Another bubble bursts
Bob Morris @ May 7th 2008 19:21 - Category: Unfiled
This one is SUVs. Owners are trying to unload their gas-guzzling behemoths.
After paying $75 to fill his black Dodge Ram pickup truck for the third time in a week, Douglas Chrystall couldn’t take it anymore.
“The SUV craze was a bubble and now it is bursting,” said George Hoffer, an economics professor at Virginia Commonwealth University whose research focuses on the automotive industry. “It’s an irrational vehicle. It’ll never come back.”
Detriot, and particularly Ford, delighted in making SUVs because the profit margin was so large. Meanwhile, Japanese automakers concentrated on smaller, more economical cars. Detriot made the same error in the 70’s too. I guess they never learn.
Large trucks can be designed to be considerably more fuel-efficient. And we certainly need large trucks. But not for hauling around soccer moms.
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