How do Gas Prices Affect Car Sales? ~ Hybrid Car Review
Hybrid Car Review: How do Gas Prices Affect Car Sales?

Monday, August 06, 2007

How do Gas Prices Affect Car Sales?

It's amazing to me, but it seems that as gas prices drop, interest in fuel efficiency drops even if that price drop only dips below $3. A few weeks ago, I did a simple graph showing the relationship between gas prices and hybrid car sales. While I wasn't surprised to see a relationship between the two, I was impressed by how strong the relationship was. To me, gas prices are high when you see them up over $2 a gallon.

According to the PIN Insights (pdf) (published by Power Information Network, a division of J.D. Power and Associates), sales of four cylinder engines peaked at 38.9% of all retail new-vehicle deliveries the week after gas prices peaked on May 20 at $3.22 a gallon. For one week, four cylinder engines outpaced six cylinder engines. Since then, sales of four cylinder engines have declined until the past week when sales of six cylinder engines sat at 7 percentage points higher than four cylinder engines.

There has been some speculation lately as to a turning point in gas prices when consumer interest truly turns from other interests and focuses in on fuel efficiency. Did we see that point just a few weeks ago?

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