AID Newsletter banner July 2014 the publication for automotive industry executives
Subscribe  |  FREE SAMPLE   Front Page Editions  |  Current Issue page 1  |  BACK COPIES  |  Info  |  REPORTS  |  CONSULTANCY SERVICES  |   CONTACT  |  MEMBERS 
BRIC  |  CHINA  |  DIESELS  |  EDITORIALS  |  ELECTRIC  |  NEW PRODUCT  |  PREMIUM BRANDS  |  STOCK MARKET VIEW  |  TRUCKS  |  USA  |  WESTERN EUROPE

EDITORIAL  FULL ARTICLE 
When fuel is cheap buyers head for larger cars 

Published: Mon, 16 Mar 2015 10:21:11 GMT
 

Mercedes GLK Germany street January 2015

Open quote signIt simply couldn’t escape your attention, whether you drive in Europe or the US, today it costs a great deal less to fill up your car. None of that has escaped the attention of Joe Public. 

History shows that more buyers opt for less thirsty smaller cars when fuel prices are high. 

The converse is also true, provided there are no other limits. 

Given today’s markedly lower pump prices, to a notable section of today’s car buying public the shift to more fuel economical cars no longer makes sense.

Germany’s new car buyers are no exception to these trends. 

With February’s diesel pump prices nearly 20 per cent down on the same month in 2013, Germany’s small car sales tide is on the retreat. 

The smaller, more fuel-efficient cars are the losers, and the larger and heavier, thirstier cars are the winners. 

Spare a thought for the carmakers. 

Perplexed, they are forced double-quick to review their product plans. 

Contrary to what all their earlier consumer pulse-sensing was telling them, consumers the world over are flocking into the trendy SUV-Crossover market. 

No less so in ‘green’ Germany. 

Here, regardless of gentle persuasion to the contrary, more upbeat townies and suburbanites have ditched all earlier intentions to opt for a green-halo car. 

Instead, they have turned back to larger cars, and SUV-Crossovers in particular. 

Moreover, the idea to ‘pink it and shrink it’ to win the increasingly crucial women’s vote, is passé. 

Instead, today’s women are hankering for muscle-bulging SUV-Crossovers, and if the family budget will bear it, a Porsche Cayenne. 

In fact, the market has reached a crossroads. 

This January SUVs have replaced Germany’s Small-Car segment as the second biggest segment. 

The Small-Sector car share slipped to 18.4 per cent, while the same month sales share going to SUV-Crossovers rose for yet another month to 19.3 per cent. 

No surprise there. 

Consumers’ flight from conventional cars to generally larger and heavier SUV-Crossovers has been with us for years. 

In 2009, during the depth of the recent recession, SUV-Crossovers were responsible for just 6.8 per cent of Germany’s new car market. 

By close of 2013 their sales share had catapulted to a best-ever 13.9 per cent. 

That’s a doubling in market share in less than a handful of years. 

Partly as a response to today’s notably lower pump prices, last year’s SUV-Crossover share soared to 17.9 per cent, rocketing to 19.3 per cent this January. 

No trend change in sight.

Germany’s KBA, said only yesterday that this February sales of SUV-Crossovers rose 21.4 per cent. 

That’s more than three times faster than the 6.6 per cent overall car sales growth seen last month. 

Reading from the same script, the KBA says that February’s electric car sales reached 436 units; that’s 0.2 per cent of February’s car sales. 

Hybrids are in the same leaky boat. Last month, just 2,061 found buyers, with the PHEV type accounting for a third of these. 

By comparison, AID data shows that during the whole of last year just 24,200 hybrids were sold in Germany – that’s 0.8 per cent of last year’s overall sales. 

No surprise, some 18,800 were Toyota-Lexus hybrids. 

All other car manufacturers, including domestic champions Volkswagen, as well as premium car makers Audi, Mercedes, BMW and Porsche, shared the remaining 5,400 in Germany last year. 

During the peak oil price era in mid 2008 fuel-guzzlers won no prizes for popularity, but Sports-Utilities stood out as particularly unloved. 

Fast forward to the very recent past and the near miraculous return to lower pump prices. 

Not only in the US and Europe, but almost anywhere else on the planet, SUV-Crossovers were transformed from villain to hero. 

By contrast, it’s hybrids and electric cars in particular that have turned into an autoindustry sob story
Close quote sign

To continue reading this article, please register for a free sample without obligation...

Please note that eagleAID.com is a subscriber-only site, and as such it can only be viewed by subscribers to the newsletter.