Sales of sport utility vehicles ran out of gas in September, giving General Motors and Ford dismal results for the month while the Chrysler Group and major Japanese brands gained ground.
With gas prices topping $3 a gallon in most parts of the country, sales of Chevrolet's full-size Suburban and Tahoe fell 56 percent last month. The Ford Explorer and Expedition were down 58 percent and 61 percent respectively as buyers migrated to more efficient "crossover" SUVs and passenger cars.
For the industry, sales fell 8 percent last month to 1.3 million vehicles. Passenger car sales were up 6 percent, but light trucks (including SUVs, pickups and vans) were down 18 percent.
The dive in truck sales hit hardest at GM, where sales plunged 24 percent to 344,797 vehicles, and Ford, which fell 19 percent to 228,157.
Chrysler sold 175,556 vehicles, up 4 percent, with a 26 percent jump in car sales offsetting a 2 percent decline in trucks.
Analyst Rebecca Lindland of research firm Global Insight said gas prices weren't the only worry that steered shoppers away from gas-guzzling SUVs.
"Gas prices are certainly influencing what people buy, but there also is the uncertainty of energy prices overall," she said. "That's an unanswered question. Consumers don't know how much they will pay to heat their homes this winter."
The industry faces more uncertainty because employee-discount sales, which began in June and ended yesterday, may have drained the pool of potential buyers, she added. "There's a finite pool of buyers every year, and all the buyers came out of the woodwork in the summer," she said. "Who are they going to sell to this fall?"
GM and Ford predicted yesterday that sales would be soft this month but would rebound by late November. Global Insight, however, sees slow sales through December.
"The backlash is going to be longer than 60 days. Our forecast is that the hangover lasts until the end of the year," Lindland said.
Among factors that helped Chrysler was that it had a greater supply of 2005 models like the Dodge Ram full-size pickup, while inventories at GM and Ford were largely depleted in August.
Chrysler also spent the most on incentives last month, $3,353 per vehicle, according to consumer Web site Edmunds.com. Ford spent $3,089 and GM $3,068.
Toyota, Honda and Nissan posted double-digit increases, and all reported record September sales because of surging interest in passenger cars. Car sales were up 22 percent at Toyota and Honda and 26 percent at Nissan.
Despite plunging sales of SUVs, GM market analyst Paul Ballew said buyers aren't bailing out of models like the Tahoe and Suburban and switching to fuel-efficient models.
"That really oversimplifies what's going on in the marketplace. We're seeing more interest in fuel economy, but there's not the shift we saw in the late '70s and early '80s," he said, referring to the energy crisis that prompted consumers to dump large vehicles.
Ballew said GM's large, truck-based SUVs are also getting hurt by the growing number of car-based crossover models and because they are near the end of their life cycle.
Referring to J.D. Power and Associates data, Ballew also said GM reduced incentives last month by $1,500 per vehicle compared to a year ago. Neither GM nor Power would say how much GM spent per vehicle, but Power confirmed the $1,500 reduction.
GM, which lost $1.39 billion in the first half, will introduce a new generation of large SUVs early next year that it is counting on to boost revenue. Ballew refused to give sales projections. "We'll see how things play out," he said.
However, Ford sales analyst George Pipas said dwindling sales of traditional SUVs is "becoming the norm, and we expect that to continue."
Ford released a redesigned Explorer last month, but Pipas doubts that new styling and features will boost sales in 2006.
"A good sales year in 2006 might be to match 2005," he said. Explorer sales are down 24 percent through September, to 197,000.
Lindland said the decline in truck-based SUVs reflects that, with pump prices of $3, fewer consumers buy them as fashion statements, which drove SUV growth during the 1990s.
"There is still demand for those products, but what's going away is the `I want it' element. Now, it's consumers who need them for the towing or four-wheel-drive capability," she said.
GM's employee discount offer ended Friday, and Ford and Chrysler ended theirs yesterday. Now, all three are shifting to a "value pricing" strategy that is supposed to sell the virtues of the vehicles instead of the deal of the month.
GM is taking the deepest plunge into value pricing, adding standard features to dozens of models while cutting the base prices. That strategy is designed to bring sticker prices closer to transaction prices, reducing the need for costly incentives.
GM's sales soared 47 percent in June and were up 15 percent in July but fell 13 percent in August as inventories were depleted and Ford and Chrysler offered similar deals.
Rick Popely writes for the Chicago Tribune.