March auto sales rise despite $4 per gallon gas

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$4 and over gas prices, Lewiston, Maine, at Cumberland Farms.

Gas prices didn't sink March auto sales. (Photo Credit: CC BY/Micov/Wikipedia)

Despite high gas prices in the first quarter of 2012, vehicle sales did not wane, reports Automotive News. Consumers aren’t leaving their trucks and SUVs and opting for tiny hybrids with excellent fuel economy as they did when gas prices spiked four years ago. Today, people are opting for the cars they like that offer the best mpg rating.

$4 per gallon is no tipping point

Even though gas prices have spiked to $4 per gallon and higher, consumers bought 1.4 million light, non-hybrid vehicles in March, a 13 percent increase over the same time the previous year and the highest auto sales volume since August 2007. The trend is better fuel economy in slightly older models of the same size U.S. consumers had become accustomed to purchasing.

“Fuel economy was the name of the game in March [and] the first quarter,” said Ken Czubay, U.S. sales boss for Ford Motor Co.

More encouraging signs of economic recovery played something of a role in the March auto sales surge, but Czubay believes that availability of more fuel-efficient models played a greater role. As fuel economy has improved across the industry, truck and car sales have risen at essentially the same rate: 14 percent for cars, 11 percent for trucks.

In May 2008, gas prices also spiked. Car sales rose by a modest 2 percent, while truck sales dropped like a stone, down 25 percent.

The champions of March, 2012

The top-selling vehicles in March 2012 combined both improved fuel economy and utility, notes Automotive News. The Ford F series and Focus, Nissan’s Altima and the Toyota Camry and Prius were all successful. In the first quarter, Camry sales were up a whopping 37 percent, to 105,405 units.

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The tipping point for automakers

Jim Farley, Ford’s global chief of sales, claims that the quest for fuel economy itself has reached a “tipping point,” in that consumers now notice that even a 10 mpg increase makes great financial sense.

“If you do the math, it’s thousands and thousands of dollars,” Farley said.

According to University of Michigan transportation researcher Michael Sivak, new vehicles purchased in March 2012 offered a combined fuel economy of 24.1 mpg, up from 20.1 mpg in October 2007. As opposed to instituting quick fixes, automakers have hit their stride and are now designing products from the ground up that embrace U.S. fuel efficiency mandates.

Take the 2013 Dodge Ram as an example. The redesign of the big truck drops the standard 3.7-liter V6, six-speed transmission and replaces it with a 3.6-liter Pentastar V6 with an eight-speed transmission. This boosts horsepower by 42 percent and saves gas. Systems like stop-start, air suspension, thermal management and body design to reduce drag also help make the new Ram more fuel-efficient.

Gas prices are going to remain high

The reality is that gas prices aren’t going to suddenly go cheap, experts remind. Drive a big truck 150,000 miles at $4 per gallon, and you’ll be paying $36,000 for fuel, more than the sticker price of many trucks.

Why auto sales surge as gas prices rise

Sources

Automotive News

USA Today

Yahoo! Finance

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