American car buyers get a case of amnesia

When gas prices take a breather, consumers' common sense takes a hike.

By Alex Taylor III, Fortune senior editor

NEW YORK (Fortune) -- Who can remember all the way back to last summer, when we had daylight-saving-time, baseball and $3 a gallon gasoline prices?

Not American car buyers, apparently, and you can see the evidence in the results of October auto sales.


Sales of big pickup trucks and SUVs went through the roof - doubling from the year before in some cases. Sales of small, fuel-efficient cars, meanwhile, remained stagnant. It is as if all that moaning and groaning about price gouging by oil companies never happened.

Actually, it is worse than that. American consumers have reinforced all the stereotypes they are labeled with: short attention spans, lack of social consciousness and thinking with their wallets.

Does anyone seriously believe that having once spiked up to $3 with very little provocation, gasoline prices won't do it again? Have they forgotten about the ongoing instability in the Middle East? And have they stopped caring about traffic density, scarce resources or global warming? And if they haven't, why aren't they exercising better sense in their vehicle preferences?


General Motors' (Charts) customers get the ostrich award for sticking their heads in the sand. They drove up sales of hulking Chevy Tahoes and Suburbans, and Cadillac Escalades in October to double and triple the rates of a year ago. At the same time, they walked away from economical Chevy Aveos and Cobalts, sending sales of those vehicles down 31 percent and 43 percent respectively. "GM's truck business was boosted by lower fuel prices," sales and marketing boss Mark LaNeve explains. Apparently so.

One bright spot, sales of the fuel-gulping Hummer were about flat compared with a year ago. Perhaps consumers have tired of cartoonish macho design.

Over at Ford (Charts) and Chrysler (Charts), results were about the same. Sales of the new Ford Expedition and Lincoln Navigator both shot up more than 40 percent. Both are handsome vehicles greatly improved in their ride and handling from previous versions, but how many people really need all that metal to drive to the 7-Eleven?

Over at Chrysler, sales of Jeeps - known for their go-anywhere capabilities but not their fuel economy - shot up 29 percent, with the biggest and thirstiest, the Commander, shooting off dealer lots at the rate of more than 8,000 a month.

Import buyers demonstrated a little more common sense. They tend to be self-selected Blue Staters anyway, who are attracted to import brands because of their lighter weight and more fuel-efficient engines. The gap between them and domestic buyers is widening.


Toyota (Charts) reported its best-ever October, with overall sales up 13.6 percent. Its hybrids suffered because lower gas prices make the premium price harder to justify. Prius, the hybrid flagship, saw its sales fall 8.6 percent, though to a still-healthy 8,733 for the month. Meanwhile, the RAV4, a crossover SUV that is downright stingy in fuel usage compared with a traditional truck-based SUV, sold 11,154 copies in October, nearly beating out the old-style Ford Explorer, once the leader in the field.

Honda (Charts) did Toyota one better. It moved 20,413 CR-V crossover SUVs during the month, an increase of nearly 96 percent, handily outpacing Explorer. Honda likes to brag that it has the best overall fuel economy of any U.S. brand, and its customers responded. They bought 21,343 small Civics during October, including 2,288 Civic Hybrids.

These kinds of sales fluctuations drive product planners crazy. As they sketch out new models for the 2010 model year and beyond, do they add more big V-8s based on the latest sales data? Or do they assume that either gas prices will carom up again, or buyers will stop getting more vehicle than they need?

The sociologists have a simpler time of it. As Americans flock back to their old buying habits, it is all too easy to lump excessive fuel consumption in with other bad habits involving overindulgence: over eating, over spending and excessive television watching.

The supply of oil is not limitless but apparently the current generation of Americans is all too willing to exhaust it by buying bigger cars than they need and letting their children and grandchildren fend for themselves.


Heavier drivers seen using more gasoline Top of page

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