Motorists may grumble about the high price of gas, but any pain they experience at the pump is usually forgotten on the showroom floor.
Sales of sport-utility vehicles rose 14 percent in January and February from a year earlier, and midsize cars fell 3 percent and small cars slipped 6 percent. SUVs accounted for a record 28.5 percent of new-vehicle sales the first two months this year.
Full-size pickup trucks, the bulk with V-8 engines, rose 13 percent. Compact pickups, most of which have 4- and 6-cylinder engines, were down 16 percent.
Ford sales analyst George Pipas sees those trends continuing in March and predicts robust sales of the F-Series full-size pickup, the industry’s most popular vehicle.
“We haven’t really seen any change. The F-Series is going to have another big month in March,” Pipas said.
Truck sales keep rolling despite warnings that gas prices could go higher because demand may exceed supply when more motorists hit the road this summer.
Pipas says consumers choose vehicles more for what they can do than how much gas they use.
“Their primary focus in buying a vehicle is meeting some perceived or real need, like hauling stuff from the Home Depot,” he said. “We’re a nation of do-it-yourselfers, and you don’t see many [Ford] Focuses or Honda Civics in the Home Depot parking lot.”
Christine McCarthy of Wilmette needed a vehicle brawny enough to tow a 21-foot boat to property her family owns in northern Wisconsin and Kentucky, and her 2002 Dodge Caravan wasn’t right for the job.
McCarthy recently traded the Caravan for a Chevrolet Tahoe, a full-size SUV with a V-8, leather seats, DVD player and a sunroof.
“This thing doesn’t even feel that there’s a boat in the back,” she said of the Tahoe. “I love SUVs, but I probably would not have bought such a big truck if I didn’t need it for towing.”
She hasn’t driven the Tahoe enough to gauge fuel economy, but she’s prepared for the worst.
“You press the gas and lose about a quarter of the tank,” she said. “I’ll just have to live with that.”
At Stasek Chevrolet in North Suburban Wheeling, trucks usually account for 70 percent of sales but slowed modestly in early March. Owner Bill Stasek sees that as an anomaly and not the result of gas prices.
“Gas mileage isn’t even a topic of discussion on the showroom floor. It’s just not an issue,” Stasek said. “I’ll be willing to bet that by the end of the month, we’ll be back up to 70 percent trucks.”
Manufacturers reap most of their profits from SUVs and large pickups and have not backed off from robust production plans this spring despite high gas prices.
Ford plans to build 700,000 trucks in the second quarter, 15,000 more than in the 2003 period. Last week, all three Ford plants that build the F-Series worked overtime.
The Chrysler Group’s pickup and SUV plants also operated on overtime last week .
General Motors plans to build 841,000 trucks in the second quarter, 4,000 more than last year. Two GM assembly plants that build full-size trucks worked weekday overtime last week, and three others also operated on Saturday.
“We’re having another really good month in trucks,” GM market analyst Paul Ballew said. “The American love affair with utility vehicles shows no signs of ebbing.”
What will it take to get Americans to park their gas-guzzling trucks?
In a national poll of new-vehicle shoppers this month by CNW Marketing Research, in Bandon, Ore., consumers said it will take gas prices of $2.75 per gallon for three to six months to motivate them to buy a more efficient vehicle.
Even at that price, only 5 percent said they would change vehicles immediately and another 16.5 percent said “eventually.”
At $2.25 per gallon, only 9 percent would buy a more efficient vehicle eventually and none immediately.
“More efficient” may mean a full-size truck with a V-6 instead of a V-8, CNW President Art Spinella says.
“Full-size truck and SUV buyers are not sensitive to gas prices,” he said. “When they’re about to buy a vehicle for $40,000 or more, they say `so what?’ to an extra $20 a month for gas. It doesn’t make a difference to them.”
Consumers may be blind to the potential for skyrocketing gas prices or shortages, but Spinella said they don’t get nervous about price spikes because they’ve learned “what goes up comes down.”
Prices have gone up far more than they’ve come down the last five years.
In March 1999 the average pump price nationally was 98.2 cents, according to the Energy Information Agency. After adjusting for inflation, today’s price of around $1.70 per gallon is 73 percent higher.
However, Ballew said: “The number at the gas pump looks big, but when you adjust for inflation, it is nowhere near record-level gas prices.”
Gas peaked in early 1980, when the inflation-adjusted pump price was almost $3 in today’s dollars, and consumers dumped big cars and trucks in favor of smaller, 4-cylinder models.
Pipas says gas now accounts for only 10 to 15 percent of the cost of owning a vehicle, not enough to set off alarms with most motorists.
“You have to look at fuel prices in the context of the total household balance sheet. Income is higher than ever,” Pipas said.
“Unleaded fuel at $1.76 a gallon today isn’t as onerous as it was in the 1990s or 1980s. It’s not going to have the same effect.
“The most important thing is whether consumers believe that higher gas prices are something they will have to live with. Apparently they don’t believe that yet,” he said.
The energy agency forecasts gas will climb to a national average of $1.83 this spring, fall to $1.74 in the summer as oil supplies increase and settle at $1.50 by year-end.
“We expect higher oil production later this year and crude oil prices to come down. The price of gasoline will come down with it,” agency economist Neil Gamson said.
He added that political or military upheavals could alter that. “We can’t predict the geo-political outlook.”
