The Industry's Leading Source For F&I, Sales And Technology

Top News

Emphasis on Small Cars Not Permanent, Says Edmunds.com

August 18, 2008

SANTA MONICA, Calif. — In June and July the national average price for gasoline topped $4 per gallon for seven weeks, fueling a sudden shift in consumer interest towards smaller, fuel-efficient vehicles. But according to Web site traffic on Edmunds.com, an online resource for automotive information, consumers' single-minded focus on small vehicles is subsiding as gasoline prices drop.

"There's been a rush to small cars, but that doesn't necessarily mean the shift is permanent," said Jeremy Anwyl, CEO of Edmunds.com. "With the initial shock of high gas prices fading, consumers are returning to rationality and again viewing gas consumption as just one of many factors when considering their next vehicle. And as gas prices actually decline, this trend could accelerate."

Edmunds.com "consideration data" tracks consumer interest by measuring its Web site traffic to each vehicle segment. The data shows the trend towards small vehicles is leveling off, and interest in previously declining segments — such as compact crossover SUVs — is on the rise. Even interest in the popular hybrid segment is down 34 percent compared to June as gas prices have declined.

"Automakers made some big changes to their production plans based on preferences in the second quarter," said Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "But if gas prices continue to recede to the long-term trend line, automakers may find that they overreacted to a temporary shift in consumers' preferences."

"Gas prices, not incentives are the driving force behind recent consideration shifts," said David Tompkins, Senior Industry Analyst at Edmunds.com. "We are noticing that many vehicles carrying big incentives continue to register drops in consumer interest, while other vehicles with low levels of incentives are experiencing increased levels of consideration."

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

CLOSE [X]

READ NEXT

Allstate Credit Division Adds Features to GAP Program

Allstate Credit Division has added two new features to its GAP product, commercial vehicle coverage and coverage for non-uniform monthly payment loans.