US dealers to offer more small cars, frugal crossovers due to gas price hike

Article by Christian Andrei, on February 24, 2011

Because of the continuing political turmoil in the Mideast, many U.S. auto dealers expect gasoline prices to keep rising. As a result, they will make adjustments on their product mix and will stock more small cars and fuel-efficient crossovers.

The U.S. Department of Energy said that the average national gasoline price is about $3.19 per gallon -- about 54 cents higher than a year ago. And since it doesn’t appear like the political unrest in Middle East from Egypt to Libya will be resolved anytime soon, gasoline prices are expected to soar.

In commodities trading today, the price of West Texas Intermediate crude oil rose 13% to $97.97 a barrel. John Pitre, general manager of Motor City Auto Center in Bakersfield, Calif., said that many auto dealers will be changing the combination of products that they offer because of rising gasoline prices.

Pitre, who sells GMC, Buick and Lexus vehicles, added that hybrid demand has been “pretty weak” in the past two years but that it is expected to now come back to life.

As Pitre's inventory doesn’t have GMC's more fuel-efficient products such as the Terrain and Acadia crossovers and diesel pickups, he plans to order more. George Pipas, Ford Motor Co.'s chief sales analyst, said that the U.S. small car segment comprised about 14% of U.S. auto sales in 2004.

But by 2009, it had increased to 21%. It fell to 19% last year. But since late fall and into January, the small car segment has gone up by two points to reach 21% of industry sales. Pipas attributes this “mostly to gasoline prices creeping up.” [via autonews - sub. required]

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