Wednesday, March 16, 2011

Auto Industry Better Equipped in 2011 to Meet the Public's Higher MPG Demand

Unlike in 2008 when gas prices spiked and demand for high-MPG models surged, auto makers now have an array of fuel-efficient vehicles to offer. According to a recent Automotive News survey, about two-thirds of shoppers in retail showrooms are now considering smaller or more fuel-efficient rides. This shift in demand has taken place in less than a month's time—since prices at the pump began increasing in February.

For example, Toyota USA sold more of the Prius Hybrid last month than any previous February.
And both Ford and GM have replaced aging compact and subcompacts since the summer of '08. Also in February, small cars hit their highest share of the U.S. market at a growing 15%. Chevy's new Cruze and Ford's new Focus are especially well positioned to sell into the market's increased demand.

Yet, because of the economy's modest improvement, pent-up demand for light trucks and crossovers has contributed to robust sales in the early part of 2011. GM, for instance, reported a 68% increase in pickup sales. One explanation is that the new year saw small businesses and contractors visiting dealers to replace a truck after putting of the purchase since the economic downturn began.

Pickups aside, Toyota and Honda Dealers will undoubtedly reap the benefits of buyer demand—just as they did in 2008—with moderately priced, high-MPG models such as the Corolla and Fit.