CNNMoney.com
Companies Economy International Corrections Pre-market Trading After-hours Trading Winners/Losers/Actives Bonds Currencies Commodities World Markets Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Ask the Expert Ultimate Guide to Retirement Retirement Calculators Rules of Retirement Best Funds Best Places to Retire Fortune Brainstorm Tech Apple 2.0 Blog Big Tech Blog Sectors and Stocks Tech Talk Resource Guide Small Business Makeovers Questions & Answers Small Business Video 100 Best Places to Launch FSB 100 Fortune Small Business Fortune 500 Brainstorm Tech Investing Management C-Suite Rankings Main Create Portfolio Edit Portfolio Create Alerts Edit Alerts

Adapt or die: Future of big SUVs

Large trucks and SUV will still be needed in 5 to 10 years. But they'll need to change.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Peter Valdes-Dapena, CNNMoney.com staff writer

mercedez_benz_gl320.03.jpg
The Mercedes-Benz GL-class SUV has reinforced unibody construction. It is also offered with an optional fuel-efficient diesel engine.

Find your next Car


Autos
36 month new6.71%
48 month new6.84%
60 month new6.88%
72 month new6.12%
36 month used7.17%

Find personalized rates:
 

Rates provided by Bankrate.com.

NEW YORK (CNNMoney.com) -- Until recently, big SUVs had resisted the sales declines hitting their smaller, mid-size brethren. That was because large SUV drivers were hard-core - they really needed interior room and pulling power, and they weren't about to switch to car-like crossovers.

But with skyrocketing gasoline prices, many big SUV drivers are rethinking those needs. Last month, non-luxury full-size SUV sales plunged 41% compared with last year, according to the Power Information Network, which tracks the auto industry.

Big SUVs aren't going to go away. Car companies still need to cater to their customers' needs while satisfying stricter government requirements and consumers' need for better fuel economy.

Here are the steps they'll be taking to make these big vehicles a little easier to swallow.

Offering alternatives

General Motors (GM, Fortune 500) is suffering from a steep sales decline this year, but it'd be even worse without the automaker's Lambda Platform SUVs, which include the Saturn Outlook, GMC Acadia and Buick Enclave. Collectively, they're selling like crazy. The Chevrolet Traverse is coming this fall.

"There's more of an interest in creating products that match each niche within the market," said Sandy Stojkovski of automotive technology consultants Ricardo, Inc.

The Lambdas are car-based crossovers that offer what most buyers want from a large SUV: interior space. With room for three rows of seats, they have plenty of legroom plus space for luggage. For its part, Ford Motor Co. (F, Fortune 500) has just begun production of the similar Ford Flex crossover.

Unlike big truck-based SUVs like the GMC Yukon, the Lambda line doesn't have a separate heavy sub-frame to which the body is attached. Like cars, they're unibody vehicles, where the body is basically the frame that provides stiffness and load-bearing capacity in addition to sheltering the occupants.

Unibody engineering is naturally lighter, so the Lambda SUVs are powered by smaller, less thirsty V6 engines instead of the V8's that power the GMT900 SUVs, the Chevrolet Tahoe and the GMC Yukon. That, of course, means better fuel economy.

But these vehicles don't have everything a large SUV offers: Their lightweight designs and smaller engines aren't good for hauling and towing.

That doesn't mean that unibody construction can never be used in a large, capable SUV. The Mercedes-Benz GL luxury SUV is built on a unibody platform, but it can still tow up to 7,500 pounds, as much as the truck-based Chevrolet Tahoe.

But unibody designs don't work well for pick-up trucks. And SUVs like the Tahoe, Ford Expedition and Toyota Sequoia share their underlying engineering with pick-ups, which means huge cost savings in sharing vehicle platforms.

As current big SUV models age, though, they may be replaced with unibody designs like the GL's. "When you have the opportunity to redesign the vehicle, you have the opportunity to really save the weight," said Sandy Stojkovski of automotive technology consultants Ricardo, Inc.

Leaner power

GM began offering the industry's first gas/electric full-sized hybrid SUVs this year. In city driving, two-wheel-drive versions of the Tahoe Hybrid and Yukon Hybrid get the same fuel economy as a 4-cylinder Toyota Camry.

The Tahoe Hybrid will save its owners about $900 a year in gas, according to current EPA estimates, but it costs about $5,000 more than the comparable non-hybrid Tahoe. Chrysler Corp. is set to come out with its version, the slightly smaller Dodge Durango Hybrid, later this year.

GM also plans to offer a less expensive "light hybrid" Tahoe down the road. It won't be able to run under electric-only power, like the full-hybrid version, but it will still offer a 20% fuel economy improvement at a lower cost, the company says.

Another option will be fuel-efficient clean-diesel SUVs. So far, no Detroit carmaker offers a large SUV with a diesel engine. Mercedes-Benz offers a version of its big GL SUV with a fuel-efficient V6 diesel, though.

The sharply rising cost of diesel fuel has cut into the cost-saving economics, but they still make sense in large vehicles. The GL320 diesel saves its owners about $420 per year compared to the gasoline-powered GL450. Meanwhile, the smaller diesel engine offers more pulling power.

Americans' discomfort with diesel engines will probably mean that hybrids will always be needed, said Mark Williams, editor Motor Trend's Truck Trend Magazine.

"There are diesel people, and they're comfortable with it," he said, "and there are those who are scared to death of it."

Aerodynamics

It might sound absurd to worry about aerodynamics when talking about something the size of a big SUV, but the bigger the vehicle, the bigger impact aerodynamics can have.

The Tahoe Hybrid, for instance has a lowered front end, no fog lights and sharper rear corners for smoother airflow. Even the muffler under the back end of the SUV is angled like a wing to let the air go by.

Some of these changes will find their way onto the regular, non-hybrid SUV in the future. Other companies will be looking to make their SUVs as slick as possible, too.

No matter how fuel-efficient they become, sales of large truck-base SUVs will probably never return to their former levels. Besides higher gas prices, consumers will also have alternatives that might better fit their real needs.

But, no matter what, large SUVs will remain a market that's simply too big to just walk away from. To top of page

Features
Markets Last Change
Dow Jones 10,464.93 50.79 / 0.49%
Nasdaq 2,252.67 15.01 / 0.67%
S&P 500 1,118.02 3.97 / 0.36%
10-year Bond 96 28/32 Yield: 3.75%
U.S.Dollar 1 euro = $1.425 -0.000
December 22, 2009 4:02 PM ET
CompanyPrice% Change
YRC Worldwide Inc 1.13 26.98%
UAL Corp 12.87 11.72%
American Intl Group Inc 31.34 11.69%
US Airways Group Inc 5.13 11.52%
Dec 22 3:53pm ET †
Obama's Main Street favorites President Obama meets often with small business owners, peppering his speeches with their stories. We checked in with 6 entrepreneurs touted by the President to find out how they handle health care. More
Meet the hardest working Santas This is no part-time gig for these St. Nicks. They've carved out a profession warming kids' hearts during the coldest time of year. More
An eyeblink glance at the economy Last quarter, the economy grew by the largest amount since the summer of 2007, but there are signs that things are still getting worse. More


© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy. Advertising Practices.
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.