“Hatchbacks on stilts.” Why SUVs are an arms race we must stop

There’s a lot of talk about how Australians are buying smaller cars, and how Australian car makers are stupid for pushing on with big petrol-guzzling cars nobody wants.

But Australians do want big petrol guzzling cars. They just want them to be tall.

The SUV category is going crazy. In April 2004, 12,351 SUVs were sold. By April 2014 monthly sales had doubled to 25350.

Meanwhile, “passenger vehicles” – your classic sedan, sold fewer. April 2004 saw 44,000 sold, but by April 2014 sales shrank to 39,000.

In 2014, even as the car market is having its worst year for a decade, SUV sales are creeping up.

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When people buy an SUV, they’re purchasing the ability to go off road. Right?

Not if you look at the details. Companies are pushing out two wheel drive versions of their SUVs and they sell fast.

The AFR’s motoring writer nailed this in a review of the new $90,000 BMW, which is two-wheel drive.

Some surprisingly large SUVs – including the X6 fastback from BMW – feel like hatchbacks on stilts,” he wrote.

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Reflecting: a BMW SUV in its element.

And there’s the key.

People want to be high up. It’s game theory. If the car in front of me is small, I can see over it really well from an SUV. If the car in front of me is tall, I want to be in an SUV or I won’t see anything at all.

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Externality would be a sweet name for the new Ford SUV. I imagine its prestige to come from being that little bit bigger, heavier and harder to stop than the Explorer, the Excursion and the Expedition.

As someone who drives a car that comes up to armpit height, I can confirm sitting in traffic involves looking at a lot of SUV bumper bars and having no idea what is happening in the traffic up the road.

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2048. Thank me later.

An elevated position doesn’t just permit a better view of traffic, but of other people in the traffic. I can’t see what that Range Rover driver is texting from down here, but they can sure see what’s on my phone (at right).

The light commercial category also shows the change. You can’t easily sell a ute you have to step down into these days. The 1.74 metre tall Nissan Navarra tops the category, easily out-selling the 1.5 metre tall Holden ute.

Buying a tall car is what’s called a dominant strategy, if you want to be able to see. It’s also a dominant strategy if you want to crash into another SUV, according to research.

In head-on collisions between passenger cars and SUVs … Drivers of passenger cars were more than four times more likely to die even if the passenger car had a better crash rating than the SUV.”

This is the classic game theory scenario of an arms race.

The arms race analogy is a good one. Like the proliferation of weapons, taller cars are costly and risky. They are heavier, take up more road space, cause more wear and tear to roads and emit more carbon. They may be more likely to roll in a crash. They’re exactly the kind of purchase decision in which a government might try to intervene.

For a long time, SUVS had lower import tariffs than passenger cars. That changed in 2010 when tariffs on cars fell. But by then, the proportion of SUVs sold was already steadily marching upwards.

Changes to the way we tax cars are possible in the next few years. The Henry Review recommends getting rid of the luxury car tax and fuel taxes, replacing them with congestion taxes or user pay systems. It is clear that our current system does little to deter SUV purchase. Could a well-designed licensing and user-pays system be better, or is the only stable game theory equilibrium one where we all drive cars like the Dodge Ram, that can barely fit in a lane?

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

5 thoughts on ““Hatchbacks on stilts.” Why SUVs are an arms race we must stop”

  1. What are you taking about? Haven’t you seen the TV ads? Such is the real need for such vehicles that Ford make a vehicle, the “Ranger”, specifically for aquatic ecologists who need to be able wade through streams!
    It seems the more estranged people become from the outdoors the more they need to convince themselves they are going to drive through a stream next weekend. This is just one of a host of intractable problems for which solutions can’t even be discussed. It will be interesting to see where this mentality goes if driverless cars ever become a mainstream reality. Moving castles?

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  2. I have had 4WDs large and small for years together with sports cars and saloons. I have also driven to Caspe York twice and covered the Strezelecki, Oodnadatta, and Birdsville tracks not to mention the Tanami, the Donahue. the Great Central Road,the Savannah Way and lots of bone jarring underfunded poorly maintained shire roads. The day before yesterday I drove from Ivanhoe NSW to Wilcannia. Not in a saloon. You can’t tow a decent off road caravan with a saloon on remote roads . You can take the kids to school in a 4WD even a lookalike 2WD and you can carry six passengers in most of them so they are popular with hockey moms (not to be confused with the budget proposals). Not all off road capable 4WDs are gas guzzlers…I just drove Wilcannia/Whitecliffs return c. 200kms with consumption of 7.9 l/100km in a 2 tonne+ vehicle at 100kmh.

    The new ford will be the Everest based on the Ranger ute but with independent suspension and dual range gearbox and seven seats and real off road capability (previewed at Beijing Motor Show 3 or so weeks ago.

    Many tradies and some grey nomads find dual cab utes make great off roaders/tow vehicles and cheaper than the full bodied 4WD so thes commercial style vehicles are filling more than one role and blurring the descriptors.

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    1. You are exactly the kind of person, doing exactly the kind of driving, that should have an SUV, but accounts for about 0.01 per cent of SUV use in Australia.

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    2. Do you concede that heavier, larger vehicles impose costs, disadvantage and pose an increased risk to others? Do you think the costs of these should be paid be everyone – even the people who get no benefit from it? It’s one thing to drive a large heavy vehicle to perform a useful task such as the aquatic ecologist, it’s another to drive one for pleasure. I see a lot of large SUV’s and kitted up off-roaders being driven with only one occupant without any apparent need for all that weight around the city.

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      1. yeah Michael, everyone should have a second car for the city to reduce risk and fuel consumption, or maybe a bike or motorbike., or a skateboard……
        Other people do get benefits from big vehicles: sales tax, stamp duty, gst, fuel excise, are spent by our governments to heap benefits on all ,,even pedestrians or/and inner city dwelling latte sipping people who have never been off tarseal…..

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