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Thursday, April 19, 2007

ARE GAS PRICES REALLY CAUSING SHIFTS IN THE VEHICLES CONSUMERS BUY?

ARE GAS PRICES REALLY CAUSING SHIFTS IN THE VEHICLES CONSUMERS BUY?

Another volatile gas-price season is here, but are consumers ready to give up their pickups and SUVs? According to a recent The Wall Street Journal article, automakers are pressured by consumers to build more fuel-efficient vehicles, but consumers are saying one thing and doing another. Consumer polls say they recognize global warming, but new-vehicle buyers are less willing to sacrifice performance in exchange for subcompact cars. Consumers have also said that $3.00-per-gallon gasoline prices make them think twice about the type of vehicles they drive. But there has not been a substantial shift in the types of vehicles consumers are buying, nor has there been a reduction in the number of miles consumers drive.

According to The Wall Street Journal article, “Small cars, small crossover wagons and compact trucks make up only about 25% of total retail sales in the United States, compared to 40% for small vehicles in Europe, where gas prices are about double U.S. levels.” For example, the article states that GM dealers have had to offer rebates in order to sell Chevrolet Aveo subcompacts, whereas these same vehicles sell for nearly $5,000 dollars more in Europe. First-quarter sales in the United States do show some shifts in the types of vehicles consumers are buying, but these shift may be largely due to the increase in the number of CUV and subcompact car offerings by the OEMs compared to last year.



Gasoline prices are expected to remain roughly the same over the summer as they are now, according to the Federal Energy Information Administration (EIA). This may not necessarily drive consumers into the direction of more fuel-economic vehicles. The difference between a 15-mpg vehicle and a 22-mpg vehicle averages $2.26 per day, according to the article. Consumers begin to realize that if they cut back on some of their unnecessary daily expeditors, they can drive the type of vehicle they really want.

Source: “Gas Prices Rise and Consumers Shrug,” The Wall Street Journal/Automotive Digest, www.automotivedigest.com.


From SEMA.SEMA.org


Consumers, saying one thing, doing something else. Its the "you should do something good". Emphasis on the "you" Lots of people try and blame the vehicle manufacturers will make what they can sell. The market is shifting, but the market doesn't know what it wants. Here in LA, we see a ton of Prius and other Hybrids. Other parts of the country, a lot less.

Sometimes, I feel that the whole global warming thing is a "Chicken Little" scenario. "The sky is falling, the sky is falling." Maybe I just feel beat up being in the auto industry. The environmentalists being the first to blame automobiles. I see people say that automobiles are responsible for 25% of the gasses that contribute to global warming. Then 75% of the gasses come from other sources ? Cows emit a pretty substaincial amount of greenhouse gasses. I'll do my part, walk to McDonalds, and get a Big Mac. Just don't go to a car dealer and burn some Hummers, it really doesn't get anyone, anywhere.

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