'Land Yachts' May Be Extinct, But Gas Guzzlers Thrive in US
Bigger is better, or at least that seems to be the rule for today's American auto buyer.
Gasoline prices may be at their highest levels since Iraq invaded Kuwait in 1990, but America's love affair with heavy-duty vehicles appears far from over. Even as Congress mulls a temporary 4-cents-a-gallon reduction in gas taxes, buyers are flocking to bigger cars.
True, the traditional American "land yacht" is nearly as extinct as the dinosaurs they rivaled in size.
Yet in one of the most dramatic shifts in decades, millions of motorists have traded in their sedans and station wagons for minivans, pickups, and sport-utility vehicles. In the mid-1980s, these "light trucks" accounted for barely 30 percent of the overall market. In recent months, they've been nudging 45 percent. And conventional wisdom - backed by future industry product plans - suggests this "crossover boom" won't cool down until light trucks exceed 50 percent.
The gas-pump cost is significant:
For the typical motorist driving 12,000 miles a year in a Ford Explorer, the nation's bestselling "sport-ute," a tax rollback would save about $27 a year. But downsizing to a Ford Taurus would cut $250 in annual fuel costs, and the company's Escort subcompact would yield annual savings of $360.
Given this arithmetic, observers are wondering whether motorists might start rethinking their car buying plans.
It wouldn't be the first time Americans have rushed to downsize in response to a fuel crisis. In 1970, the subcompact segment accounted for a minuscule 9.3 percent of the American new car market. Full-size vehicles, in contrast, claimed a huge 35.6 percent.
The Iranian oil crisis turned things upside down, and 11 years later, subcompacts surged to a record 29.8 percent. Full-sized sedans, coupes, and station wagons fell to just 10.4 percent. But car buyers proved to possess a decidedly short memory. As soon as things started to stabilize, they started trading in on larger cars again.
"Given a free economy ... and plentiful [fuel] supplies, ... people want to be in a full-size vehicle," says Ford Motor Company brand manager Paul Morel.
That's not to say the industry has gone back to its old ways.
One of the few remaining really large sedans, the Chevrolet Caprice, will be pulled from production this summer. That decision reflects federal rules as well as consumer demand, as manufacturers struggle to meet the government's stringent corporate average fuel economy (CAFE) standards.
CAFE is a sales-weighted average for the fuel economy of all the different models a manufacturer makes. There are separate standards for cars and light trucks.
As the land yachts dwindle, people who want full-sized transportation haven't been abandoned. Minivans, pickups, and sport-utes, all in the light-truck category that has lower CAFE standards, have proliferated.
Could the current fuel crisis dampen the light-truck boom? These vehicles tend to be heavier than comparably sized passenger cars. They're also less aerodynamic. That translates into markedly lower fuel economy.
An Explorer with a 4.0 liter V-6 engine and automatic transmission delivers just 16 miles per gallon on city streets, 20 m.p.g. on the highway. A Taurus with a comparable passenger compartment gets 20 m.p.g. city, 29 highway. And since Taurus is lighter, it gets better performance with its smaller, 3.0 liter V-6. And the newly redesigned Escort, due out this fall, will average nearly 10 m.p.g. better than the Taurus.
One might expect such a wide mileage gap to have an impact on the market. Despite Washington's election-conscious effort to cut the fuel tax, consumers, many of whom favor big cars for safety and load-carrying benefits, don't seem ready to make any major moves on their own.
"We have not seen any dramatic change," says Mr. Morel, "and we watch this closely."
Indeed, auto analyst William Pochiluk of Autofacts Inc., a research firm in West Chester, Pa., does not expect to see much of an impact - unless there's an unexpected shortage of fuel supplies, a highly unlikely scenario. The reality, Mr. Pochiluk says, is that fuel prices could go up as much as 50 cents a gallon without doing much to change the market mix.
"In a world where the cost of bottled water is higher than gasoline, people really downplay the issue of operating costs," he says.
That's not to say the subcompact market is collapsing. Indeed, it's actually gained some market share in recent years, from 18.6 percent in 1990 to 23.2 percent in 1995. That partly reflects habits of younger buyers for whom subcompacts are an affordable alternative to used cars.
That's one reason, says Mercury marketing manager Carl Bergman, why it's "vital" that carmakers continue to develop competitive new entries for the subcompact segment. If buyers like what they see, Bergman says, they will "keep coming back for more" from the same manufacturer as they become more affluent and move into larger vehicles.
Some observers, meanwhile, would like to see Congress raise, rather than lower, the fuel tax. They see it as helping to solve several problems. It would raise money to balance the budget deficit, help cut emissions of carbon dioxide, and reduce America's reliance on foreign oil.
But for the moment, short of a truly serious fuel shortage, Americans are likely to just grumble, and continue fueling up their big cars and trucks.
In the longer-term, though, there may be a solution to satisfy everyone.
The Big Three US carmakers and the federal government have teamed up in an unusual consortium to develop a vehicle that will deliver close to 80 miles a gallon. This Partnership for a New Generation Vehicle, commonly called the "supercar program," aims to combine fuel-efficiency with a body as roomy as today's typical family sedan - and a similar price.
Plans call for the first supercar to emerge in about a decade.