FEATURE-Some Americans will drive trucks, no matter cost

Wed Jul 2, 2008 8:03am EDT


(For pix click here#a=1)

By Andrea Hopkins

LAWRENCEBURG, Ind., July 2 (Reuters) - Seven women pile out of a massive white Chevrolet Suburban and unload the vacuums, mops and buckets of their trade. Gasoline may cost $4 a gallon, but the Chevy's driver and business owner Leesa Baldwin has no intention of downsizing to a smaller vehicle.

"I love my Suburban. I don't like paying for the gas, but it simplifies my life," said Baldwin, who bought the used 7,000-pound SUV two years ago for her cleaning business and hasn't looked back.

As many Americans abandon SUVs and light trucks for more fuel-efficient vehicles, analysts and automakers alike are scrambling to gauge how low ownership will go -- and just who will remain die-hard drivers of SUVs, pickups and minivans.

"There's always going to be a certain market for these vehicles -- large families, people towing boats or horses. They have a purpose, and only recently became a substitute for passenger vehicles," said Samantha Gross, an analyst at Cambridge Energy Research Associates.

Baldwin represents one core constituency of truck and SUV users -- business owners who cannot do without the cargo space, seating capacity or strength of a big vehicle.

The petite mother of three uses seven workers to clean homes and offices of some 70 clients. She's tried using two cars to transport workers and gear, but it didn't work. One carload might come later and do less work. The second driver had to be paid extra. Workers bickered more.

Plus, the big Chevy with its three rows of seating and wide barn doors at the back loads and unloads easily -- a feature that allows the workers, three vacuum cleaners and assorted gear to disperse with military precision at hourly intervals.

Baldwin puts about half a tank of gas in the vehicle every week -- it cost $71 last time around -- and drives about 40 miles a day shuttling between work sites.

"Buying it was the best thing I ever did," Baldwin said.

SUSTAINED PAIN

Most Americans drove cars until just a few years ago, and only shifted recently to so-called "light trucks" -- which include pickups, with an open truck bed behind the passenger cab; sport-utility vehicles, with an enclosed bed or cargo space; and minivans.

In 1980, just 2 million light trucks were sold annually, about 20 percent of new vehicle sales. By 1990, light trucks made up about a third of sales, and by 2001 they'd overtaken cars as the preferred ride of U.S. buyers.

Light truck sales hit a peak at 61 percent of new vehicle sales in July 2005, representing an annual sales rate of more than 12 million vehicles.

But sky-rocketing oil prices have brought demand to a screeching halt. Light truck sales dropped to less than 48 percent of new vehicle sales in April and 44 percent in May -- the first time they were below 50 percent since 2001. At that pace, only 6 million will be sold in 2008.

In June, sales of domestic and imported light trucks were down 19.4 percent from the same month of last year, the automakers said on Tuesday.

The shift has stunned analysts.

"This really is a watershed period," said Marilyn Brown, professor of energy policy at Georgia Tech. "Consumers are no longer thinking ... 'We'll just wait a few months' and (energy) prices will go down. We're in a period of sustained pain and people understand we've left that era of cheap energy."

Ford and General Motors have both announced plans to shut truck plants and boost product of fuel-efficient cars.

Gauging the future of the SUV and truck market has become the new guessing game. While dealerships are awash with both used and new vehicles, some demand will remain.

Energy analyst Gross thinks a way of measuring that market might be to look where it was before the hunger for horsepower, seating capacity and cupholders really took hold.

"A way to talk about it might be to look back 10 years. That may be a level of base demand for a vehicle that does the kinds of things those vehicles do," said Gross.

Ten years ago, sales of light trucks were about 48 percent of new vehicle sales. While current sales are below that level, Gross said part of the recent decline is likely due to the decline in the housing and building market -- with construction workers idle, new trucks are also unneeded.

"Sales may go up again for this group when housing picks up again," Gross said.

Dallas contractor Bennie Smith, 56, is one such buyer. He tiles floors, and drives a six-cylinder Toyota Tundra pickup.

"I can't do without a pickup. You see all the tools I got," he said, motioning to a huge metal toolbox on the back of his truck. He also pulls a trailer full of equipment, and spends between $200 and $250 a week on gasoline.

"There's no way ... I just couldn't use a little car. I need to haul off trash every time I do a job," he said.

Some recreational truck owners are just as adamant.

Arizona mortgage broker John Stephens uses his big plum-colored Dodge RAM pickup to tow off-road vehicles out to the desert to play. He likes their comfort and space.

As he sluiced gallon after gallon of gas at $4.16 a go into his truck at a Scottsdale gas station, Stephens said he was prepared to make certain sacrifices to improve consumption, such as driving more slowly if the government cut speed limits to save fuel. But he would not consider giving up his truck despite getting just 13 miles per gallon.

"I'd rather see more drilling and more alternative type fuels, anything to keep the price of down," he said.

Baldwin, too, is keeping her Chevy. But she admits the hulking SUV sits in her driveway on the weekends.

"It uses too much gas, so we only use it for work," she explained. "We have a smaller vehicle we use for regular." (Reporting by Andrea Hopkins; Additional reporting by Ed Stoddard in Dallas and Tim Gaynor in Phoenix; Editing by Eddie Evans)




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