Smaller cars are in as gas prices keep rising ~ Hybrid Car Review
Hybrid Car Review: Smaller cars are in as gas prices keep rising

Wednesday, August 02, 2006

Smaller cars are in as gas prices keep rising

Sixty two percent say smaller cars are hot, but more importantly to the overall economy, a lot of people are making changes to their buying lifestyle to accomodate the rising gas prices. That includes eating out less, fewer major purchases and less vacation and travel.

Press Release follows:

BIGresearch Survey Reveals That Small Cars Are Hot, But Big Vehicle Owners Are Willing to Make Sacrifices to Keep on Trucking

According to BIGresearch's July Consumer Intentions and Actions Survey (CIA), when asked if small cars are hot, nearly 62% of over 9,000 respondents said "yes." The survey divided those respondents into categories based on the vehicle they currently own -- from cars and hybrids to trucks, SUVs, minivans and cross-overs (a cross between a car and an SUV) -- to see what role higher gas prices might play in the trend toward small car preference.

"It's clear, especially among truck owners, that people are willing to drive less, spend less and consider every option to equalize the impact of rising gas prices -- including buying a smaller car," said Gary Drenik, president and CEO of BIGresearch. "In fact, those who own trucks have deferred major purchases (35%), reduced dining out (55%) and decreased vacation and travel (58%) just to be able to fill their gas tanks."

The survey revealed that over 60% of truck owners are making fewer shopping trips, plus they are shopping closer to home, using coupons more often and doing more comparative shopping both online and with newspaper ads and circulars.

On the flip side, owners of cars and hybrids are not cutting back so drastically. When asked at what price per gallon gasoline would have to reach before they would change their driving habits, 44% said their driving habits would not change, regardless of price. In addition, 57% of car and hybrid owners said that fluctuating gas prices have had no major impact on their spending.

"The math is simple. When gas prices have gone up over 30% in the last year, a smaller car plus better mileage equals more spending money in the consumer's pocket," said Drenik. "That's why even the most devoted truck and SUV fans might be willing to buy a smaller car."

Of all the respondents to the survey who said they are planning on buying a new vehicle in the next 6 months, 75.9% of car owners said they would consider buying a car, 37.1% of truck owners, 30.6% of minivan owners and 47.3% of SUV owners.

"If gas prices continue to soar, small cars could be the biggest thing going for the automotive industry," said Drenik. "However, if people continue to have to make sacrifices in order to drive, retailers, entertainment and other industries will have to work harder and market smarter to capture ever-shrinking consumer dollars."

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