Record petrol prices have seen Americans cut their purchases of sports utility vehicles (SUVs) by so much in the past six weeks that they have forced the US car industry into a massive restructuring program to try and stay alive. But it’s a different story in Australia.

Sales in the US of these big petrol guzzling vehicles made by Ford, Toyota, Nissan, Honda, General Motors and Chrysler have fallen sharply. The falls have been heaviest though for Ford, GM, Chrysler and Toyota as the cost of petrol reaches $US4 a gallon level for regular fuel and to well over $US4.30 a gallon for diesel.

So sharp has been the fall in demand from May onwards that Ford and GM have been forced to go on a diet: cutting production, delaying new models, closing factories making these vehicles and start laying off workers while they move to boost production of smaller and more fuel efficient cars. Falls of 20% to 30% in sales of the SUVs and the equally thirsty pick up trucks, were reported in May and triggered the dramatic moves from Ford and GM.

Yesterday GM cut production of its SUVs by a further 170,000 vehicles as the sales slump continued into June: and the company also announced zero financing for some cars for six years to try and move unsold models.

What about Australia?

In contrast to the 20% to 30% fall in the US, sales of SUVs here at home were a sedate 4% lower in May in seasonally adjusted terms, compared to April. Sales of these vehicles peaked in January and have been easing since.

But more SUVs were bought  this May (17,002) than in May of 2007 (15,934), despite fuel prices being significantly higher.

Figures from the Australian Bureau of Statistics show that total car sales in May fell to an eight month low, but May’s figure was still 2.6% up on a year ago. In America, total American car sales are falling and look like ending up the lowest since 1994. Whereas the Australian industry expects our sales to top the million vehicle market for a second year in a row, although a slowdown from now on is expected.

Peter Fray

Inoculate yourself against the spin

Get Crikey for just $1 a week and protect yourself against news that goes viral.

If you haven’t joined us yet, subscribe today to get your first 12 weeks for $12 and get the journalism you need to navigate the spin.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW