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Power Information Network Reports: Consumer Demand for SUVs Weakening

WESTLAKE VILLAGE, Calif.--Aug. 1, 20042, 2004--Consumer demand for sport utility vehicles is weakening, according to recent transaction data from the Power Information Network (PIN), LLC. The data show that the number of days SUVs sit on dealer lots before selling has increased substantially over 2003. SUV prices have also declined while average new-vehicle prices have increased, and incentives increased more on SUVs from June to July than they did on any other type of new vehicle.

The number of days SUVs are on dealer lots (days to turn) increased from 60 days in July 2003 to 73 days in July 2004 -- a 22 percent increase. Days to turn for luxury SUVs increased by 47 percent, more than double the industry rate, as these vehicles sat on dealer lots for 50 days in July 2004 versus 34 days a year ago.

Further suggesting a weakening in the SUV sector, the average SUV transaction price dropped 2 percent (or $620) in July versus a year ago, while overall new-vehicle prices edged up slightly. Luxury SUVs exhibited the most weakness, as the average price slid almost 5 percent.

To spur consumer demand, new-vehicle manufacturers increased SUV incentives in July. The average total incentive expenditure per SUV in July was $3,440 -- up nearly 12 percent from June. This increase was almost twice the overall industry average increase.

"The data clearly suggest the SUV segment is under exceptional pressure," said Tom Libby, senior director of industry analysis at PIN. "Higher gas prices and a renewed emphasis on cars by some of the OEMs have both likely played a role in this trend."


PIN's automotive solutions are based on the collection and analysis of daily new- and used-vehicle retail transaction information from automotive franchises. More than 250 details from individual new-vehicle purchase transactions are aggregated, cleansed and analyzed to help dealers, manufacturers, and financial institutions better align sales, marketing and product distribution strategies. PIN's industry-leading automotive solutions incorporate consumer demand and sales information to improve results in product planning, marketing, sales, and vehicle production and distribution processes for its customers including pricing, revenue management, incentives optimization, and vehicle remarketing. PIN is an affiliate of J.D. Power and Associates. Media e-mail contact: or