Published on June 25th, 2008 | by Clayton
Are Automakers To Blame For Consumer Car-Buying Trends? Auto Alliance Weighs In
Editors Note: This guest post was contributed by Charley Territo, spokesperson for the Alliance of Auto Manufacturers, in an effort encourage better dialogue between the auto industry and the environmental movement. Charley also contributed a guest post on Grist on May 20. I asked him to weigh in on a question I’ve had for a long time: How can automakers like GM complain that consumers only want to buy big cars when they spend hundreds of thousands advertising brands like Hummer? Here is his response. Feel free to weigh in with your own comments below.
For years it’s been assumed that, using their superior marketing skills, automakers have the ability to trick consumers into buying SUVs and pickup trucks…when, in reality, the consumers really only
wanted to buy compact cars. While that’s probably quite flattering to the marketing departments, it doesn’t have the important benefit of actually being correct.
Current events are now allowing people to see more clearly the greater force at work driving consumer demand: Gas prices.
Gas just pushed past $4 a gallon – a record high. With no drop on the horizon, customers are adjusting not only their driving habits but their purchasing patterns, as well.
The last time the average gas price in a given month constituted a record high, it was May 2007. Incidentally, that is also the only month in the five years prior to March 2008 in which consumers
purchased more passenger cars than they did light trucks. That is not a coincidence.
Think about that: years have been spent trying to legislate incremental increases in fuel economy standards. But the recent rise in gas prices has succeeded in changing the fuel efficiency of the new automobile fleet without any government intervention. The lesson here is very important: when consumers became a part of the equation, both consumers and the auto industry will respond. . .and this response is faster and more effective than artificial regulation. But let’s be clear, though: the auto industries response did not happen overnight. In fact, the auto industry has been working toward this for many years now.
For years, automakers have been touting the more than 100 models that achieve fuel economy ratings of more than 30 mpg on the highway. For years, they have been introducing alternative fuel autos like hybrid electric, ethanol capable e-85, clean diesel and more to prepare for a time when consumers valued fuel economy the way they valued attributes like towing capacity, 4 wheel drive, cargo room, safety, performance and styling.
That time has arrived.
Automakers have been preparing for that shift, and they are working even harder now that it is arriving,. They are increasingly changing their product lineups to meet the challenge, and more and more fuel efficient autos will be introduced in the future. By the end of next year more than 50 new models of hybrids are expected to be available, and the sales of clean diesel vehicles are expected to grow from less than 1% of sales today to 10-15% by 2015. Last year more than 1 million ethanol capable ffvs (flex-fuel vehicles) were sold in the U.S with the increased renewable fuels standard included as part of last year’s energy bill. That number will continue to grow.
The U.S. is not one size fits all, though. If real progress is going to be achieved on fuel efficiency, consumer incentives are important.
Remember these points:
- What works in one part of the country doesn’t always work in another.
- The fuels available in one part of the country aren’t always available in another.
- The vehicles that are popular in one part of the country aren’t always popular in another.
That’s why automakers believe that the best way to enhance our energy security, save money at the pump and reduce our carbon dioxide emission is through the use of diverse fuels and diverse autos. No one likes to pay more for gasoline. . .or for that matter food, airline tickets or any other consumer good. But higher prices force consumers to make decision about their habits that otherwise wouldn’t be made. For now it looks like high gas prices and demand for more
Fuel efficient cars are here to stay. Automakers are ready to respond with cleaner, safer and more fuel efficient vehicles than ever before, proving once again that the market will respond faster than incremental government mandates.