As gas prices drop, owner retention of larger vehicles increases
Of course, the opposite has been true over the past year. As gas prices increased, more and more consumers switched to smaller or just more...
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Of course, the opposite has been true over the past year. As gas prices increased, more and more consumers switched to smaller or just more fuel efficient vehicles. But now that prices have dropped significantly, more car buyers are sticking with what they know.
According to the Power Information Network (PIN), a division of J.D. Power and Associates, four of six high-volume large pickup models, four of five large utilities and seven midsize utilities all have experienced increases in owner retention during the same time period (mid-August to early October).
“It’s early, but this data suggests there still is life in these segments,” said Tom Libby, senior director of industry analysis at PIN. “These segments are important because they include many high-volume, high-profit models. These findings are also relevant because Ford, General Motors and Toyota all have new products coming in these segments.”
“The effect of rising gasoline prices on sales mix and retention rates has been evident for some time now,” said Bob Schnorbus, chief economist at J.D. Power and Associates. “It will be interesting to see if falling gasoline prices will have a completely opposite effect on the market, especially if prices remain above $2 per gallon. Most likely, consumers have fundamentally changed their perception of the importance of fuel prices in their purchasing decisions and will continue to shy away from larger vehicles.”
In other words, most consumers are pessimistic about gas prices increasing once again. So, Schnorbus feels that a fundamental shift has already occured. Despite the increase in loyalty rates, most consumers are going to look smaller in the future.
Source: PIN: Sales of Large Pickups and SUV Models Revive
According to the Power Information Network (PIN), a division of J.D. Power and Associates, four of six high-volume large pickup models, four of five large utilities and seven midsize utilities all have experienced increases in owner retention during the same time period (mid-August to early October).
“It’s early, but this data suggests there still is life in these segments,” said Tom Libby, senior director of industry analysis at PIN. “These segments are important because they include many high-volume, high-profit models. These findings are also relevant because Ford, General Motors and Toyota all have new products coming in these segments.”
“The effect of rising gasoline prices on sales mix and retention rates has been evident for some time now,” said Bob Schnorbus, chief economist at J.D. Power and Associates. “It will be interesting to see if falling gasoline prices will have a completely opposite effect on the market, especially if prices remain above $2 per gallon. Most likely, consumers have fundamentally changed their perception of the importance of fuel prices in their purchasing decisions and will continue to shy away from larger vehicles.”
In other words, most consumers are pessimistic about gas prices increasing once again. So, Schnorbus feels that a fundamental shift has already occured. Despite the increase in loyalty rates, most consumers are going to look smaller in the future.
Source: PIN: Sales of Large Pickups and SUV Models Revive
