Why death of SUV’s ?

The car companies can barely give away an S.U.V. these days. The latest evidence of this comes in the form of three more closings of factories making S.U.V.’s. According to that New York Times article, S.U.V. sales plunged by more than 40 percent this year, compared to a 16 percent decline for new vehicles overall.

Here is the puzzling thing. The apparent cause of death for S.U.V.’s was high gas prices. Doesn’t that mean that with low gas prices S.U.V. sales should come back to life?

I can think of a few reasons why that might not be the case:

1) Consumers think that the low current gas prices are temporary, and in general gas prices will be high in the future. Thus, they don’t want to get stuck with a vehicle that gets poor gas mileage. The question this raises is why consumers were so sure six months ago that gas prices were going to be high forever (which turned out to be wrong), but don’t believe now that gas prices will stay low.

Read the complete article on freakonomics