AutoPacific's Research Shows Consumer Sentiment Rises and Falls With Fuel Prices

TUSTIN, Calif., Feb. 2, 2006 -- U.S. fuel prices reached a peak in September, 2005, declined through December, and then rose again in January, 2006. Drivers are reacting to these changing fuel prices. The January 2006 Fuel Price Impact Survey conducted by AutoPacific's VehicleVoice confirms that many consumers are paying more for gasoline now than they did a month ago, and expect to pay an additional $0.25 to $0.30 more per gallon a year from now. The Fuel Price Impact Survey is based on the results of a VehicleVoice Internet survey with 1,058 respondents who completed the survey between January 16 and January 23, 2006.

Actual fuel price up from last month, but lower than September peak

In January the median price respondents say they paid for fuel has increased by about 15-cents per gallon (to $2.37) following a dramatic 68- cents per gallon decrease from September to December. The median price respondents expect to pay one year from now has increased by 18¢ per gallon to $2.63 over the last month.

Shift away from SUVs now moderating

Many drivers reconsider the types of vehicles they are driving when fuel prices spike higher. Drivers of sport utility vehicles represent about 25% of the total car market today. In September, when fuel prices peaked, about 27% of SUV drivers indicated they would consider shifting the type of vehicle they drive to something more fuel efficient. That shift declined to 19% in December, and further declined to 11% in January -- despite the above mentioned 15-cent fuel price increase in the same period! Looks like the folks are getting used to higher fuel prices. This confirms that the go anywhere, with anybody and anything functionality of SUVs is still very persuasive. Folks won't abandon SUVs simply because of high fuel prices.

11% of Drivers Consider Hybrids

While less than 1% of respondents currently drive a Hybrid, about 11% say they will consider a Hybrid when they replace their current vehicle. Hybrid consideration draws from current conventional 4, 6 and 8 cylinder gasoline powered vehicles. Interest in Diesels is greater than represented by their current share of units in operation, but has moderated over the last month as Diesel fuel prices have a substantial premium over gasoline prices.

The E85 story

There has been a lot about ethanol (E85) fuel in the press lately. While fully 96% of respondents say the U.S. needs to be less dependant on imported oil, and 77% say manufacturers should produce more vehicles capable of running on E85, only 42% say they would be willing to pay more for domestically sourced E85 than for largely imported gasoline, and only 40% would accept reduced mpg for an E85 powered vehicle. Essentially respondents support domestic bio fuels -- but not at an increase in their fuel costs. Higher fuel prices (which might encourage E85 usage) are still considered "Bad for America" by 60% of respondents.

Ethanol received favorable mention in President Bush's State of the Union address. It appears that someone in Washington is aware that, as a nation, we really are addicted to imported oil, and that alternatives for reducing this dependence are possible. It will be interesting to measure the public's awareness of and reception to ethanol as a partial substitute for imported oil.