Big cars make a comeback

With fuel prices down, sales of SUVs and light trucks in the US are back up.

The US has always had a love affair with big cars. And thanks to declining oil prices, the romance is being rekindled.

New Jersey resident Jennifer Nigro is representative of the trend, reports The Fiscal Times. In November, she traded in her fuel-economizing Chevrolet Malibu, bought in 2011 when gas prices were higher, for an Equinox SUV. With gas prices falling, "SUVs went back onto our radar," she says.

Sales confirm the trend. The compact SUV segment, which is General Motors’ bread and butter, "is on fire," says Steve Majoros, Chevrolet's director of marketing. For the first time since 2011, light trucks outsold cars in 2014.

After hitting an all-time high of 25.8 miles per gallon (9.12 litres per 100 km), the average fuel economy of cars sold in December fell back to 25 mpg (9.4 litres per 100 km), according to the University of Michigan's Transportation Research Institute. In December alone, GM sold 50,000 Chevy Silverados.

Car manufacturers are keen to satisfy the trend. IHS Automotive analyst Tom Libby told The Fiscal Times in January that they would “skew things towards emphasizing performance and de-emphasizing fuel economy" at the North American International Auto Show in Detroit.  He pointed to a dozen vehicles to be unveiled at the show that were either SUVs or performance versions of cars.

But fuel economy is not totally passé. While in pre-recession shows manufacturers boasted power and luxury exclusively, now they promote fuel efficiency across the board, even in their bigger and higher-performing models.

The flip side to this development is that consumers can find good deals on small, fuel-efficient cars since dealers need to clear space in their showrooms for the heavier vehicles.

About the Author

Yan Barcelo


Yan Barcelo is a journalist in Montreal.

comments powered by Disqus

Highlights

Canada is celebrating its 150th anniversary. We’re celebrating you, Canadian CPAs. Tell us why you’re proud to be a Canadian CPA. Then watch for our big celebration in July.

Gain practical organizational insights and learn from industry experts at this annual event for not-for-profit financial leaders.