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Gas prices hitting SUV sales?
Survey of new vehicle prices finds large SUV prices off, while compact car prices up.
May 13, 2004: 3:47 PM EDT

NEW YORK (CNN/Money) - Gas pump prices may be starting to be felt in dealer showrooms, according to a report from an automotive information provider showing that compact car prices are getting a lift while there is downward pressure on prices for large sport/utility vehicles and pickups.

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Edmunds.com said it's too soon to say that the shift in prices is caused by fuel economy concerns, but it said the April sales data is worth watching for further signs of a gas spike impact on sales.

"Although we have yet to see a flood of consumers trading in their large SUVs or trucks for smaller, more fuel-efficient cars, our analysis of 16 different vehicle segments clearly displays a relative weakening of demand for larger, less fuel-efficient vehicles," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.

The Edmunds Price Index for new vehicles (EPI-N) increased from 99.9 to 100.3 overall in April, an increase of 0.4 points. The EPI-N for large SUV's declined 1.5 percent, while the index number for large trucks dropped 1.2 percent. For compact cars, meanwhile, the Edmunds index number for all vehicles rose 2.4 points.

Correction
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In an earlier version of this story, changes in the Edmunds index figure were presented as if they were changes in the actual prices paid for vehicles. CNN/Money regrets the error.

The EPI-N is designed to measure average changes in the amount paid for new vehicles when adjusted for options and other factors. Over the past year, the EPI-N increased 2.4 points overall.

During April of last year, the EPI-N for large SUVs went up about a point while the figure for large trucks went up by three-quarters of a point. The EPI-N for compact cars went up just 0.35 of a point during the same month last year.

Art Spinella of CNW Market Research, a company that tracks automotive sales trends, told CNN/Money that he doubts consumers are shying away from larger vehicles just because of gas mileage.

"The impact of gas prices is not on the size of the vehicles or the type of vehicles but the powertrain being selected," he said.

For example, he said, a consumer might buy a vehicle with a six-cylinder engine rather than upgrading to an optional eight-cylinder engine.

Sales data from auto sales tracker Autodata shows that many large SUV models did have sharp drops in numbers of vehicles sold in April compared to year-earlier figures. Ford Expedition sales, for example, were off 33.6 percent. Chevrolet Suburban sales fell 20.7 percent, and the Hummer H2, also marketed by General Motors, saw a 21 percent drop in sales.

Some of the drop in sales numbers for those large SUVs may be caused by increased competition from luxury and Japanese vehicles in the sector. Some is also apparently a shift by buyers from large to mid-size SUVs and so-called cross-over vehicles. Overall SUV and sport wagon sales were up 2.4 percent in the month in terms of units sold, according to Autodata.

Drops in sales for some "niche" large SUVs like the Hummer H2 may also be a matter of simple market saturation, said

Gas prices have continued to climb in recent weeks as crude oil hit 13-year highs. Thursday Lee Scott, CEO of Wal-Mart Stores Inc., said that rising gas prices is a concern for the world's largest retailer.

The AAA daily survey of gas prices hit another record Thursday as the average price of a gallon of unleaded reached $1.95, up from $1.93 a gallon Wednesday. California had the highest state average at $2.271 a gallon, while South Carolina had the cheapest average at $1.792  Top of page




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