Even with a push toward fuel economy and cleaner vehicles, American consumers still turn toward bigger models when gas prices drop.
That’s one conclusion from this year’s auto sales, which are on pace to break the all-time record set in 2000. That year, auto dealers sold 17.4 million vehicles. Through November, the annualized rate is 17.42 million. So if auto dealers have a decent December, they will set the record, noted Bob Hughes, senior research fellow at the American Institute for Economic Research.
This year’s more robust sales are up from 2013, when total sales were 15.6 million, and gas was markedly more expensive. But more interesting, Hughes said, is the breakdown between cars and light trucks like sport utility vehicles and pickup trucks.
In 2013, gas prices were an average of $3.50 per gallon, with no drop in sight. And Americans were evenly split between cars and light trucks: The 15.6 million broke down into 7.77 million cars, and 7.82 million light trucks.
This year, gas prices have been averaging a much lower $2.46 a gallon through the first 11 months. The 17.42 million annualized monthly auto sales breaks down into 7.75 million cars, and 9.67 million light trucks. That’s a big shift toward larger vehicles, Hughes said.
The shift away from cars to trucks has been going on for a while. High gas prices reversed it from 2005-2009, but the plunge in gas prices since mid-2014 has helped a resurgence in the trend:
“When gas prices go up, everyone’s looking to reduce their gas bill, so they tend to switch down to something more fuel efficient,” Hughes said. “When prices go down, there’s a tendency to go back to the bigger SUV’s and pickup trucks. Everything has gotten a lot more fuel efficient, by law, but there’s still a big difference between cars and trucks.”