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Backseat Driver: It's a Brave New World

The era of the SUV is officially over.

As if General Motors' announcement yesterday that it was closing four light truck and SUV assembly plants did not get the point across, May's auto industry sales figures sure do.

As The Detroit Free Press puts it: "America is now officially a car market."

Indeed, for the first time many years, Ford's F-Series truck did not take top spot in sales. It was nudged out by four passenger cars - yes, you guessed them - the Honda Civic, the Toyota Corolla, the Toyota Camry and the Honda Accord.

Auto industry sales overall were off 11 percent in May, but car sales were up nearly 2.5 percent compared to a decline of sales of 24 percent for light trucks and SUVs, according to the Free Press. Car sales accounted for 60 percent of new vehicles sales.

As for the Hummer, get out the shovel. It's sales were off a staggering 62 percent last month. No wonder G.M. also announced yesterday that it was mulling the sale of the unit.

Hummer's travails will be music to green ears to whom the vehicle reflected the epitome of anti-environmentalist sentiment as expressed by G.M. vice chairman Bob Lutz who says he personally thinks global warming is nonsense.

Ford again bested its Detroit rivals in car sales by posting gain of nearly 4 percent compared with drops of 14 percent at G.M. and 28 percent at Chrysler.

Meanwhile, Honda car sales were up 32 percent while Hyundai posted a 26.3% gain, Nissan was up 19 percent and Toyota was up a marginal 0.5 percent.

Times have changed. As a Brit, it always seemed to me sheer folly to ride the gravy train of low gas prices. (I thought the invasion of Iraq was sheer folly too, but what do I know?)

To heck with the environment, to heck with dependence on foreign oil! The monster vehicles that relied on low gas prices reaped massive profits for Detroit's Big Three.

But it was unsustainable. To be sure, the sudden growth in demand from the giant emerging economies in the developing was a totally new variable. But in many areas, U.S. energy and environmental policy has been out of sync with the rest of the developed world.

Now the balloon has burst, prompting what Dick Colliver, executive vice president of American Honda, described as "one of the most profound shifts in automotive buying patterns in more than a decade,"

So we are will adapting, just as G.M. is adapting. But it is certainly a painful process for consumers at the gas pumps and for dealers contemplating crowded lots and little foot traffic.

And hopefully after Jan. 20, 2009, we will rejoin the rest of the world in a coordinated effort to develop sustainable global policies.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 10:22 AM to commentary | Permalink | Comments 0