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Old 04-02-2004, 06:16   #1 (permalink)
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U.S.:For Americans,Gas Guzzlers Are Again Kings of the Road

NEW YORK TIMES
By DANNY HAKIM

DETROIT, April 1 - Gasoline prices may be at an all-time high, but that is not deterring Americans from buying gas guzzlers.

Maintaining a trend that dates back more than a decade, American buyers continued to shift from passenger cars to the largest and least fuel-efficient new vehicles that auto manufacturers offer, even as gasoline prices soar, according to the industry's March sales reports.

National average pump prices hit $1.76 a gallon on Monday, the highest on record, according to the Energy Information Administration. But when inflation is taken into account, gasoline remains cheaper than it was in 1981, when prices peaked at just under $3 a gallon in 2004 dollars.

Large pickup trucks, large sport utility vehicles and luxury vehicles of all kinds remain favorites of new-car buyers despite their thirst for fuel.

"These three major segments continue to drive overall industry sales," said George Pipas, chief industry sales analyst at the Ford Motor Company. "Consumers have been unwilling, at this point, to trade off short-term fluctuations and translate that into a different kind of vehicle purchase, in either size or performance."

Over all, the industry sold 3.75 percent more vehicles last month than it did in March 2003, when consumer concerns about the impending invasion of Iraq helped keep sales sluggish, according to Ward's AutoInfoBank. The latest monthly sales translate into an annual selling rate of 16.64 million vehicles.

Still, sales for the first quarter of 2004 fell short of analysts' expectations, a concern in a market that appears to be growing saturated with cars and trucks.

The share of the American market held by the Big Three domestic automakers - General Motors, Ford Motor and the Chrysler division of DaimlerChrysler - fell to 59.1 percent in the quarter, according to the Autodata Corporation.

But Honda, usually a potent rival to the Big Three and the most car-focused of the major automakers, saw its sales fall by 4.8 percent in March and its share of the market decline in the first quarter to 8 percent from 8.3 percent last year. Sales of Honda's two leading vehicles, the Accord and Civic sedans, fell by 13.3 percent and 6.3 percent, respectively, in March.

"We have been seeing sales increase consistently for the light-truck side - that has been the trend, no doubt about it," a Honda spokesman, Yuzuru Matsuno, said. "But the midsize sedan and compact sedan segments have been suffering."

G.M., whose sales rose 6 percent last month, sweetened the pot for consumers on Thursday, offering $1,000 cash back on top of no-interest financing for many of its sport utilities and pickups, in a promotion it called "Truckfest."

G.M. reported one notable exception to the American driver's big-rig sweet tooth: weak Hummer sales, off 26 percent for the quarter. But G.M.'s Cadillac brand had a strong March, with sales up 16.3 percent. Sales of the Escalade S.U.V. rose 9 percent. The super-sized Escalade ESV was up by 7.2 percent in March, and by 25 percent for the quarter.

Prices for Escalades and Hummer H2's both start at around $50,000, but G.M. did not offer nationwide incentives on the Hummer, as it did for the Escalade.

Industrywide, large sport utility vehicles accounted for 5.48 percent of all sales in March, up from 5.15 percent a year earlier, according to Ward's. Large pickup trucks rose to 14.4 percent from 13.2 percent a year ago, while smaller pickups' share fell to 4.15 percent from 4.6 percent a year ago.

Even Porsche, whose name was associated almost exclusively with luxury sports cars just a few years ago, sold more than twice as many trucks as cars in the first quarter, mainly on the strength of its Cayenne S.U.V.

At what point will fuel prices start affecting purchasing decisions?

In interviews along a strip of car dealerships on West Central Avenue in Toledo, Ohio, this week, dealers and customers said that it was hard not to suffer sticker shock at the gas pump. But they also said it would take higher prices over a longer stretch of time to alter their vehicle buying habits.

"I think at $3, they'll be moaning and groaning," Don Ansted, the general sales manager at Jim White Toyota, said of his customers. "But they pay $4 or $5 a gallon for water, and most of it's tap water, from what I'm told. We don't have anybody trading in the big S.U.V.'s for small cars."

Walter Scholl, 71, was trading in his red F-150 pickup for a new beige one at the Ford dealership down the road. Mr. Scholl, who works at a lawnmower repair shop, said he would not consider a smaller truck, even if gas prices kept rising.

"You get around $2 or something and it would make a difference," he said, "but I'd just cut back on my driving."

In Toledo, service stations were charging about $1.70 a gallon for unleaded regular, according to AAA, formerly the American Automobile Association. In the Northeast, prices tend to be higher - as much as $1.93 a gallon in New York City, compared with $1.82 a year ago. The highest prices are in California, where regular is averaging $2.12 a gallon, AAA said.

Nationwide, regular gasoline costs 28 cents more a gallon now than it did at the beginning of the year, according to government figures. That would increase the cost of filling a Cadillac Escalade ESV's 31-gallon tank by $8.68, to $54.56 - though a Cadillac buyer might choose a higher octane instead of regular and pay even more.

The continuing shift toward larger vehicles was also propelled by a host of new products. For example, Nissan recently introduced three new full-size vehicles: the Armada and Infiniti QX56 sport utilities and the Titan pickup. They helped Nissan to its best month ever, with sales up 30.3 percent from March 2003.

Ford's sales rose 2.3 percent, according to Ward's. The company's redesigned F-Series pickup truck, the best-selling vehicle of any kind in the nation, posted an 18.3 percent gain in March. The No. 2 and No. 3 vehicles are also large pickups: the Chevrolet Silverado and the Dodge Ram.

DaimlerChrysler's overall sales fell 2.7 percent in March, though its redesigned Dodge Durango full-sized sport utility rose 12 percent.

Toyota's sales rose 5.53 percent. One Toyota customer in Toledo, Grace Afridi, said that gasoline was on her mind when she bought a Toyota Matrix, a small car, two months ago.

"My 17-year-old notices - he only buys a little bit at a time," said Ms. Afridi, a real estate agent from Perrysburg, Ohio. "I look at it like groceries: you've got to get it."
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