Gas prices won't slow sales for SUVs - DodgeIntrepid.Net Forums - Dodge Intrepid, Concorde, 300m and Eagle Vision chat
 
LinkBack Thread Tools Rate Thread Display Modes
post #1 of 9 (permalink) Old 05-28-2004, 05:01 PM Thread Starter
Intrepid Pro
 
Join Date: Jun 2001
Location: Catonsville, Md.
Posts: 3,652
Feedback: 0 / 0%
                     
Gas prices won't slow sales for SUVs

From the Detroit Free Press:

Gas prices won't slow sales for SUVs, vans
Analysts expect U.S. light-truck gains for May
May 26, 2004

BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
Gas prices might be high and rising fast, but they aren't painful enough to push people out of their beloved pickups, SUVs and vans.

Despite the fact that rising gas prices are aggravating consumers -- causing some people to reconsider the vehicles they drive -- experts who have analyzed automotive buying trends for decades are predicting that sales of light trucks will continue rising this month.

Research firm J.D. Power and Associates is projecting that May sales will be 11 percent higher than they were during the same month a year ago for pickups, 2 percent for SUVs, and 7 percent for vans. That's with the help of massive incentives, of course.
Compact and midsize cars, despite being the most fuel-efficient, are expected to be up 3 percent and 2 percent, respectively. Full-sized cars, meanwhile, are projected to be down 5 percent.
"We're expecting all truck sales to be up," said Walter McManus, J.D. Power's executive director of automotive forecasting.

If true, that's good news for Detroit's automakers, who specialize in SUVs, pickups and vans. General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group make most of their automotive profits on the big vehicles and are just beginning to get their diesel-powered and hybrid vehicles off the ground.
With regular gas hitting an average of $2.05 a gallon nationwide on Tuesday -- 56 cents a gallon higher than last year -- it might be logical to think consumers would dump less-efficient trucks for thrifty cars with smaller engines, especially hybrids.

But McManus said he believes gas prices would have to go a lot higher -- perhaps as high as $4 a gallon -- before customers really start shifting to more fuel-efficient vehicles.
Several news reports on TV, in magazines and in newspapers have already declared a trend toward more fuel-efficient vehicles is under way.

Automakers and analysts challenge the reports, though some surveys seem to support a shift. One in six customers who plan to buy a new vehicle said they have already changed their mind about what vehicle they plan to purchase as a result of rising gas prices, according to a survey released this month from Harris Interactive and Kelley Blue Book.

What's more, there are waiting lists for the Toyota Prius and Honda Civic hybrids. Hybrid sales, with help from upcoming entries like the Ford Escape SUV, are expected to more than double to 100,000 vehicles this year. Hybrids combine a gas engine with an electric motor.

There are also plenty of anecdotes that suggest that people are trading down and asking salespeople about more fuel-efficient vehicles.

When his gas tab rose to $50 a week, Michael Smith of Grosse Pointe took action. As soon the lease was up on his Ford Explorer last month, he passed up another SUV even though it's ideal for his 6-foot-5 frame, wife and three kids. Instead, he bought a Chrysler 300C sedan, a move that lowered his car payment and doubled his mileage.

"I'm saving big-time now," said Smith, vice president of sales and marketing for a manufacturing consulting firm in Birmingham.
But trucks are still outpacing cars, McManus said.

"What we see so far is little or no impact," McManus said.
Another analyst, Ronald Tadross of Banc of America Securities, is expecting all auto sales to increase just 1 percent in May compared to the same month a year ago, and he expects truck sales to make up even more of the mix because U.S. automakers have been engaged in an intense incentive war to move a glut of trucks out of their inventory.

"This is despite the increase in gas prices," he concluded.
Of course, the experts could be proved wrong next week when automakers report their new-vehicle sales for May.
But don't bet on it.

McManus' and Tadross' views echo those of several automakers, who have access to daily sales reports.

"We look at it every which way we possibly can look at it, and quite simply, we are not seeing any impact," Paul Ballew, GM's executive director of GM's global market and industry analysis, said in early May. "We continue to see strong sales of large trucks."

Art Spinella, president of CNW Marketing Research Inc., said the biggest impact that gas prices seem to be having at this point is that they have encouraged consumers to take a wait-and-see approach to buying a vehicle.

That might have contributed to sluggish U.S. sales of vehicles in April. For the first four months of the year, truck sales were up 8 percent and car sales were down 2.3 percent.

While many in the news media have been declaring truck troubles for Detroit's automakers as a result of gas prices, automotive experts scoff at the notion that trucks are losing their popularity. While they acknowledged there may be some movement to smaller SUVs, they noted that's hardly an about-face, and it could be caused by other factors, such as anxiety about Iraq or the economy.

"It's an overreaction, and I would say there's some wishful thinking," McManus said of these reports. George Pipas, Ford's U.S. sales analysis manager, added: "I think people want to see it, but as of yet, we've seen the contrary."
There may be another reason automakers aren't biting their nails, too.

Gas prices are rising at a time when the economy is improving and household incomes have grown faster than gas prices. Automakers also know that their customers are better off financially than most of the population. So even if customers are griping nationwide about pain at the pump, it may be less of a pinch for people who can afford a new car or truck.
In 2001, the last year for which there is federal data, household income averaged $42,228. But the average income of a new-vehicle buyer that year was $74,300, according to J.D. Power.
Some media reports have pointed to the declining popularity of the Hummer, which gets a scant 11 miles per gallon, as evidence that vehicles that get poor mileage are out.

But Spinella noted that a 50-cent increase in the price of gasoline shouldn't really impact people who can afford a $50,000-plus H2. According to his data, the average household income of a Hummer buyer is $473,520.
moparman is offline  
Sponsored Links
Advertisement
 
post #2 of 9 (permalink) Old 05-28-2004, 08:19 PM
 
Join Date: Sep 2003
Posts: 202
Feedback: 0 / 0%
                     
Fat americans need powerful vehicles to be able to carry their weight around

Seriously though, consumerism is addictive. Once you start, it's hard to change back. No matter how hard it bites your wallet.
insane driver is offline  
post #3 of 9 (permalink) Old 05-28-2004, 08:21 PM
 
Join Date: Sep 2001
Posts: 8,099
Feedback: 0 / 0%
               
if i had held out on my expedition....i bet i could find a decent price on a v10 excursion now :p
IntrepidXJ is offline  
Sponsored Links
Advertisement
 
post #4 of 9 (permalink) Old 05-28-2004, 08:45 PM
 
Join Date: Sep 2003
Posts: 202
Feedback: 0 / 0%
                     
Quote:
Originally posted by Intrepid99
if i had held out on my expedition....i bet i could find a decent price on a v10 excursion now :p
You'd donate it to charity immediately after your first visit to the gas station
insane driver is offline  
post #5 of 9 (permalink) Old 05-28-2004, 08:48 PM
 
Join Date: Sep 2001
Posts: 8,099
Feedback: 0 / 0%
               
Quote:
Originally posted by insane driver
You'd donate it to charity immediately after your first visit to the gas station
yeah, i'd rather have the diesel version
IntrepidXJ is offline  
post #6 of 9 (permalink) Old 05-28-2004, 09:55 PM
 
Join Date: Jun 2001
Posts: 3,503
Feedback: 0 / 0%
                     
Re: Gas prices won't slow sales for SUVs

Quote:
Originally posted by moparman
From the Detroit Free Press:

Instead, he bought a Chrysler 300C sedan,
Hell yeah!!

Warlord187 is offline  
post #7 of 9 (permalink) Old 05-28-2004, 10:03 PM
Intrepid Pro
 
dakotaquadsport's Avatar
 
Join Date: Oct 2003
Posts: 4,994
Feedback: 0 / 0%
                     
Quote:
When his gas tab rose to $50 a week, Michael Smith of Grosse Pointe took action. As soon the lease was up on his Ford Explorer last month, he passed up another SUV even though it's ideal for his 6-foot-5 frame, wife and three kids. Instead, he bought a Chrysler 300C sedan, a move that lowered his car payment and doubled his mileage.
Can someone repeat what that says?? Is this the car that isn't going to sell?
dakotaquadsport is offline  
post #8 of 9 (permalink) Old 05-28-2004, 10:08 PM
 
Join Date: Sep 2001
Posts: 8,099
Feedback: 0 / 0%
               
funny...my car payment went down from the intrepid to the expedition
IntrepidXJ is offline  
post #9 of 9 (permalink) Old 05-28-2004, 11:55 PM
 
Join Date: Sep 2003
Posts: 202
Feedback: 0 / 0%
                     
Doubled his mileage? His explorer must've been really fucked up if that's the case.
insane driver is offline  
Sponsored Links
Advertisement
 
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the DodgeIntrepid.Net Forums - Dodge Intrepid, Concorde, 300m and Eagle Vision chat forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

Member names may only be composed of alpha-numeric characters. (A-Z and 0-9)

!!ATTENTION ADVERTISERS!! If you intend on advertising anything on this forum, whatsoever, you are required to first contact us here . Additionaly, we do NOT allow BUSINESS NAMES unless you are an Authorized Vendor. If you own a business, and want to do sales on this site via posting or private message, you will need to follow the rules. Shops, Stores, Distributors, Group Buys without being authorized will see your account terminated.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in










Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes Rate This Thread
Linear Mode Linear Mode
Rate This Thread:



Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome