As gas prices slide, U.S. car buyers go for size, shun hybrids
By Ben Klayman and Bernie Woodall
DETROIT (Reuters) - It is the automotive equivalent of Pavlov's bell: when gasoline is expensive, U.S. car owners try to downsize, but once pump prices ring down, they salivate over big pickup trucks and SUVs.
With gas prices dipping below $3 a gallon last month for the first time since December 2010, size is back in vogue.
“The migration to trucks will turn into a stampede if these gas prices go lower or stay low,” Mike Jackson, chief executive of AutoNation Inc AN.N, leading U.S. auto retailer, told Reuters.
“Americans just love big."
Helping fuel the upswing is an improving economy and better fuel efficiency that allows people to go for size and feel less guilty about it.
"A new Ford Escape (crossover SUV) is more fuel efficient than a 10-year-old Camry," says Barclays auto analyst Brian Johnson. "The days of having to be ashamed of your Yukon seem to be fading," he said, referring to General Motors' (GM.N: Quote) full-sized SUV powered by a V8 engine.
Analysts and industry executives say SUV and truck sales have been rising already before fuel prices fell and cheaper gas could sustain the trend into 2015.
In October, for instance, SUVs and trucks accounted for 72 percent of Ford's (F.N: Quote) sales, up from 68.5 percent a year ago, while Chrysler's (FCHA.MI: Quote) sales surged 22 percent thanks to strong demand for its Ram pickups and Jeep SUVs. Continued...