SUVs still selling, but more eyes on better fuel efficiency

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Published: February 27,2006

Trends in automobile sales include new crossover vehicles, entry-level options and a growing interest in fuel efficiency as Mississippians shop for cars, trucks and SUVs. Winter months are traditionally not the best time of year for auto sales but spring is right around the corner — when the weather gets better and people are ready to hit the auto lots.

According to Bill Lehman, president of the Mississippi Automobile Dealers Association, winter is a soft time of year in the United State for car sales. However, in Mississippi shoppers still want their vehicles to be large in size, fuel efficient and to ride like a car.

“Automobile manufacturers are trying to accommodate and the hottest thing right now is the crossover. It’s built on the same chassis as a car and does not ride like a truck,” he said. “It’s an image thing. Women don’t want to drive station wagons but they don’t want SUVs to ride like trucks.”

The Nissan Murano and the Infiniti FX models are examples of crossover vehicles.

Paul Moak is the current chairman of the association and sells Volvos, Pontiac, Buick, Honda, Subaru and GMC trucks in Jackson. He says shoppers are looking for gas efficiency. “Right after Katrina when gas was $3 a gallon and we had long lines to buy fuel, it made a difference,” he said. “The availability is not the issue it was, but people still want fuel efficiency even though I can’t say we’ve seen a drop in the sale of SUVs. They want the SUVs to be more fuel efficient.”

The long-time auto dealer says he cut back on his order of the large GMC Yukons and ran out. He believes he could have sold more of the popular SUV model that has a five- or seven-person seating capacity. “GMC just came out with the ‘07 model and it gets better fuel economy. It is also more aerodynamic,” he said. “For those who want that size, like families with kids, they want the larger SUVs. There still appears to be a consistent demand for SUVs.”

Gas prices a consideration, but…

Ted Marshall, owner of Marshall Ford Company in Union for 20 years, says SUV sales are dropping off, although the cost of fuel has leveled off somewhat. “It’s still affecting buying. It’s part of the thought process when people are considering what to buy,” he said. “When the cost of gas went up sharply last fall, it was really an issue. That has curtailed some but it’s still part of the equation.”

He believes the future holds more fuel-efficient automobiles, that crossover vehicles will replace SUVs and that the future will bring more fuel efficient vehicles of this type. “The Free Style, Ford’s crossover vehicle, is selling but not as much as Ford and I thought it would,” he said. “It boils down to styling. Buyers have got to like the looks of it and it’s got to have good value.”

Marshall thinks Ford will get the styling of the Free Style right next year, along with a new model, the Edge, that’s coming out in 2007. “These will be real big for the next 10 years,” he said.

‘Unique situation’

A different story is unfolding in Picayune just a few miles north of the Louisiana state line. “We’re in a unique situation and our business is fantastic,” said Jody Herring, manager of Dub Herring Ford-Chrysler-Dodge. “No one is even discussing gas and buying habits haven’t changed here. I haven’t heard a word about it.”

The dealership, which borders on hurricane-crippled Louisiana parishes, can’t get enough SUVs to sell to people who lost vehicles in the storm. The population of Picayune has tripled with evacuees and emergency and construction workers — many of whom are replacing or buying new vehicles.

“I think this boom will last another year but some think it will last five years as construction workers and new residents pour into the area,” Herring said. “Picayune had a 20-year growth plan that took place in a few weeks.”

‘Revamping and responding’

However, on the other end of the spectrum, Moak sees fuel efficiency as a real concern for many auto shoppers outside the hurricane-ravaged area. “We had a guy trade in a Hummer this week. He said he didn’t need it anymore,” he said. “There still appears to be a consistent demand for SUVs but automakers are coming out with new smaller models. The industry is revamping and responding to consumers and part of that is driven by gas mileage.”

He says the public makes choices with its pocketbooks and the manufacturers listen. There is a renewed interest in small vehicles. Honda responded with what Moak calls an entry-level vehicle, the Fit. It’s designed to be very fuel efficient, sell for $13,000 to $14,000, yet still have a lot of features. Toyota, Nissan and Pontiac are bringing out the same type vehicles.

Moak says the last 10 years in the automobile industry have been the classic example of having a supply greater than the demand. “Each manufacturer has tried to have their brand out there with lots of choices — maybe too many,” he said. “That keeps prices down and the public has won.”

He points out that there are 800 models of automobiles sold in North America. Features once thought to be luxury items are now becoming standard fare. “We rarely sell a car without power windows,” he said. “Now, navigation equipment is becoming more prevalent along with DVD and entertainment systems. We’re seeing more and more of that.”

He said the family of automobile of dealers in Mississippi is eager to serve and has every brand — fuel efficient and otherwise — that consumers want.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.

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