A wave of agile lightweights may edge aside big SUVs

Gas-gulping giants have fans. But look for hatchbacks, and more scaled-down sport utes.

America's love affair with giant gas-guzzling sport utility vehicles may be moving into the slow lane.

Even the heavyweights may eventually inch toward better fuel efficiency. But in the meantime, buyers are already eyeing smaller vehicles - including small SUVs.

Richard Sampson, an independent patent attorney in Boston, says he's ready for a change after driving two Chevrolet Suburbans and a Jeep Grand Cherokee. "SUVs are great when you're going on a trip with the family," he says. "We really need the space. But when you're not, it's hard to beat the practicality of a smaller vehicle."

For his next vehicle, he's looking at small sedans with big engines, such as the Volkswagen Jetta VR6 and the Subaru Impreza WRX. "You don't get that great handling or performance in an SUV. It's time for a change of pace."

For some buyers, it's simply time for a change. For others, it's greater selection, the sputtering economy, or sheer demographics that are causing more buyers to go smaller than at any time since the early 1980s. While overall car sales have fallen about 10 percent from record highs a year ago, small-car sales have held steady. And sales of small SUVs were up 33 percent last month compared with April 2000. "Small cars and SUVs will outperform the rest of the industry for the next few years," predicts George Pipas, head of market research at Ford Motor Co. in Dearborn, Mich.

He's mainly convinced by demographics. The youngest of the so-called "echo boomers," the 80 million children of baby boomers, are now graduating from college and buying their first cars, he says. And for economic and social reasons, young people buy small cars. They don't need much space, often don't have room to house big cars, and find their friends are more impressed by "fun" little cars than comfortable big ones, he says.

Retirees also buy small cars in big numbers because they're on a fixed income, says David Lucas, president of Auto Data, an automotive research firm in Woodcliff Lake, N.J. "These cars are relatively recession-proof," he adds.

Another reason for the boom is an influx of small cars from Korea.

Four new models - the Rio and Spectra from Kia, and the Lanos and Nubira from Daewoo - have come on the market under $12,000 in 2000 and 2001. Counting bigger cars that cost less than $19,000, Korean makers have added eight new cars in the US. Drivers have taken notice. Kia car sales soared more than 79 percent in April; Hyundai's almost 9 percent, compared with a year ago.

Small-car buyers are also attracted to new designs. For example, the Ford Focus and Toyota Echo are vastly improved compared with their predecessors, the Ford Escort and Toyota Tercel. Each has upright seating for better visibility, more legroom, and easier entry and exit. "Small [cars] are offering consumers more versatility and usefulness than ever before," says Mr. Pipas.

Analysts now expect the hatchback to make a comeback. The number of hatchbacks on the market, which has already increased with inexpensive new Korean models, will more than double in the fall. Look for the four-door Ford Focus hatchback, the return of the Honda Civic Si hatchback, the Toyota Matrix and Pontiac Vibe twins, the Lexus IS300 SportCross, and a new Mercedes-Benz C230 hatchback. BMW promises to follow suit with a new hatchback for 2003. The sudden influx is startling: US, European, and Japanese automakers insisted last year that Americans would not buy hatchbacks, because they were considered cheap and boring.

Yet most buyers aren't moving to small cars for financial reasons, experts say. Luxury-car sales are also rising. And many of the hot-selling new small cars are fully loaded or sporty models that cost extra.

For most, better fuel economy won't be a huge factor. Few buyers will sacrifice size for fuel economy, says Pipas. Vehicles owned in the US per household is creeping up from just over two to nearly three. So today's small-car buyers park big SUVs or minivans on the other side of their garages.

While buyers like Mr. Sampson want better gas mileage for bragging rights and social responsibility, the dollar savings are too small to make a difference. Analysts say gas prices would have to exceed $2 per gallon before they would have a measurable effect on Americans' car-buying habits.

The rise of small SUVs, too, is largely a result of available products. This year, the field expanded from four small four-cylinders to seven such models, and will soon be eight. They offer most of the carrying ability of big SUVs and are far less expensive.

While traditional mid-size SUVs have crept up to the $30,000 threshold, small SUVs - even new models like the Ford Escape and Hyundai Santa Fe with powerful V6s and plenty of space and creature comforts -hover around $20,000.

Another hot selling small SUV: The newly designed Toyota RAV4. Consumer Reports rates it tops, even with a slightly underpowered four-cylinder engine.

(c) Copyright 2001. The Christian Science Monitor

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