Higher Fuel Prices Dampen SUV and Pickup Sales

DALLAS – Higher fuel prices, along with increased inventory, have caused resale values to decline for sport/utility vehicles and prompted waning buyer interest in full-size pickups. “We’ve experienced a 2- to 5-percent decline in SUV prices,” said Jay Fahrendorff, vice president of used-vehicle remarketing for Associates Fleet Services in Carrollton, TX. The SUV market has been soft since last November as a result of the mild winter weather. However, what’s surprised resellers has been diminished buyer interest in pickup trucks, which up to now have been selling at a torrid pace. Speculation as to why this has occurred centers on higher fuel prices, along with the recent acceleration of all-new body styles introduced by manufacturers. “In a very short span of time, we’ve gone from SuperCabs to three-door models to four-door models,” added Fahrendorff. “It is reminiscent of the price decline with three-door minivans after the introduction of four-door models.” Despite this, there have been two beneficiaries to higher fuel prices, namely compact cars and minivans. “We’ve seen a renewed interest in compact cars in the wholesale market,” said Fahrendorff. “Likewise, minivans, today, are a very hot segment.” Minivan prices, which were flat during the second half of 1999, have seen an across-the-board price improvement since February. “Dealers are selling all the minivans they can get, which is causing strong wholesale demand,” he added. Prices for mid-size cars, such as the Taurus, Intrepid, and Lumina, continue to remain steady. Despite being its last model-year of production, the Lumina continues to maintain a good percentage of retention. “Lumina sales are very reminiscent of Dynasty sales when that model was discontinued,” said Fahrendorff. “Everyone thought prices would collapse, but instead everyone was pleasantly surprised.”