HOUSTON — Gasoline prices have some local
motorists thinking twice about what they drive. While Houston car buyers aren't
flocking to buy more fuel-efficient cars in a market dominated by trucks and
SUVs, record high prices have some considering smaller cars instead of sport
utility vehicles.
Average prices at Houston-area gas stations hit $2 a gallon Wednesday for
regular unleaded, according to AAA. The average for premium in Houston rose to
$2.19 a gallon. Nationwide, the average for regular unleaded hit $2.11.
Dealers have seen some subtle buying pattern shifts.
Truck sales are at an all-time high at Fred Haas Toyota World in Spring, but SUV
sales there have fallen. The dealer has been selling as many Sequoia SUVs in one
month as it would have sold in just a week during this time last year, Shahin
Salehoun, general sales manager, said.
He credited strong truck sales to consumers who use the vehicles for work.
"The truck buyers aren't paying much attention to it, but the SUV
purchasers are looking at it."
The dealership has also seen higher demand for smaller cars like the Corolla and
the Toyota Prius, a hybrid.
Bob Reilly, customer relations manager at Don McGill Toyota-Scion in west
Houston, says prices are certainly on most of his customers' minds.
"Almost every single customer who sits at my desk mentions something about
fuel economy and gas prices," he said. "In our particular neighborhood
there are a lot of folks that don't concern themselves. But there are many more
that do."
Nationally, sales of large SUVs have dropped in recent months in tandem with
growing demand for compact cars, according to analysts at Edmunds.com.
Manufacturers have also increased spending on incentives, such as discounts on
large SUVs, while cutting incentive spending for smaller cars.
Incentive spending for larger SUVs climbed to $4,120 per unit in February 2005,
from $3,224 a year before. But incentive spending on compact cars dropped to
$1,416 per unit in February 2005, from $1,940 a year earlier.
"Our conclusion is that manufacturers sort of forecasted that there is
going to be a drop in demand for their larger vehicles, and they increased their
incentive spending for those categories," said Jesse Toprak, director of
pricing and market analysis for Edmunds.com.
Such incentives and resulting lower prices have helped buoy SUV sales for now.
Stephen Brown, an economist with the Federal Reserve Bank in Dallas, says it
takes a full seven years to turn over the country's fleet of cars, for example,
making fuel-efficient cars more prominent in the mix.
"We've seen some trouble for big SUVs and stronger demand for
hybrids," he said. "Of course, manufacturers aren't really geared up
for this, so dealers are collecting close to sticker price for hybrids, and
there are waiting lists, and the SUVs simply get discounted. They're more
expensive to operate, so they're saying, we'll make it cheaper for you to
own."
Experts at Edmunds.com say upper- to middle-income consumers are less likely to
let gasoline prices influence what they drive unless they're trying to make a
political or environmental statement by buying hybrids or fuel-efficient cars.
A recent study released by the Civil Society Institute, an environmental and
health care think tank, found that 89 percent of 1,013 people surveyed thought
it important for the government to demand that U.S. vehicles reach an average of
40 miles per gallon, to cut greenhouse gases and dependence on Middle East oil.
But a shift in attitude isn't necessarily translating into a shift in buying
patterns, as evidenced by some dealers who say their consumers aren't reacting
much to the record gas prices.
"Honestly, I don't really see people bringing their gas guzzlers to trade
for a more economical car," said Cary Wilson of Ron Carter Automotive
Center in Alvin. "People are aware of fuel-efficiency, but when you get
down to it, the soccer mom still needs to haul her kids to practice. Gas in the
U.S. compared to the rest of the world is still such an incredible value, with
our gas prices below $3 a gallon."
Chronicle reporter Lynn J. Cook contributed to this story.
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