On July 19, the "Dallas Morning News" was reporting on a new challenge faced by GM's assembly plant in Arlington, Texas. The concern? Making sure the facility's award-winning quality efforts didn't flag, despite the fact workers had been putting in overtime to meet increased demand'”for the entire year. And this surging demand for large SUVs isn't limited to GM products. A more recent story in "USA Today" details how sales numbers for big SUVs like the Chevrolet Suburban are outperforming both the industry in general and the demand for small cars.
In fact, the figures on the Suburban are startling: Sales in June were up 99.7 percent, boosting the vehicle's year-to-date improvement to 50.5 percent. Plus, as impressive as that performance is, it actually lags that of the Suburban's Professional Grade sibling, the GMC Yukon XL. This big boy was up 105.8 percent in June and 57.9 percent through the first half of 2010.
The volume numbers are worth peeking at as well. The two SUVs combined to sell a tad over 6,000 vehicles in June; that represented just a bit over 3 percent of GM's total sales for the month, but it's not an insignificant number when put into context.
The Hyundai Tucson small crossover, considered a nice success, only moved 3,382 units in June; the all-new Ford Taurus outsold the Suburban/Yukon XL duo by just 434 units. The General's own Buick LaCrosse, which sizzled its way to a 173.7 percent June sales leap, was outperformed volume-wise by the SUVs to the tune of 6,173 to 5,376.
Looking at other automakers, sales of the Nissan Armada were up 116 percent in June and 108.7 percent through June. Also doing very well are the Ford Explorer and Ford Expedition, which have each seen sales grow by more than 30 percent in the first six months of 2010. And let's not forget the large crossovers, sales of which were combined with those from "real" SUVs in the "USA Today" piece.
The GM trio of the Buick Enclave, GMC Acadia and Chevrolet Traverse have all seen sales increases of more than 25 percent for the first half of 2010, and remember, this is against an overall industry increase of about 17 percent. Filling in the rest of the gaps here, the "USA Today" pegs the increase in the small-car selling rate at about 14 percent through June, and that of big SUVs at 19 percent.
So, what's going on? It's an oft-told story: For a significant number of U.S. drivers, the preference in almost all things automotive is "the bigger, the better." Of all the vehicles I've called out here as having big sales bumps, the smallest is the Ford Explorer, at 193.4 inches.
All the rest of my examples are up over 200 inches long, with the Yukon XL and Suburban stretching to more than 222 inches. For comparison's sake, a popular small-car like the compact Honda Civic comes in at 177 inches. That's a 3.75-foot difference. Of course, the price tags involved show an even bigger difference. The MSRP on the Civic is just under $16,000, while the Suburban begins at $40,000+.
On the other hand, the capabilities range is at least as big. The Suburban can seat nine people in relative comfort; the Civic, four. The cargo volume on the Honda is rated at 12 cubic feet, the Chevy maxes out at 137.4. Even the "small" half-ton Suburban can tow 8,100 lbs.; the Civic, well, let's just say that it can't.
But the biggest factor driving the sales of these big vehicles is undoubtedly the relatively small amount of money that must be paid to keep them running. Sticking with the numbers used in "USA Today," the average price per gallon for regular fuel is currently about $2.75 today; two years ago, following a spate of hurricanes in the Gulf of Mexico that had shut down oil production there, the average price reached a record-setting $4.11 per gallon.
With that factoid in mind, it's no wonder large SUVs are reaching such high sales increases lately.