When Ford Motor Co. came out with its new Edge crossover in 2006, the company hoped the truck-like vehicle built on a car frame would attract longtime Ford buyers trading in their inefficient sport utility vehicles.
For a while, it worked well. But last month, sales of the Edge and nearly all crossover vehicles dropped dramatically, causing another worry for automakers struggling with the dramatic shift by U.S. auto buyers from trucks to cars.
Automakers and some industry analysts say it's a temporary lull due to a combination of economic worries, sliding SUV values that prevent people from trading them in, and the lingering shock of $4 per gallon gasoline.
But if the trend continues, it's another blow to the profits at Ford, General Motors Corp. and Chrysler LLC, all of which have developed crossovers to capture their traditional SUV and truck buyers.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
“The tough part is that's where the U.S. domestics are used to making their money, on people-haulers,” said Mark Warnsman, an analyst with Calyon Securities.
The crossover market peaked this year in March, with all automakers selling 222,055, according to Autodata Corp. Sales dropped in April, rebounded in May and then slid in June to 184,871, down nearly 17 percent from March.
Even the Honda CR-V, a perennial top seller, saw a 21 percent decline in sales from May to June.
George Davis, general manager of Howard Cooper Honda in Ann Arbor, blamed the decline on tumbling SUV values. Davis said buyers now are looking for cars that get as close to 40 miles per gallon as possible, shunning even the CR-V, a small crossover that gets up to 20 mpg in the city and 27 on the highway.
Many SUV owners have been stunned when told they would get only $20,000 in trade for a vehicle they paid $35,000 or more for just a short time ago, Davis said.
“They're in a trance. They're paralyzed,” he said. “People have never experienced this kind of depreciation because there's just no market for their vehicle.”
Midsize SUVs, on average, lost 28.7 percent of their value, from $15,577 in March 2005 to $11,096 at the end of June, according to wholesale auction data from the National Automobile Dealers Association.