$3.50 Gasoline Is Changing The Nation's Vehicle Fleet

Small car sales, especially hybrids and subcompacts, are jumping while pickups and SUV sales plummet, contributing to a reduction in gas consumption. The $3.50 gallon mark may have been key to influencing vehicle selection as well as driver behavior.

"In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car.

The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply."

[From AP:
"At $3 a gallon, there's a lot of discussion about the price of gasoline but not much change in behavior," said Mike Jackson, chief executive of AutoNation Inc., the country's largest auto retailer. "But in the mid-$3.50 range, with $4 on the horizon, there's a lot of change in behavior."]

"The analysis by the research firm J. D. Power & Associates also showed that 42 percent of all vehicles sold in April were equipped with four-cylinder engines, compared with 38 percent for six-cylinder engines."It's easily the most dramatic segment shift I have witnessed in the market in my 31 years here," said George Pipas, chief sales analyst for the Ford Motor Company.

How the downsizing of America's vehicle fleet will affect fuel consumption is still largely unknown. When gas prices rise, as they are now, many drivers simply drive less to save money.

But there are some indications that the trend toward smaller vehicles will reduce the nation's fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service."

"That is an incredible year-over-year drop," said Tom Kloza, J. D. Power's chief oil analyst. "Some of it clearly has to do with changes in the vehicle fleet."

Thanks to Mark Boshnack

Full Story: As Gas Costs Soar, Buyers Flock to Small Cars


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