70 percent of Americans accept gas prices of $3 a gallon, only 50 percent were prepared to pay $4.
Reuters - May 24, 2006
DETROIT - More than a third of U.S. consumers are considering swapping their SUVs and big cars for more fuel-efficient vehicles because of high gasoline prices, according to a survey released on Wednesday.
A poll by Consumer Reports magazine showed that 37 percent of those surveyed said they may replace their current vehicles with more fuel-efficient models. Fifty percent of that group said they were considering buying hybrid models that run on a combination of electricity and gasoline.
Hybrids constitute 1 percent of U.S. new car sales and some analysts question whether consumers recover the additional cost of buying a hybrid through savings on fuel.
The survey also found that while 70 percent of Americans said they had accepted the gasoline price of $3 a gallon, only 50 percent were prepared to pay $4.
The high share of U.S. consumers looking to downsize their vehicles represents a potential problem for U.S. automakers, who have tended to rely on SUVs and large cars to generate profits, leaving Toyota Motor Corp. and Honda Motor Co. Ltd. to dominate the small car market.
General Motors, which lost $10.6 billion last year, is relying on a new line of redesigned trucks and SUVs this year to bolster its turnaround efforts.
Looking to offset consumer concern over rising fuel prices, GM rolled out an incentive program on Tuesday that subsidizes gasoline purchases for consumers in Florida and California, two U.S. markets where it has lagged.
Sales of Ford Motor Co.'s SUVs, such as the Expedition and Explorer, have also declined, which the automaker blames on gasoline prices.
"High gas prices are not just an inconvenience anymore," said Robert Gentile, director of Consumer Reports' Auto Price Services. "They are forcing people to reconsider what and how they drive."
The survey found that 36 percent of consumers said they were finding it harder to pay for essentials such as food and health care because of higher gasoline prices.
Consumer Reports, published by the non-profit Consumers Union, said it surveyed more than 2,400 people nationally for its report.