*This is a follow up post on 'Car Buyers Prefer Smaller Cars'
Soaring gas prices have forced many Americans to shift to smaller, more affordable and fuel efficient cars. If before, engine size, horsepower and torque were selling factors, the important numbers car buyers consider now would be the base price of the car and its MPG.
Of course, small cars equipped with smaller engines best fit the new demand for economy and practicality. It is no wonder why smaller cars have been increasing in popularity in recent years.
For this year however, the demand for small cars have spiked in record numbers. In April 2008, one of every five cars sold were small cars, either a compact or a subcompact vehicle. The reason for the spike is directly related to gas prices nearing $ 4.00 per gallon.
This new trend for smaller cars is benefitting Asian car manufacturers like Toyota, Honda, Mazda, Nissan and Hyundai: all of which had compact car models that were part of the top 10 selling cars last month. Because Asian auto makers are abundant with various compact and subcompact car designs, they are best equipped in servicing the ever increasing demand for smaller cars.
That is not the case for American car makers. Although American compact cars, like the Chevrolet Cobalt, Ford Focus and the compact wagon Dodge Caliber have fared well against their Asian counterparts, GM, Ford and Chrysler still don’t have enough compact car models to compete with the variety of smaller cars offered by Asian manufacturers.
In addition, the sudden increase in demand for smaller cars means that sales of SUVs and light pickup trucks have plunged significantly. SUVs and pickup trucks accommodate a large portion of profit for America’s big three. The Ford F-Series alone makes up half of Ford’s profits every year. A decline in sales for such products is obviously bad news for these companies.With oil prices expected to remain high for the coming years, it is highly unlikely for car buyers to revert back to purchasing larger cars. And if such is the case, America’s big three are the ones under most pressure to cope up with the new demand of car buyers looking for more fuel efficient means for transport.
Soaring gas prices have forced many Americans to shift to smaller, more affordable and fuel efficient cars. If before, engine size, horsepower and torque were selling factors, the important numbers car buyers consider now would be the base price of the car and its MPG.
Of course, small cars equipped with smaller engines best fit the new demand for economy and practicality. It is no wonder why smaller cars have been increasing in popularity in recent years.
For this year however, the demand for small cars have spiked in record numbers. In April 2008, one of every five cars sold were small cars, either a compact or a subcompact vehicle. The reason for the spike is directly related to gas prices nearing $ 4.00 per gallon.
This new trend for smaller cars is benefitting Asian car manufacturers like Toyota, Honda, Mazda, Nissan and Hyundai: all of which had compact car models that were part of the top 10 selling cars last month. Because Asian auto makers are abundant with various compact and subcompact car designs, they are best equipped in servicing the ever increasing demand for smaller cars.
That is not the case for American car makers. Although American compact cars, like the Chevrolet Cobalt, Ford Focus and the compact wagon Dodge Caliber have fared well against their Asian counterparts, GM, Ford and Chrysler still don’t have enough compact car models to compete with the variety of smaller cars offered by Asian manufacturers.
In addition, the sudden increase in demand for smaller cars means that sales of SUVs and light pickup trucks have plunged significantly. SUVs and pickup trucks accommodate a large portion of profit for America’s big three. The Ford F-Series alone makes up half of Ford’s profits every year. A decline in sales for such products is obviously bad news for these companies.With oil prices expected to remain high for the coming years, it is highly unlikely for car buyers to revert back to purchasing larger cars. And if such is the case, America’s big three are the ones under most pressure to cope up with the new demand of car buyers looking for more fuel efficient means for transport.
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