes the company’s initiative to turn paint fumes into energy, along with other green policies they’ve adopted. They even sell carbon offsets through a third-party called TerraPass, which allows Ford drivers to support clean energy projects. The site also hosts suggestions and tips for maximizing fuel efficiency, like maintaining tire pressure and driving smoothly. Subaru, which has gained the loyalty of many green drivers, is also hyping its environmental record. They operate a “clean plant” which is certified by the EPA, and also market Partial Zero Emissions Vehicles (PZEVs), which have gained recognition in the EPA’s Green Vehicle guide.
While not everyone is ready to trade in their gas guzzlers just yet, the trend is definitely toward more efficient and economical cars. As with any inflationary period or economic slowdown, the situation could very well be short-term and temporary. But maybe, just maybe, Americans will fall in love with compact, green cars the way European and Asian drivers have. If a true cultural shift is in the works, then the prices at the pump will be a little less stressful for everyone.
By Haley January Eckels
