DETROIT -- Affluent consumers appear to be growing weary of truck-based luxury SUVs.
U.S. sales of traditional body-on-frame SUVs from luxury brands dropped 24.2 percent in May.
Sales of the Lincoln Navigator, for instance, fell 32.0 percent from May 2004. The Cadillac Escalade dropped 41.0 percent, and the Lexus GX 470 declined 12.9 percent.
Until now, luxury SUVS - among the auto industry's most profitable vehicles - largely had been immune to the sales problems of mainstream SUVs. Rising gasoline prices and a customer shift to car-based sport wagons hurt mainstream SUVs through the spring.
But the tide may be turning. High-ticket buyers also are embracing sport wagons, also called crossover vehicles.
George Pipas, Ford Motor Co.'s sales analysis and reporting manager, says consumers' preference for car-based sport wagons is the strongest factor in the decline of luxury SUV sales.
"Why wouldn't you expect to see some of the same developments in this segment that you do in the other segments?" Pipas asks. "The boomers are buying them, and the boomers are getting older."
A study by the Power Information Network, a division of J.D. Power and Associates, supports that notion. Almost 20 percent of traditional luxury SUV owners who purchased or leased new vehicles in April switched to crossovers, J.D. Power reported.
Power also said automakers increased customer cash rebates for traditional luxury SUVs by 5 percent in April. Overall, industry rebates declined in April.
Though higher gasoline prices have hurt mainstream SUV sales, the price spike is less likely to play a role in the luxury segment, Pipas says. Buyers who can afford a $50,000-plus luxury SUV probably can afford $2.25-a-gallon gasoline.
While the May decline is striking, one month's data are insufficient to prove a steep long-term drop in luxury SUVs, Pipas says.
But the falloff is painful for automakers. Luxury SUVs contribute rich profits. For instance, luxury SUVs deliver an estimated $8,000
in operating profit per vehicle to General Motors, according to a report by Goldman Sachs analyst Robert Barry.
And the segment had grown strongly, from 98,672 U.S. sales in 2000 to 208,975 last year.
Though reluctant to draw any conclusions from May, Jack Straub, a Lincoln-Mercury dealer in Keyport, N.J., acknowledges the luxury SUV slowdown.
"I don't think it's any secret," he says. "In fact, it was anticipated."
Straub points to Lincoln's plan to replace the Explorer-based Aviator next year with a model based on the Mazda6 - a move from a truck-based SUV to a car-based sport wagon: "As far as Aviator, Lincoln Mercury is looking like it did the right thing."
May's decline in luxury SUV sales wasn't felt by all dealers. Ed Williamson, a Cadillac dealer in Miami, says his Escalade sales rose by 16.7 percent in May.
But he says the Escalade's share of his total Cadillac volume has declined in the past 18 months.
"We're selling a truck that's getting toward the end of its life cycle," Williamson says.
"All models, as they get to the end of their life cycle, the volume tends to slip."
Not every nameplate faded last month. Sales of the Hummer H2 and Land Rover LR3 remained healthy in May. And although sales of the Infiniti QX56 declined 7.3 percent in May, they are up 68.0 percent through the first five months of the year.
Jason Stein contributed to this report
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