Consumers are not buying cars based on fuel economy

admin - Wednesday, 21 July 2010 07:48

  The head of one of the biggest automotive industry groups said Americans are shunning small, fuel-efficient vehicles despite recent increases in the price of gasoline and the arrival of new small models in showrooms.

“Consumers today are not buying cars based on fuel economy,” National Automobile Dealers Association Chairman Ed Tonkin said in a speech hursday. “We may wish it were different. But that doesn’t change anything.”

Hybrid sales continue to fall, from about 315,000 vehicles sold in the U.S. two years ago to 290,000 last year, Mr. Tonkin told the Detroit Automotive Press Association. That number is projected to fall by 12% this year.

“The fact is, manufacturers have struggled for years to make money on small cars,” he said. “And consumers remain skeptical that small cars are safe.”

Mr. Tonkin’s comments come as auto makers have recently launched or are preparing to introduce more small cars and hybrids to the U.S. market. Ford Motor Co. is now selling the Fiesta small car while Chrysler Group LLC is preparing for the arrival of Fiat 500 subcompact next year. Nissan Motor Co. is preparing to sell the Leaf electric car and General Motors Co.’s is getting ready for the battery-based Volt.

Flipping consumer buying to fuel efficiency would require large financial incentives from the U.S. government, Mr. Tonkin said.

“People are buying based on horsepower and the features within the car,” he said. “Fuel efficiency ranks below those.”

Mr. Tonkin said he questions the push to mandate that vehicles get higher miles per gallon. His big concern is the current talk that the U.S. may require cars avearge 60 mpg.

“NADA is in full support of fuel economy increases but they have to be in reasonable amounts and they can’t override consumer choice,” he said. “Sixty miles per gallon raises many questions.”

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