DSkippy

http://www.ft.com/cms/s/0310d5b2-e74...0779fd2ac.html

More doom and gloom, funny stat, the SmartCar is only 12 inches longer than the Hummer is wide.

[quote]US trends: A cooling ardour for gas guzzlers

By Bernard Simon in Toronto

Published: March 4 2008 08:23 | Last updated: March 4 2008 08:23

Daimler’s Smart car went on sale in the US for the first time in January, after years of indecision by the German carmaker whether Americans would take to a car just 12 inches longer than the width of the Hummer sports-utility vehicle. It is still too early to tell how well Smart will fare across the Atlantic beyond an initial burst of enthusiasm centred on the main cities. But whatever the future holds, Daimler’s timing could hardly be better.

A combination of high petrol prices – by US standards – a slowing economy, and rising environmental awareness is bringing about what seemed unthinkable a few years ago: a cooling of Americans’ ardour for gas-guzzling SUVs and pick-up trucks.

Sales of even the smallest cars already on the market, such as the Honda Fit, Toyota Yaris and Chevrolet Aveo, were 40 per cent higher in January than a year earlier, according to Autodata, a New Jersey-based market research firm. Meanwhile, demand for large SUVs tumbled by 18.3 per cent, and pick-ups by 7.4 per cent.

In a sign of the times, Toyota’s Prius hybrid petrol-electric hatchback last year outsold the Ford Explorer, which has reigned as the top-selling SUV for more than a decade.

Toyota began selling the Prius in north America in 2000, the same year Explorer sales reached a record 445,000 units. But filling the Explorer’s fuel tank now costs close to $70, against $30 five years ago. Americans bought just 137,800 Explorers in 2007. Sales slid another 19 per cent in January, compared with a year earlier.

The Explorer is not alone. Sales of Toyota’s big Sequoia SUV were down by a third last year. Ford put a nail in the existing Explorer’s coffin at the Detroit auto show in January, unveiling a crossover vehicle, known as the Explorer America, that will be fitted with a new fuel-efficient engine, and will not be offered in an eight-cylinder version.

Crossovers look like small or mid-sized SUVs. But they are based on the same “unibody” platform as cars, unlike SUVs which are built on ladder-like truck frames. They give a smoother ride and consume less fuel, though their towing capability is limited. Crossovers have become one of the fastest growing segments in the US market, with an 18 per cent gain last year.

Pick-up trucks have also lost popularity, though largely because of the slump in the construction industry rather than high petrol prices. While crossovers appear to be permanently displacing SUVs, “pick-up truck sales should come back when the economy and new home construction recover in 2009”, says Erich Merkle, analyst at IRN, a Michigan-based consultancy.

Yet even the pick-up is heading in a greener direction. Toyota showed a concept truck in Detroit, known as the A-BAT, a four-cylinder hybrid built on a car platform. GM’s GMC Denali XT concept, unveiled at the Chicago show last month, is another unibody hybrid.

No matter which way the economy goes, carmakers are increasingly seeking to woo customers with an array of new technologies, including hybrids, diesels, plug-in electric vehicles, biofuels and turbochargers. Under the Energy Independence and Security Act, passed late last year, carmakers will be required to raise the average fuel consumption of their fleets by 40 per cent to 35 miles a gallon by 2020.

Some are describing the new law as a death warrant for the V8 engine. Within days of President George W. Bush signing the bill into law, General Motors put out word that it was canceling plans for a new V8 for its upscale Cadillac and Buick cars (though work will continue on another eight-cylinder engine for its trucks).

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