Deb Nison is a data warehouse developer in Portland, Ore., who likes to go snowboarding on nearby Mt. Hood. Once upon a time, she drove a Chevy TrailBlazer, and later a Subaru Forester. Today, she owns a 2007 Honda CR-V.

"I like the way it handles," she says. She appreciates feeling "ridiculously safe" in a vehicle with standard head protecting airbags. And for an SUV, she says, it gets "decent mileage" -- about 23 miles per gallon so far around town.

Ms. Nison is just one reason why the Honda CR-V is, as of June 30, America's best-selling sport-utility vehicle. The CR-V's rise, and the parallel collapse in demand for "real" SUVs like the TrailBlazer and the one-time King of SUVs, the Ford Explorer, reveal a lot about why the American auto industry is in the shape it's in right now.

Just 10 years ago -- a mere two product generations in auto industry terms -- America was SUV Nation. SUV meant a tough looking box perched on a heavy steel ladder frame borrowed from a pickup truck. No vehicle did a better job capturing the appeal of this formula than the Ford Explorer.

In 1997, Ford Motor Co. sold more than 383,000 Explorers. Three years later, Ford sold more than 445,000 Explorers. It's not a coincidence that Ford earned record profits during this period. The Explorer was a perfect automotive money-making machine: A high volume model that sold at premium prices. If Henry Ford or Alfred P. Sloan, the architect of General Motors Corp.'s rise to power, had been alive in 1997, they would have understood the Explorer's business model immediately -- and approved.

Of course, it helped -- a lot -- that the late 1990s were an era of ultra cheap gas. Today's V-6-powered Explorer is rated at 15 miles per gallon in the city, and 20 mpg highway. Not bad for a truck that weighs more than 4,600 pounds, perhaps, but not good in any absolute way. But at $1 or so a gallon during the heady days of the dot-com boom, a lot of American families could afford to take a "What Me Worry?" attitude toward gasoline prices. The Explorer's combination of a tall-in-the-saddle ride, "go anywhere" four-wheel-drive capability and rugged looks became a suburban status symbol.

But even as the Explorer was enjoying its peak years, Honda Motor Co. began offering something new. The Honda CR-V, launched in 1997, looked like an SUV that had taken a wrong turn on to the set of "Honey, I Shrunk the Kids." It had the boxy profile of an SUV, and the rear cargo space, and all wheel drive. But it was more than 1,000 pounds lighter than an Explorer, and smaller in every dimension. Underneath, the CR-V was built like a compact, front-wheel drive Honda Civic. There was no heavy duty ladder frame, which among other things meant it couldn't tow very much.

The industry struggled with what to call vehicles like the CR-V -- cute utes, car-truck hybrids -- before settling on "crossover."

In the late 1990s, the CR-V sold modestly compared to the mighty Explorer. In 1997, Honda sold just shy of 67,000. By 2000, sales had risen to just over 118,000. In other words, barely half of one Explorer assembly plant's annual production.

The Explorer, and the even larger SUVs such as the Hummer H2 that built on its success, were the T-Rexes of the American road. The Honda CR-V was the furtive mammal, scurrying to stay out of harm's way.

Did somebody say, asteroid?

When it comes to the auto industry, dinosaur metaphors are irresistible. The Great SUV Die-off of the last three to four years is the most dramatic example of how vulnerable the auto industry and its long product design cycles are to short-term shocks since the oil embargoes of the 1970s.

From the peak of more than 445,000 Explorers sold in 2000, Explorer sales have fallen by nearly 60% through the end of 2006. By the end of 2007, Ford may be lucky to sell much more than 150,000 Explorers -- the capacity of just one shift of production at one assembly plant. GM's rival mid-size, traditional SUVs are in the same downward spiral. Within a few years, it's probable that neither Ford nor GM will even sell a body-on-frame mid-sized SUV.

There's more to this than just $3 a gallon gasoline. Consider how the CR-V has redefined success. It's the best-selling SUV in America, but through the first half of this year, Honda has sold only about 104,000. By the end of the year, CR-V sales might top 200,000, but probably not by much. In other words, No. 1 in the SUV segment today means selling fewer than half as many vehicles as Ford did when the Explorer was No. 1 a decade ago.

That market fragmentation is one reason why Detroit auto makers, including Ford, are having such trouble. It's harder and harder to sell a full assembly plant's worth of one type of vehicle just in the U.S. Honda's strategy for realizing economies of scale with the CR-V doesn't depend on that. The company sells the CR-V around the world, builds it using some of the engineering and manufacturing tools used for the higher volume Honda Civic.

Beyond that, the CR-V represents a better solution to the challenge from customers such as Ms. Nison. As is often the case when Japanese auto makers attack a segment invented by Detroit, it has taken Honda three generations to really get it right. The first generation CR-V was too small for many. The second generation model was too drab -- by Honda's own admission. Generation III, launched in 2007, combines an efficient interior package, five-star front and side crash-test ratings, AND styling that is sportier on the outside, and clever and uncluttered on the inside.

One other wise choice Honda made was to keep the CR-V a four-cylinder model, with highway fuel economy rated at 30 mpg for two-wheel-drive models, 28 for the all-wheel drive.

On the road, the CR-V is quiet, and at just over 3,500 pounds, it is less ponderous and easier to maneuver than a standard SUV. It also does better on the government rollover test, scoring four stars to an Explorer's three.

What's the lesson for Detroit? The Detroit auto makers already know. . The demise of the Explorer doesn't mean Americans don't want to drive vehicles with all wheel drive, lots of cargo space and a tall driver's seating position. A large segment of the car buying public wants all that -- just with better handling, more safety technology and better fuel economy. That's why even as the Explorer fades away, Ford (and GM and Chrysler) are rushing out more vehicles to compete with the CR-V and its larger brother, the Honda Pilot, and enjoying success. Ford's total "crossover" sales are up 83% in June, even as overall Ford sales fell 8%. An internal Ford tally finds that Ford -- including its European luxury brands -- is now the leading seller of crossover vehicles in the U.S., with GM close behind.

Ford, in fact, has a shot at wrestling back the No. 1 SUV in America title from the CR-V if it can continue to boost demand for its recently redesigned Escape (See related article).

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