May was Carmageddon.
It was an off month for U.S. auto sales overall -- down 6.1 percent in a month short on weekends and selling days -- but a bloodbath for passenger cars.
Across the industry, light trucks eked out a 2.4 percent gain, but cars plunged 16 percent.
Certainly, nobody’s shocked that consumers are buying fewer cars and more crossovers, SUVs, pickups and vans: Cheap fuel, more room, scant difference in fuel economy, scads of attractive new crossover and small SUV models. Old fashioned sedans long have been bleeding market share.
But May was the month consumers voted with their wallets. The inflection point was so sharp it reminded me of another May.
That was in 2008, when a volatile mix of skyrocketing gasoline prices, worry and slumping auto sales detonated and knocked large pickups off the top of the sales chart. Over 31 short days, the Ford F-150 toppled from perennial No. 1 to No. 5, supplanted by the fuel-thrifty Honda Civic, Toyota Corolla and Camry and Honda Accord.
May 2008 crystallized a major shift in what vehicles Americans wanted: more cars in a down market.
Eight years later, it seems clear the market is headed almost exactly the opposite direction: fewer cars in an up market.
It’s never quite that simple.
That May 2008 rush to fuel-efficient cars seemed profound as fuel climbed toward a July peak above $4 a gallon, but didn’t last out the year. By December, the crashing economy pushed gasoline prices to $1.59 and passenger cars were just cheaper than gas-guzzling trucks headed into the Great Recession.
But in 2016, passenger cars could be relegated to a long stretch on the second-string squad.
It’s not just cheap fuel, though the Department of Energy expects low gasoline pump prices to last beyond 2017. Fuel still counts, just not as much. Fuel economy has improved across the board so much that the operating costs, especially for fuel, of crossovers, SUVs and other light trucks are barely more than that of sedans.
And the greater utility just overwhelms the equation. Carry more people in greater comfort, carry more stuff and sit up nice and high to see over the top of sedans and hatchbacks.
“Once people get used to the greater functionality of [light trucks], the difference in fuel cost compared to a car is a rounding error,” says TrueCar analyst Eric Lyman.
Manufacturers are reading the writing on the wall. Fiat Chrysler CEO Sergio Marchionne has already said the automaker will outsource future small car design and perhaps manufacturing. General Motors will drop the Buick Verano in the U.S. market for 2018.
And Lyman sees evidence that suggests manufacturers are not pumping up incentives to keep low-margin cars moving but allowing some car models to seek their own sales levels.
Whatever the cause, cars did poorly in May.
At Ford division, truck sales rose 8.9 percent and utilities lost less than 1 percent, but cars plunged 26 percent, with each of Ford’s six car models down at least 22 percent. Even cops wouldn’t buy cars in May. Ford Police Interceptor cars fell 24 percent to 766 units, but Police Interceptor utes rose 17 percent to 2,977 units.
At the Toyota brand, cars were down 19 percent, but SUVs rose 4.2 percent. At Nissan, the Altima lost 16 percent while the Rogue crossover gained 5.9 percent and came within a thousand units of replacing the Altima as the brand’s top seller.
At FCA, the fifth best selling Jeep model, Renegade, handily outsold any passenger car model the automaker makes.
Despite the quirky calendar May fizzle, U.S. auto volume through five months is 1.1 percent ahead of the 2015 pace. U.S. auto sales still have a good shot at topping last year’s record, but trucks clearly must carry a limping car side over the hump.