Pain at the Pump, Agony for US Automakers

April 3, 2005 – Vol.10 No.2

PAIN AT THE PUMP, AGONY FOR U.S. AUTOMAKERS.

According to a fresh AutoVIBES poll from Harris Interactive and Kelly Blue Book Market Research, 47 percent of U.S. consumers planning to buy a new vehicle in the next few months have changed their minds as to which vehicle to buy because of high gas prices:They’re now looking at fuel-efficient vehicles.

Further, if gas prices rise another 75 cents - pushing the national average for regular gas to over $3.00 per gallon - 77 percent of buyers will be considering fuel efficient vehicles - including hybrids.

Jack R, Nerad, editorial director of Kelly Blue Books kbb.com said, "Up to now we've seen buyers shifting from large SUVs to small or mid-sized SUVs as fuel prices have risen, but that could change dramatically if gasoline prices cross consumer pain thresholds. A $50 or $75 fill-up could push consumers towards hybrid vehicles and smaller, more fuel-efficient vehicles. This, of course, has serious implications for American manufacturers who have staked so much on the large SUV segment."

Further, according to the poll of more than 2000 U.S. adults who plan to buy a new vehicle in the next 12 months, hybrids are preferred over diesels even though diesels can offer similar fuel economy. Overall interest in hybrid technology doubled from February to March - 4 percent to 8 percent.

(The disinterest in diesels may be in part because of their limited availability. States with emissions standards stricter than U.S. EPA standards are not allowing the sale of new diesel passenger vehicles. Those states include New York, Massachusetts, Vermont, Maine and of course California. Other states are soon to follow.)

Visit Kelly Blue Book at http://www.kbb.com/ (click Media Center) .