Are SUV Sales Going To Be The Next Dot Com Bubble?

Keeping in mind that I read this article after just two hours of sleep, I think the author is missing the mark here. He states that major car companies are dumping all of their R&D budgets to developing/expanding their SUV lineups. I don't believe that to be true. The only companies that seem to be going the SUV-primarily or SUV-only routes are the ones that have never had strong, competitive sedan offerings or sales (Suzuki and Mitsubishi mentioned). He also stated how VW is focusing on a 7-seat SUV vs. their two primary sedans. Well, the fact is, the 7-seat SUV market is huge and they NEED an offering in that arena, one that should have been introduced about a decade ago. Not to mention that VW already has a new Passat for non-NA markets (not sure if it's on sale yet), and I'm sure the NA-market car will be forthcoming.

The other reality is that the SUV market may not grow 10% per annum, but it's not going anywhere anytime soon, either. Just like with dot coms, the strong, relevant players will continue to thrive while those that offer inferior products/services will be gone.

Written by someone young who likes to sit down low in a sporty car. However that huge group of baby boomers, who also once liked to ride that way, now with stiffer joints and declining vision likes to easily get into something and sit up high and still have a clear windshield when they pass a truck in the rain. Ergo, and SUV, crossover, albeit not necessarily a huge one. Plus they have money to by one. The younger generation spends their money on things other than cars. The tall vehicle will continue to grow.

It all depends on the price of pump gas. If grease ball oblamer gets his way, he and the corrupt democrats will some how tax gas big time.

Interesting comment since my state government just raised gas taxes 10 to 40 cent's, Republican governor, veto proof Republican house and senate, reddest of red state. So go figure.

Crossovers and cars are too similarly priced that you might as well pay the extra couple of grand for a larger, heavier vehicle and sacrifice some mpg.

Impreza wagon and XV are about $2000 different in price and equipped the same. Americans will take the bigger choice because we're gluttonous.

Article is crap.

@HughJass: Yes, North America has an obesity epidemic. Car makers have widened car seats by more than an inch and a half in recent decades to account for broader posteriors. That could be one reason for SUV popularity.

The weak analogy of the Dutch tulip bulb mania and stock market bubbles is one in which the price of a thing (tulip bulb, corporate share) is bid up to insanely high levels by a shared belief that because others are willing to pay insanely high prices, those prices reflect actual (not perceived) worth, and I also want to get in on it, so I'll bid "current price + 1" to get in on it. This then contributes to the price increasing still further.

The price collapse happens when a substantial number of people start dumping their bulbs or shares in a profit-taking move, thereby shaking the confidence of other buyers that the insanely-high price will continue to increase. This results in a massive sell-off and a price collapse.

There is *MO* parallel between this and SUVs because the price of SUVs are not being bid up to insanely high levels, like tulip bulbs or shares in a "stock market sweetheart" stock. SUVs are just cars, in a different form factor.

Do you believe that lots of people are buying SUVs just because it's the popular thing to do, like lemming masses? Or are some people discovering that a higher, more upright seating position, with more passenger volume and cargo volume have some advantages over a sedan?

A shift will likely occur when fuel prices return to their previous highs. The vehicles that suffer will not be all SUVs, but rather, those with poor fuel economy. The same will apply to other vehicles with low fuel economy. So this won't be an SUV bubble, but rather, a collapse in demand for vehicles that have poor fuel economy.

Another heady existentialist article from Autospies.