Consumers Choose Smaller SUVs as Gas Prices Skyrocket

Sales of full-size sport-utility vehicles tumbled last month, and sales of some smaller, more fuel-efficient SUVs boomed in what could be a sign that higher fuel prices are hurting automakers’ high-profit models. One of the largest sales drops was experienced by GM’s Hummer, which is now sold with rebates.

Gasoline prices have hit highs almost daily the past month. The nationwide average for a gallon of unleaded regular is a record $1.85, according to the American Automobile Association (AAA).

Automakers downplay gas prices, saying they haven’t been high long enough to hurt sales. They also claim that many customers are trading in full-size SUVs for new full-sized models.

But additional measures of popularity underscore the trend toward smaller vehicles. For starters, full-size SUVs sat on dealer lots 68 days last month compared with just 50 days a year ago. Also, inventories of unsold big SUVs rose to about 100 days’ supply in April, from an average of 70 days" supply.

Meanwhile, Ford is expecting huge sales of its fuel-conserving, gas-electric hybrid Escape small SUV this summer. It should get about 35 miles a gallon versus about 20 for the conventional gasoline Escape. Already dealers are reportedly flooded with pre-orders.

Source: http://www.usatoday.com/usatonline/20040507/6183887s.htm

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