When gas prices were skyrocketing this year, American car buyers quickly and overwhelmingly made fuel efficiency their top priority. That led to a massive shift toward smaller vehicles. Hybrids like the Toyota Prius and Honda Civic Hybrid flew off dealer lots.
Now that gas prices are sliding back down, one national survey found that car buyers are already rethinking their new obsession with high-mileage little cars. Edmunds.com research found that in July truck owners dramatically reduced the extent to which they cross-shopped in the other major vehicle segments—cars, crossovers and hybrids—compared with June. SUV owners were also fickle, but to a lesser extent.
Consideration of hybrids on Edmunds.com was down 34 percent for the week ending August 3 compared with its peak in June. Similarly, midsize-car consideration was down 13 percent in the same comparison; compact-car consideration declined 18 percent; and subcompact-car consideration declined 7 percent. However, the consideration for those segments was still up compared with December of last year.
At the same time, in July, consumers’ consideration of formerly shunned segments, such as large crossovers, minivans and sports cars, began bouncing back.
Separating Short-Term and Long-Term Hybrid Trends
The latest Edmunds.com data indicate that the industry may have overreacted to the consumer shift. However, other industry observers—and the auto industry itself—are less convinced that consumers are really that fickle.
Lonnie Miller, director of industry analysis for R.L. Polk & Co., told Hybridcars.com that his research indicated that the long-term prospects for hybrids are solid. He sees the shift noted by Edmunds as likely affecting potential hybrid buyers who are part of the broader market that have only recently started to consider hybrids. The core hybrid market of consumers interested in fuel efficiency for environmental or financial reasons will continue to grow as it has since hybrids first became available, according to Miller.
One supporting piece of consumer research was released last month, indicating that hybrid buyers were among the most loyal in the market. Forty-seven percent of hybrid buyers buy the same make on their next purchase, compared with 35 percent of buyers overall, according to Experian Automotive, a division of global information provider Experian. Eighteen percent of hybrid car buyers even buy the same model, compared with 12 percent overall.
A second study by Maritz Research found that hybrid buyers’ loyalty could be measured in another way. When asked whether they would consider a hybrid version of their new vehicle had it been available, roughly seven in 10 said they would. When considering purchase of a new vehicle, those who choose hybrids are motivated by a desire to obtain an environmentally-friendly vehicle, but even more importantly, to achieve the greatest level of fuel economy, Maritz found.
According to Maritz research, this pattern differs markedly from that demonstrated by vehicle buyers overall, who are divided in terms of what they consider most important; the maximum proportion choosing reliability—at about 11 percent.
The dueling research appears to show that the hybrid segment will continue to exceed supply—though possibly not at the hyper-heated rate of recent months that has produced dealer premiums and long waiting lists.