Wednesday, June 04, 2008

Death of the SUV: Demographics Count!

There is inadequate consideration of the cause of deteriorating SUV sales.

One element which has not been considered is simple demographics. It's a fact that the Baby Boomers no longer have their children living at home with them (by and large), which reduces the "need" for multi-passenger vehicles capable of dragging kids, boat, trailer, and umpty-bags of luggage from Point A to Granny's house.

In other words, there is less "need" for land-yachts for the 50-60-year-old set.

Some car-stats type could probably define the numbers affected by this change.

In addition, there are many folks who purchased SUVs who simply did not "need" them, but liked the size, or weight, or the ability to see over the traffic which SUVs provided. But that "need" was a lot more fragile than the "need" to buy food rather than fuel.

Some car-stats type could probably define the numbers here, too.


Headless Blogger said...

Dad - Good thoughts in your post.

I've long believed that the host of reasons given for SUV purchases (the need for room, safety, weather handling, etc.) were rationalizations (the 3rd strongest human urge).

Most people bought SUVs for ego fulfillment and to be one of the crowd. The same reason they dumped their sedans for minivans 10 years earlier.

Fuel economy is "in" once again. And I am setting a trend, for a change.

John A said...

If changing demographics are an issue here, Detroit surely should have known that. It takes 20 years for kids to grow up and leave the house, and the boomer generation is the most heavily market-researched group in history. That's a completely predictable trend.

(Among other "out there" boomer trends... We're going to need a lot more estate lawyers in about 20 years. Nursing home staffs will be overwhelmed. We'll see more septugenarian action stars. Whatever the next music technology is, the White Album will be one of the first things available.)

If GM didn't see that trend coming and react to it appropriately, they got what they deserved.

So, while I agree that demographics may have had an impact in declining sales (though not a major one), GM should have planned for that.

Dad29 said...

John, SUVs were so damn profitable that cutting back on them would have been VERY difficult to do. When your Presidency rests on profit expectations, you build profit expectations.

But yes, GM woulda/shoulda/coulda known and acted earlier.