The rebound of the U.S. automotive market in 2014 has been marked by particularly strong sales of pickup trucks and sport utility vehicles, consistent with the affection many American motorists have for large vehicles.
Moderating fuel prices nationwide are stoking sales, as well as demand for new vehicles to replace those that have been on the road an average of 11 years. Consumer confidence has been at multi-year high levels, and the jobs picture has improved steadily as well.
Hybrids and battery-powered cars, by contrast, lately have struggled with a few exceptions, notably Nissan’s Leaf electric vehicle, up nearly 25% through the first ten months of the year. Toyota’s popular Prius hybrid is down more than 11% for the year.
Overall, vehicle sales rose 6% in October from a year ago and are on track to reach a total of between 16.4 million and 16.5 million by the end of the year. Ford Motor Co (F) said utility vehicles and trucks accounted for 72% of its sales for the month, up from 68.5 percent a year ago.
Fred Diaz, Nissan’s senior vice president of sales and marketing for North America, told the Wall Street Journal “when you look at the economic indicators, everything is either positive or neutral. We all know there still is a huge pent-up demand out there.”
Gasoline prices are averaging below $3 a gallon nationwide for the first time in three years. The drop alleviates worry that consumers will get hit in their pocketbooks each time they fill up; it also provides extra cash to household budgets. But the low fuel prices also could portend economic trouble.
“Initially, (a lower oil price) will provide a boost to an economy that already has some momentum,” Diane Swonk, chief economist at Mesirow Financial told the Associated Press. “It’s like a tax cut. The problem is that it will come back to haunt us in 2015” to the extent it reflects a weakening global economy.
Of the five top-selling vehicle models in October, three were fullsize pickups – Ford F150, Chevrolet Silverado and Ram – one was a small crossover, the Honda CR-V. Toyota Camry was the only car to crack the top five.
Through the first 10 months of the year, vehicles classified as light trucks accounted for 51.6% of the U.S. market, while 48.4% were passenger cars.
Minivans, up nearly 6% this year, are half as popular proportionately as they were a decade ago. Minivans have been overtaken by new crossover models that provide more room for passengers. Crossovers are based on car architectures, making them lighter than minivans or truck-based sport-utility vehicles. The minivan sector is dominated by Fiat Chrysler Automobiles (FCA), whose Dodge Caravan and Chrysler Town and Country models account for half the market.
Federal and state regulators have tightened fuel-efficiency restrictions while providing incentives to manufacturers of alternative-fuel vehicles such as the Leaf to reduce consumption of energy. The initiatives have worked to make vehicles lighter and to make their propulsion systems more energy efficient.
But the government hasn’t stifled American preferences for big vehicles.