Americans still buying bigger models.

[xcel]

Analysts say gasoline prices haven't harmed May auto sales, with trucks and SUVs expected to be up.

Tom Krisher - AP - May 25, 2007

I want more Power with a V6 Accord sans the I4. “Some sheep are meant to be shorn.”

FERNDALE -- As Ian Kaminsky was shopping for a car to replace his leased Honda Accord this month, gasoline prices continued to flirt with record highs.

Petroleum, he said, was a consideration as he decided between another Accord, a Chrysler Sebring, Toyota Camry, Jeep Commander and other models. On Wednesday, he settled on an Accord, forsaking a more efficient four-cylinder engine for a V-6.

And although the larger engine may cost a little more to run, the 27-year-old radiology resident at a suburban Detroit hospital said he wanted the additional power.

"I think my income will increase enough in the next few years" to pay the incremental gasoline costs, he said as he signed the new car paperwork at Ferndale Honda just north of Detroit.

As automakers prepare to release their May U.S. sales figures on June 1, some industry analysts say Kaminsky's decision to get the larger engine is typical consumer behavior.

Americans still love bigger vehicles, and even with gasoline nationwide topping $3.20 per gallon, that probably won't change their buying habits. However, the overall U.S. market could drop slightly as uncertainty over gas prices drives some buyers to the sidelines, some analysts predicted … [Read More]

[brucepick]

Drivers can learn now or they can learn later.

The article does point out that large vehicle sales are basically being propped up by price reductions. Buyers think they can get a lot of gas with the discount they've received on the truck. You don't have to a rocket scientist to see what's happening here. Eventually they won't be able to drop the price enough to make up for the climbing cost of gas. And buyers will recognize that, in fact many buyers do every day.

They're hanging on to a dying market by reducing prices.

[Earthling]

I was amazed this morning at the flurry of car commercials on TV. They are trying to turn the Memorial Day Holiday into a car-buying holiday. The only bright spot is Chrysler, who have chosen to can their "second-grader ad campaign," and are now touting fuel efficient cars getting close to 30 mpg. Of course we consider those gas-hogs, but for Chrysler, they are the height of fuel-efficiency. At least they have gotten away from insulting our intelligence, with burger-flippers lusting after Hemi's...

Harry

[Chuck]

Could it be gas prices are finally hurting a lot of people, and they will swear off gas-guzzlers? I'd be concerned if I were Detroit - do they have anything that gets 40mpg?

[Earthling]

It's ironic that the Big Three, who love to foist gas-guzzlers on us, would make a big deal about Memorial Day, which also seems to serve as the starting gun for gas stations to race towards higher prices. This year the race started early...but I imagine prices will continue up, possibly after a brief pause.

Harry

[WriConsult]

Originally Posted by xcel

And although the larger engine may cost a little more to run, the 27-year-old radiology resident at a suburban Detroit hospital said he wanted the additional power. "I think my income will increase enough in the next few years" ...

Originally Posted by xcel

As automakers prepare to release their May U.S. sales figures on June 1, some industry analysts say Kaminsky's decision to get the larger engine is typical consumer behavior.

I don't think a radiology resident is always going to be representative of "typical consumer behavior" when it comes to cars. Docs will drive what they want regardless of gas prices. They always have, and they always will. I'm not too worried about their behavior, because they're a pretty small slice of the population.

The consumer whose behavior eventually is going to change as a result of gas prices is the middle class two-income family trying to juggle the payments on two newer cars, the house that's bigger and further from town than their last house, and maybe a credit card or two whose balances have been inching up over the years. Those families are going to notice an extra $100 a month going to gas. If gas prices go into in the $4-5 range for a while, a lot of those families are going to consider trading in for something more efficient.

Of course on top of that they could also save another $200 a month just on car payments by getting a minivan or wagon instead of an SUV and skipping the leather, Nav, DVD and other crap they don't need that just accelerates their vehicles' depreciation anyway. Funny how a lot of the people moaning about a $3 gas are driving newer cars, which on average now cost well over $25k to buy and 40-50c a mile to operate. But hey, if $3 gas gets them to be more energy conscious, who am I to point that out?

[c0da]

Originally Posted by Delta Flyer

Could it be gas prices are finally hurting a lot of people, and they will swear off gas-guzzlers? I'd be concerned if I were Detroit - do they have anything that gets 40mpg?

Well the Ford Focus gets 37mpg on the highway. But thats highest I can think of right now.