As long as we articles like this, rest assured the oil bull will continue.
Gas prices don't scare off SUV buyers
By David Kiley, USA TODAY
DETROIT — Near-record gasoline prices haven't hurt sales of the thirstiest sport-utility vehicles, and a new survey found that two-thirds of consumers wouldn't buy more fuel-efficient vehicles even if prices passed $3 a gallon.
The Chevy Tahoe.
Through February, SUV sales were up 18% over the first two months a year ago, while overall auto sales were off 4%, according to Autodata. Some of the thirstiest SUVs are big gainers, among them: Chevrolet Tahoe, up 41%; Dodge Durango, up 21%; Cadillac Escalade, up 17%; Jeep Grand Cherokee, up 30%; Honda Pilot, up 22%; Lincoln Navigator, up 13%; Mercury Mountaineer, up 40%; and Toyota 4Runner, up 26%.
Those sales have come even as gasoline prices have climbed more than 20% this year. Nationwide, a gallon of unleaded regular averaged $1.723, motorists' club AAA reported Wednesday. The record: $1.737 Aug. 30.
After adjusting for inflation, though, oil and gas prices are still well below what they were in the early 1980s, the Energy Department says.
"Gas prices are up, but it's nowhere near the fear and loathing of the 1970s and early 1980s," says George Pipas, sales analysis manager for Ford Motor. "It will take European prices of around $5 per gallon to really dampen SUV love."
Pipas and others in the industry say consumers have become conditioned to periodic spikes in fuel prices and that the desire for SUVs outweighs concern about the cost of filling them up.
A survey by CNW Marketing Research shows that about a third of consumers would consider eventually buying a more fuel-efficient vehicle if gas prices hit $3.25 a gallon. Not until gas reached $3.75 a gallon would a third of those surveyed say they would immediately consider trading in for a more fuel-efficient vehicle.
At $2.25 a gallon, just 10% said they would consider eventually buying a more fuel-efficient car or truck, and virtually no one said they would immediately consider such a purchase.
Even in California, where unleaded regular gasoline averaged $2.152 Thursday, dealers say that while demand is high for the Toyota Prius gas-electric hybrid car, SUV buyers are barely flinching.
"People who want seating for seven or eight people, have kids, maybe need to tow a boat or trailer, and like the big SUV versatility aren't trading down to a more fuel-efficient minivan for the sake of $15 or $16 per tankful," says Tom Collier, sales manager of Courtesy Chevrolet Center in San Diego.
An all-wheel-drive Chevy Venture minivan gets 20 mpg; a four-wheel-drive Chevy Suburban SUV gets 15.
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