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April 2, 2004
BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER
Americans may be concerned about rising gas prices, but it isn't keeping them from buying full-size pickups and SUVs, according to March vehicle sales announced Thursday.
To try to make sure consumers keep buying, car companies launched new discounts Thursday, led by General Motors Corp.'s "Truckfest" offer of no-interest for 5 years plus $1,000 cash back on most pickups, SUVs and vans.
Sales of luxury vehicles and big trucks led sales gains for most automakers, while car sales dropped off, perhaps reflecting a divide in the economy as higher-income Americans take advantage of sweet deals and working-class consumers wait for more signs that the job market is getting better.
GM and Ford Motor Co. posted better sales this March than they had last year. Sales of DaimlerChrysler AG's three American brands -- Chrysler, Jeep and Dodge -- slipped a little, but remained up for the first three months of the year.
Toyota Motor Corp. and Nissan Motor Co. once again set new monthly sales records.
While record gas prices -- and the prospect of pump prices topping $2 a gallon for much of the summer -- dominate news coverage and watercooler chatter, incomes are also at record highs, said Ford sales analysis manager George Pipas.
"Energy prices represent far less of a household's income today than they did 20 years ago," he said.
Adjusted for 20-some years of inflation, gas prices in the early '80s are the equivalent of $3 a gallon now, Pipas said.
In the recession of the early '80s, when consumers feared that gas prices would never come down, buying patterns shifted from trucks to cars and from big cars to small cars.
That's not happening now. DaimlerChrysler's Dodge brand saw double-digit gains in sales of Ram full-size pickups and Durango full-size SUVs. Sales of Ford's F-Series full-size pickups and Expedition SUV were both up 18 percent. And GM said it is on pace to sell 1 million full-size pickups this year, matching a feat it achieved only in 1978.
So far, consumers don't seem to believe that prices will stay high forever, so they are continuing to buy what they want.
This is a perfectly rational response to what is seen as a temporary price increase, said GM analyst Paul Ballew. A 30-cent-per-gallon increase in gas prices would cost the typical vehicle owner about $200 a year or $4 a week, he said.
Large pickups and SUVs "tend to attract buyers with higher incomes, so" higher gas prices "certainly don't have as much of an impact on their incomes," Ballew said.
And on the off-chance that a 30-cent-per-gallon increase sticks around for five years, GM is offering $1,000 cash -- on top of zero-percent, 5-year loans -- for qualified buyers of most trucks and SUVs.
http://www.freep.com/money/autonews/sales2_20040402.htm
BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER
Americans may be concerned about rising gas prices, but it isn't keeping them from buying full-size pickups and SUVs, according to March vehicle sales announced Thursday.
To try to make sure consumers keep buying, car companies launched new discounts Thursday, led by General Motors Corp.'s "Truckfest" offer of no-interest for 5 years plus $1,000 cash back on most pickups, SUVs and vans.
Sales of luxury vehicles and big trucks led sales gains for most automakers, while car sales dropped off, perhaps reflecting a divide in the economy as higher-income Americans take advantage of sweet deals and working-class consumers wait for more signs that the job market is getting better.
GM and Ford Motor Co. posted better sales this March than they had last year. Sales of DaimlerChrysler AG's three American brands -- Chrysler, Jeep and Dodge -- slipped a little, but remained up for the first three months of the year.
Toyota Motor Corp. and Nissan Motor Co. once again set new monthly sales records.
While record gas prices -- and the prospect of pump prices topping $2 a gallon for much of the summer -- dominate news coverage and watercooler chatter, incomes are also at record highs, said Ford sales analysis manager George Pipas.
"Energy prices represent far less of a household's income today than they did 20 years ago," he said.
Adjusted for 20-some years of inflation, gas prices in the early '80s are the equivalent of $3 a gallon now, Pipas said.
In the recession of the early '80s, when consumers feared that gas prices would never come down, buying patterns shifted from trucks to cars and from big cars to small cars.
That's not happening now. DaimlerChrysler's Dodge brand saw double-digit gains in sales of Ram full-size pickups and Durango full-size SUVs. Sales of Ford's F-Series full-size pickups and Expedition SUV were both up 18 percent. And GM said it is on pace to sell 1 million full-size pickups this year, matching a feat it achieved only in 1978.
So far, consumers don't seem to believe that prices will stay high forever, so they are continuing to buy what they want.
This is a perfectly rational response to what is seen as a temporary price increase, said GM analyst Paul Ballew. A 30-cent-per-gallon increase in gas prices would cost the typical vehicle owner about $200 a year or $4 a week, he said.
Large pickups and SUVs "tend to attract buyers with higher incomes, so" higher gas prices "certainly don't have as much of an impact on their incomes," Ballew said.
And on the off-chance that a 30-cent-per-gallon increase sticks around for five years, GM is offering $1,000 cash -- on top of zero-percent, 5-year loans -- for qualified buyers of most trucks and SUVs.
http://www.freep.com/money/autonews/sales2_20040402.htm
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