The Death of the Midsize SUV, Maybe

If there's one truism about car buying, it's that it's almost never rational. Want trumps need. You might say the Toyota Prius disproves this argument, but nothing about human behavior is a constant, nor is Prius-buying solely altruistic. If you haven't seen the South Park episode about the Prius ("Smug Alert"), download it on iTunes for some perspective.

The point is, it is shocking that the biggest "appliance" purchase in our daily lives should be so tied to emotion, not reason. Here's a bit of support for this notion:

1. The sports car. Nobody needs to go from zero to 60 in under six seconds. Nobody needs a car in electric yellow with flames painted on its sides.

2. Cup-holders. One per passenger, sure, but three per passenger? If you had only one place to set your drink, would you miss the other two?

3. The SUV. Early examples were born of need, not want: The Jeep exists because of the need to get around battlefields. Even as recently as the 1970s utility vehicles were largely made for work and were uncomfortable, with rudimentary truck platforms. Adding the "sport" designation—and of course cup-holders—transformed the utility vehicle into the SUV. The rest of the time line, from the mid-1980s through about 2001, looks like this. (I've written it in haiku form as a tribute to the Japanese, because SUVs have put U.S. carmakers behind their Japanese competition in the long run.)

SUVs were Detroit's love

They sold millions. Cars? Who cares!

The H2 is born

Insult to Injury
General Motors' (GM) Hummer H2 is arguably the best-ever example of want stomping need. The H2, based on the Chevy Tahoe platform, has far less interior space than the more sensible Tahoe—and far less cargo space than the more practical Acura MDX. Not that it matters. At first the H2 was a raging success, this despite that fact that few buyers have actually taken it or any other brand new $25,000-to-$60,000 SUV off-roading. Adding insult to injury, the brick-on-wheels, 3.5-ton H2 gets roughly 12 mpg combined city/highway mileage. "Roughly" because a loophole in Environmental Protection Agency regs means that the H2 doesn't require an official rating (that loophole closes soon).

But H2 sales—off 26% so far in 2007—were unsustainable, especially with soaring gas prices. Strangely, though, Hummer birthed the H3 in the face of those increasing fuel costs. Stranger still, the H3 also sold well at first—astoundingly well. This even with mediocre gas mileage (14 city, 18 highway) and a ridiculously undersized cabin offering the same backseat legroom as a Honda Civic. Or if you want to compare the H3 to a more practical car, look at GM's Saab 9-3 SportCombi wagon, the smaller of the two Saab wagons, which offers 30% more cargo room while getting 50% better overall fuel economy.

To be fair, GM is hardly the only company guilty of capitalizing on impractical midsize SUVs. Moreover, the company is starting next year by finally offering hybrid and diesel options to its SUV lineups, which will arguably be a bigger help in reducing the nation's fuel consumption than niche vehicles like Toyota's (TM) Prius.

In fact, if you feel like pointing fingers, Toyota is fair game, too, as its FJ Cruiser is the "tough guy's" midsize SUV flavor du jour. With a manual transmission, it gets 15/18 EPA fuel economy. Meanwhile, Toyota's RAV4 has a bigger interior, gets 45% better fuel economy, and can be had with seating for seven, not five. (Interestingly, sales of the FJ are down 21% this year, while RAV4's are up 31%.) Don't be confused: Toyota's RAV4, Honda's CR-V, Lincoln's MKX, and Saturn's VUE are all good examples of crossovers, which are not the same as SUVs since they ride on far lighter, lower car platforms and therefore get superior fuel economy while simultaneously offering more space-efficient cabins.

It may be that $4-a-gallon gasoline will finally put a spike in the heart of midsize and compact SUVs. Sales of the once-popular Dodge Durango, Jeep Liberty, Chevy Trailblazer, Nissan Xterra, Toyota 4Runner, and Hummer H3 are, collectively, off more than 25% through 10 months of 2007, down 122,052 vehicles vs. this time last year. Meanwhile, sales of more useful, more fuel-efficient crossovers like the Honda CR-V (up 35%), Toyota RAV4 (up 15.6%), and Mazda CX-7 (up 131.4%) have increased by nearly 90,000 units.

So perhaps need is finally getting a leg up on want. But I wouldn't bet on it.