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Gas prices have risen nearly 20 cents in the last month, according to AAA. TrueCar.com, which is devoted to bringing transparency to the car buying process, expects a surge in sales of small and subcompact cars in the coming months as consumers opt to purchase more fuel-efficient vehicles due to inflation at the fuel pump.
“When gas prices rise, consumers re-think what vehicle they are going to purchase,” said Jesse Toprak, Vice President of Market Intelligence at TrueCar.com. “The good news for consumers shopping for a new vehicle is that there are economical choices that provide excellent fuel-economy, without having to purchase a hybrid or electric vehicle.”
The combined market share for small and subcompact cars will be 22 percent in February 2012, the highest since March 2011, according to TrueCar.com estimates, due to the rise in gas prices. In the fourth quarter of 2011, the market share was 17.3 percent.
Sales of most fuel-efficient vehicles are at their highest levels in a year, with models like the Ford Focus and Honda Civic carrying the retail success for their respective brands. Most small and subcompact vehicles are expected to post year-over-year gains of 20 percent compared to the industry average of 9.6 percent in February 2012.
Last year, from February 2011 to March 2011, gas prices increased nearly 36 cents per gallon, from $3.26 to $3.62 respectively. During the same time period, we saw a shift in consumer car buying behavior as the segment market share for both the subcompact and small car segments had the highest increase, of 0.6 and 1.0 percent respectively.
The segment with the biggest decline was midsize SUVs at 1.2 percent while the large SUV and large truck segments tied with a drop of 0.6 percent. Interestingly, in March 2011, the small car segment also had the highest market share in 2011. (Note: Because of the Tsunami/earthquake in Japan, inventory for subcompact and small cars were limited because of production issues after March 2011.)
|Segment Share : Feb-11 to Mar-11||Change in New Car Sales : 2010 vs. 2011|
|Manufacturer||Feb11||Mar11||Change||Feb10 vs Feb11||Mar10 vs Mar11||Change|
As consumers start to hit the dealership lot for more fuel-efficient vehicles, the day supply of these vehicles will drop. In January 2012, subcompact cars had a 35-day supply, while small cars were at 53 days.
“There is a relatively healthy supply of fuel-efficient vehicles on dealership lots at this time, so consumers who opt for a more fuel-efficient vehicle should be able snag one without a hitch,” said Kristen Andersson, Senior Analyst at TrueCar.com. “As we head into summer, consumers could face a bigger obstacle in trying to find the exact vehicle they want as the most popular gas-sipping vehicles could dwindle.”
For more information on how specific models fared or more information on consumer demand on the TrueCar.com Web site, contact TrueCar.com’s PR department at firstname.lastname@example.org.