Latest Automotive News

Subscribe in a reader




Auto Price Quote
Get a free auto price
quote from Edmunds!

Incentives, lower gas prices shift sales back from cars to trucks

Email   small font medium font large font

Google
 
Web AutoNews24h.com
Back in August, when gas prices had settled in around US$3 per gallon, sales of the Toyota Camry, America's top-selling car, were booming as the market shifted from trucks and sport utility vehicles to more fuel-efficient models.

But since then Camry sales, as well as car sales overall, have fallen off as gasoline prices have dipped into the $2 per gallon range, and there's been a bit of shift back toward trucks.

The change has pleased Detroit's Big Three, which are more reliant on trucks for profits than their Asian competitors, but some industry observers are cautioning against pronouncing any trends.

``It's a little bit dangerous just to assume that it's all correlated to gas prices,'' said Rebecca Lindland, an auto analyst at Global Insight, an economic research and consulting company. ``There is certainly some level of correlation. But the other thing that you have going on is that manufacturers are starting to dump inventory.''

That means large discounts and other incentives on lots full of slow-selling, year-old trucks and SUVs. On some vehicles, dealer and customer incentives total upwards of $6,000.

``What you're seeing in this period is not a consumer response to lower gas prices, but a consumer response to year-end incentive programs to clear out the '06 model trucks and SUVs,'' said George Pipas, U.S. sales analysis manager for Ford Motor Co.

Despite the incentives, though, North American light truck sales were 12.5 per cent lower in October than in August, with pickups off 15.2 per cent. But sales of large SUVs rose 8.3 per cent and small SUVs rose 7.4 per cent, according to figures from Autodata Corp.

Car sales, on the other hand, dropped 24.2 per cent between August and October, and Camry sales alone were down almost 20 per cent, from 42,227 in August to 33,812 in October. Small car sales dropped 33.2 per cent during the same period, and sales of crossovers, which mainly are glorified station wagons, were down 15.5 per cent.

Many in the industry had predicted a continued migration from trucks to cars and crossovers, saying that consumers don't believe gas prices will stay around $2 forever.

But Rick Pulcino, general manager of Rick Hendrick Jeep-Chrysler in North Charleston, S.C., said the shift was only a summertime fad, led by people who panicked at $3-per-gallon gas and traded in their trucks for cars.

``That group's over with and we've settled back in,'' he said. ``The majority of people didn't jump for that. They still have those three children. They still have to go on trips,'' he said.

SUV sales were strong in September and October, Pulcino said, and he predicted that the market has stabilized for truck-based vehicles.

``The people that have come in here still want to sit up higher. They still want that room. They still want that lifestyle and they don't want to give it up,'' Pulcino said.

But Pipas said at Ford, the fourth-quarter months are typically low points for small cars. He predicts that truck sales may remain stable through the winter, but the market will shift back toward cars in the spring as gas prices go back up.

``Consumers believe that gas prices are going to be high in the future,'' he said. ``We're not going to go back to a buck and a quarter.''

Receive the latest automotive news by email!

Enter your email address:


Find the new car you want on cars.com

Related news
Ford's U.S. sales plummeted 21 per cent in September on deep cuts in sales to car rental agencies. Toyota sales slipped four per cent, but General Motors and Honda fared better in ...
Automakers reported mixed U.S. sales results for November on Monday, with some new or more fuel-efficient models performing well despite consumer malaise over high gas prices and the weak economy. But even with rising ...
Cars were too small, sport utility vehicles too inefficient and she couldn't see herself driving a minivan. So Dr. Melissa Sundermann ended up with a type of vehicle that most automakers are banking ...
Ford Motor's U.S. sales plummeted 21 per cent in September on a steep dropoff in car sales, while Toyota reported a four per cent decline, according to results released Tuesday. But Honda Motor ...
Chrysler Group's passenger vehicle sales, which include the Chrysler, Jeep and Dodge brands, fell 1.4 per cent compared with June 2006, while Mercedes sales fell 5.8 per cent during the same period. Detailed breakdowns ...
The Swedish tax authority said Wednesday it has ordered Volvo Cars AB to pay about US$37.2 million in back taxes, saying it filed incorrect income statements for 2005 and 2006. ...
Tata Motors will reduce the prices of its small cars and commercial vehicles (including buses, bus chassis and bus body), in view of the reduction of excise duties announced in the Union ...
Soaring oil prices are prompting consumers to ditch gas guzzlers for more fuel-efficient models, according the Scotiabank's automotive industry specialist. Last year's U.S. sales of sport utility vehicles were down by a third from ...
Mercedes-Benz with a historical monthly sales record in the Brazilian market 1010 heavy trucks sold in May Sales from January to May of this year surpassed 4,300 units ( 52% ...

Best Investment Newsletter

- 46% in 2008

- invest in the best performing US stocks only and sell them when the uptrend is over

- very easy to follow, simple buy/sell signals

- no need to have investing or trading experience

Find More Now!


Incentives, lower gas prices shift sales back from cars to trucks
> © 2006-2011 AutoNews24h.com except where otherwise noted