Pump Prices Having Big Impact On Car Sales

DETROIT — (WWJ) One day before March car sales numbers are released, there’s a big indication that the reports will see a big impact from gas prices that now top $4 a gallon.

General Motors says that in March they sold more than a hundred thousand vehicles with a highway fuel economy of more than thirty miles per gallon—the most ever.

“GM’s strategic investments in four-cylinder and turbocharged engines, advanced transmissions and vehicle electrification have been very well timed,” said Mark Reuss, president of GM North America.

INTERVIEW: WWJ AutoBeat Reporter Jeff Gilbert talks with GM Sales Operations Manager Don Johnson.

That strategic investment made GM better prepared for fast changing consumer tastes, said sales operations manager Don Johnson.

“Today, 40 percent of our vehicle mix are vehicles that get 30 plus miles per gallon.  That’s up from 16 percent just three years ago,”

Johnson says they have learned from history.

“You look over the last couple of years, every time gas prices have spiked, there has been a shift toward smaller cars.”

It’s not just General Motors.  All major carmakers have diversified their fleets to include more fuel efficient products.  Vehicles like the Fiat 500, Chevy Sonic and Ford Fiesta didn’t exist during the 2008 gas spike.

Now dealers are having trouble keeping those vehicles in stock.

“We are still seeing the strength in anything gas efficient, small cars, subcompact cars, small SUV’s, anything that is hybrid,” said Jesse Toprak, who heads the analyst team at truecar.com.

Toprak said that gas prices will likely boost the overall March sales rate, as vehicles in all categories are more fuel efficient than they were a few years ago.

For example, while Chrysler waits to get it’s fuel efficient Dodge Dart into the lineup this summer, all of the vehicles that were recently updated saw improved fuel economy.   Sales manager Reid Bigland says that’s now paying off.

“We’re seeing a lot of consumers trading in their vehicles, not necessarily for small and compact vehicles—which is certainly occurring, too, but for just vehicles within their same segments that are just more fuel efficient than they were say, five years ago.”

That trend will continue with this week’s New York Auto Show, with just about every product introduced having a fuel economy story to tell.

Ford announcing that the new feature on the 2013 Fusion, that stops your engine while idling, will come as a $295 option.  They expect a lot of takers.

“We expect the average Fusion driver with the 1.6-liter EcoBoost engine and Auto Start-Stop will save about $1,100 more than other midsize sedan owners during five years of driving,” said Samantha Hoyt, Fusion marketing manager.

Analysts say at this point, they see consumers making judgments based on their pocketbook, no panic.

“We don’t see hysteria,” said truecar.com’s Jesse Toprak.  “We don’t find the owners of Escalades, parking their cars on the side of the road, in a panic, going to buy a Prius.”

Connect With Jeff Gilbert

Email: jdgilbert@cbs.com
Facebook: facebook.com/carchronicles
Twitter: @jefferygilbert

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