Gas prices not scaring car buyers as much this time around

With gasoline prices soaring this year, one might assume, justifiably, that hybrid and fuel-efficient small vehicle demand must also be on the rise, mimicking the market situation in 2008. However, history may not be repeating itself this time around. AutoPacific President George Peterson says, based on a study by the consulting group, that "small car and hybrid consideration is not tracking anywhere near the rate of the price of fuel as it did in 2008." Of the 68,000 people surveyed, only 21 percent are seriously considering purchasing either a compact or hybrid vehicle. This is down from 34 percent in 2008. This isn't to say that no one is buying smaller cars – they are – just that they might not be doing so solely because of high gas prices.
According to Peterson, there are a couple of reasons for the difference in consumer reaction to the spike in fuel prices this time around. One is that buyers know that the 2008 gasoline prices eventually came back down, so they see no reason to panic and trade-in their large gas-guzzlers for smaller, eco-friendlier vehicles. Reason number two is that fuel efficiency, even of larger vehicles, has improved over the past few years allowing drivers to keep them as they try to ride out the high gas prices.

Still, automakers focusing on building more fuel efficient vehicles (i.e., pretty much all of them) need not fear. AutoPacific expects hybrid vehicle sales to grow to 1.3 million units by 2016 (we are currently at 300,000 units).

[Source: Automotive News – sub. req. | Image: A Siegel – C.C. License 2.0]