Consumer Expectations Rise With Gas Prices

Kicking_tires_jpegJim Mateja discusses the newly released Consumer Reports’ annual Auto Pulse survey.  The good news is that high fuel prices are having a substantive impact on consumers – 79 % are interested in buying a more fuel-efficient vehicle the next time that they’re in the market.


Posted June 27, 2007

By Jim Mateja, Kicking Tires

Thanks to fuel prices that topped $4 a
gallon this year, 79% of consumers are interested in buying a more
fuel-efficient vehicle, like a hybrid or diesel, next time they’re in
the market for new wheels, versus 47% a year ago. That’s according to Consumer Reports’ annual Auto Pulse survey, which it released Thursday.

The
79% figure is nearly the same as the 78% of consumers recently surveyed
by J.D. Power and Associates who said they are interested in a
higher-mileage vehicle.

At the same time, though, 69% of respondents told Consumer Reports
they want their new vehicle to be the same size or larger than the one
they now drive. More than half — 54% — said they are willing to pay a
higher price for a vehicle that delivers better mileage, such as the
premium a diesel or hybrid carries over regular models.

Consumer Reports’ findings
again echo J.D. Power’s results, which found that 46% of consumers are
willing to purchase an eco-friendly hybrid even it sets them back an
average of $5,000 more than a similarly sized conventional car.

The
price premium that hybrids carry had discouraged some purchasers in the
past, but now that the national average for gas has topped $4 a gallon
— it was only $2.96 as recently as February — that’s no longer the case.

Mark Cooper, director of research for the Consumer Federation of
America, says that with hybrid technology and innovations like cylinder
deactivation, which shuts off the supply of fuel when it isn’t needed,
the industry should be able to reconcile bigger size with more
fuel-efficient operation.

And the fact that more than half of consumers say they are willing
to pay a premium should prompt the industry to offer a greater number
of hybrids.

"Hybrids aren’t cheap, yet they’re flying out showroom doors and
there’s a three- to six-month wait for some of them because people are
now willing to pay for better fuel economy," Cooper said.

In April, CFA conducted its own survey and found that 50% of all
consumers hope to get at least 30 mpg from their next vehicle. About
30% want at least 35 mpg.

"But 99% of all vehicles today get less than 30 mpg, so there is a
difference between what people want and what automakers give them,” he
said. “What people buy is a compromise between what they want and what
they find."

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