From The Columbus Dispatch
COLUMBUS, OH — Consumers and automakers are switching gears.
For most of the summer, car buyers flocked to large sport-utility vehicles, lured by huge incentives and rebates. At the same time, automakers poured advertising dollars into behemoth SUVs and trucks.
It’s a whole new world now, and the reasons are Hurricane Katrina and recent gasoline spikes of more than $3 a gallon.
“People are moving away from the big beasts to more fuel-efficient alternatives,” said Brian Chee, automotive editor at Autobytel.com, an online site for buying and researching vehicles.
Interest in big SUVs took a dive in August and bottomed out at a lowly 2.9 percent of total vehicle sales.
New surveys show consumer purchase decisions are being affected by prices at the pump, a shift from a month before Katrina.
“If you’re offering a $4,000 rebate plus employee pricing on a large SUV, that is a hard argument to beat when buying a new car,” Chee said. “But when people are putting $60 in to fill the tank – they start walking away from the incentives.”
Taking cues from consumers, automakers are reshaping their messages.
TNS Media Intelligence said its analysis of advertising before and after Katrina shows that fuel efficiency is a bigger selling point these days.
Before Katrina, only one brand advertised fuel efficiency. Post-Katrina, gas mileage was promoted in 18 new ads featuring 12 brands.
Linda Ackley of Worthington, OH, is among those feeling the pain at the pump. She’s shopping for a small car because it will cost much less to run than her Nissan Pathfinder.
Ackley recently took a trip to Youngstown, OH, about three hours from Worthington, and spent $100 on fuel.
“It’s cheaper to take a bus to Youngstown,” she said. “The gas is just killing me. I don’t really need a truck all the time, but I don’t want to get rid of it.”
She plans to keep her SUV, limiting its use to times when she needs more room.
“Compact cars, especially hatchbacks, are enjoying a resurgence because they are handy to have,” Chee said.
Does this mean the SUV love affair is over? Hardly. Motorists are buying SUVs, just not in super sizes. Crossover vehicles and smaller SUVs are gaining ground, with the Hummer H3 among the leaders.
The H3 made its debut in May as the little brother of the H1 and H2. Last month, H3 sales skyrocketed to 75 percent of all Hummer sales. Year to date, it accounts for 47 percent of Hummer sales.
“The H3 is a lot more reasonable, price-wise and mileage-wise,” said Westerville resident Daks Hall, who recently was shopping at Hummer of Columbus in Dublin, OH.
He was pricing the H2, but took notice of the H3’s 16 miles per gallon in city driving and 20 mpg on the highway. Hall’s Chevrolet Tahoe averages about 13 mpg for combined city and highway driving.
“The H3 caters to a much wider group of people,” said Howard Schnitz, the dealership’s general manager. But he said there always will be a core group, usually from higher incomes, that is drawn to the H2 and H1.
Hall is among that group.
“I’ve had an SUV all my life, and I’m used to it,” Hall said. “If gas gets close to $4 a gallon, then I would have to do something. ”Hall’s thinking mirrors what industry expert J.D. Power and Associates is predicting: Consumers will stick with SUVs unless prices rise to near $4 a gallon and stay there for an extended time, possibly a year.
“Because prices have gone up before, people are conditioned to think that they will come back down,” said Tom Libby, director of industry analysis for Power Information Network, an affiliate of J.D. Power, in Troy, MI.
2005, The Columbus Dispatch, OH. All Rights Reserved.
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