Sales of Bigger Cars Will Force Manufacturers to Stress More Fuel-Efficient Ones

[OKIsItJustMe]

http://www.technologyreview.com/news/534441/sales-of-bigger-cars-will-force-manufacturers-to-stress-more-fuel-efficient-ones/

[font face=Serif][font size=5]Sales of Bigger Cars Will Force Manufacturers to Stress More Fuel-Efficient Ones[/font]

[font size=4]Carmakers must also push out more of the cleaner vehicles to meet average fleet emissions standards.[/font]

By David Talbot on January 29, 2015

[font size=3]Falling gas prices last year were correlated with increased sales of gas-guzzling SUVs and a softening in demand for hybrids like Toyota’s Prius—resulting in a dip in the average fuel efficiency of vehicles sold at the end of the year.

Last August—before the big plunge in oil prices—average consumption of all U.S. passenger vehicles sold in that month was 25.8 miles per gallon. In December, that had dipped to 25.1 miles per gallon, in large part because of a strong sales shift toward SUVs and other vehicles that get poor gas mileage.

That comes against a larger trend of rising fuel efficiency overall in the past several years—from 20.8 miles per gallon for model year 2008 vehicles to 25.3 miles per gallon for model year 2014 vehicles, according to the University of Michigan Transportation Research Institute.

The dip due to cheaper gas could, however, be buffered somewhat by federal regulations for fuel efficiencies. U.S. carmakers are governed by regulations called “corporate average fuel efficiency standards” that set the average fuel economy that carmakers must achieve in two classes of vehicle: cars and light trucks, which include popular SUVs. When sales of gas-guzzling vehicles grow, carmakers must balance that out with higher sales of lower-consuming vehicles to keep the average on track.

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[Kilgore]

1. Just purchased a new Dodge truck

For our business. While at the dealership, the sales guy commented that they can't keep enough trucks in Stock, but have a full lot of small cars that are not selling. People want the space and power.

Interesting, but the new truck is getting 28 mpg Highway, and 22 around town. Not bad since it replaces another getting 13/17 mpg.

[exboyfil]

2. Incentives lots of incentives

Our family will be in the market for a small car in the next year or so with my daughter graduating college. Hope the glut continues.

[Kilgore]

3. Always wondered if trucks fund

the Incentives on cars. Even a fairly basic full size truck is north of $30k

[exboyfil]

4. Probably

Except when I look at one of these behemoths in my employer's parking lot it looks 3-4 times larger than my Cavalier. The ones as wide as a parking space and long enough to extend past the lines. I think - you drive that to work everyday? Of course my coworker rides his bike in everyday so everything is relative.

[OKIsItJustMe]

5. In essense, yes

It doesn’t cost that much less to make a small car than it does to make a large car. However, people are willing to pay a good deal more for a large car because it has greater “perceived value.” The car companies make more profit on them (and your trucks) and sell the small cars with less of a margin.

CAFE standards further encourage this.

[Kilgore]

6. That may be a component, but I

Know a lot of folks, me included, that want the space and comfort a larger car gives. In our case, we went from a Prius to a VW Passat TDI, a much larger car. The decision was based solely on comfort. The fact that we average 52 mpg highway and 42 combined with the TDI helped make the decision easy.

Comfort is a big motivator for many.

[OKIsItJustMe]

7. “Comfort” is part of the “perceived value”

Last edited Thu Jan 29, 2015, 04:49 PM - Edit history (1)

If you will, car companies charge a larger markup for larger vehicles… because people are willing to pay it.

CAFE just reinforces this. They need to sell more smaller (more efficient) cars to keep their fleet average within the CAFE limits.

I am more “comfortable” in a small car.