Previous Issues | Current Headlines | Point of View | Obituaries

Experian Analyzes Impact Of Gas Prices On Vehicle Sales

Research from Experian Automotive shows that there was a direct correlation between fluctuations in gas prices and changes in market share for different types of vehicle sales. Not surprisingly, the analysis showed the biggest market share gainer to be the small-car economy segment. However, more interesting is how much this segment is affected.

In the five-year study, the small-car economy segment rose 0.7 percent for every dollar increase in fuel price. This means that if gas prices increased by $1 in an average month with 1 million unit sales the small-car economy segment volume would increase by 7,000 units. Conversely, the same price increase would cause the full-size pickup truck segment to lose 0.5 percent market share.

With roughly 18,000 new vehicle dealers in the United States, these findings show that, on average, a $1 spike in a gallon of fuel means every dealer in the nation could see one more small-car economy vehicle sale approximately every three months.

Another surprising trend was the impact on hybrid vehicles and electric vehicles. Sales of hybrid trucks actually fell 0.1 percentage points. Hybrid cars went up by just 0.2 percentage points, and electric vehicle sales were up only 0.1 percentage points. While these vehicles are still likely to be solutions to long-term transportation challenges, there is low market demand currently, even when gas prices increase significantly.

“While higher fuel prices tend to get people talking, actual consumer behavior is affected primarily at the vehicle segment level. What this means for dealers is not necessarily a change in the number of vehicles sold, but rather a shift in which vehicles people are buying,” said Erik Hjermstad, lead analytic consultant for Experian Automotive. “Smaller cars definitely pick up market share, and full-size pickup trucks and SUVs definitely see a downturn. But, the magnitude of these shifts is also a function of how quickly gas prices increase or decrease.”

We encourage you to add your comments below concerning this article.

Back To Story List