High Gas Prices Fuel Auto Industry's New Era
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Washington DC June 2, 2008; The AIADA newsletter reported that as gasoline prices top $4 a gallon, the shift by U.S. consumers from big, powerful trucks to small cars with small engines is now a stampede.
Industry executives and vehicle buyers alike are acting on the belief that high fuel costs are not a momentary discomfort, but a new reality.
As in previous oil shocks, the market changes tend to benefit Asian brands whose lineups emphasize small cars. One out of 10 dealers in the Automotive News survey says he or she no longer accepts big SUVs and pickups as trade-ins. And many other dealers say they are offering far lower trade-in prices for those vehicles.
"I'm looking out my window at 300 to 400 cars," says John Hawkins, a Honda and Acura dealer in Los Angeles. "There are no Fits. They sell as fast as we get them." Sales of Honda's imported Fit compact are up 68.7 percent so far this year.
By contrast, many dealers now express fears they will be unable to resell big-engine vehicles they take in trade. Last week, Kelley Blue Book said retail prices of used SUVs have declined 8 percent since last September, but you may not want to seel it now... SEE STORY HERE
