High prices make consumers turn to fuel-efficient vehicles
As gas prices soar across the nation, Morgan Hill residents are also feeling the pinch.
Prices for regular unleaded gasoline in Morgan Hill range from $3.07 per gallon at the Valero station at Dunne Avenue and Monterey Road to $3.23 per gallon at the Cochrane Chevron station on Cochrane Road.
Roy Gonzales, who was filling up his 32-gallon tank at Morgan Hill Gas on Condit Road Tuesday stopped at $80.
“I just didn’t want put my credit card back in again,” he said.
But are the rising gas prices causing consumers to purchase more economy-sized cars and compact SUVs?
“This is a total shift,” said Jesse Toprak, executive director of industry analysis with Edmunds.com. “Five years ago they wouldn’t have even asked. It’s not crisis mode … but I think if people are ready to buy a new vehicle, they will seriously consider something that is gas efficient.”
As of last week the cost of regular gas has jumped at least 40 cents higher than last year, according to the American Automobile Association. This week alone, gas has jumped nearly ten cents a gallon in Morgan Hill, more at some stations.
And on Tuesday in San Jose, the average price topped out at $2.94 a gallon and actually rose to $2.98 just one day later. A month ago, the average price of gas in the city to the north was $2.65 and a year ago $2.64, according to AAA.
Those pumped up costs at the gas tank have definitely affected the sale of local vehicles. Since the beginning of the Iraq War, when the price of oil began to rise, the sale of SUVs has continued to plummet, said Gilroy Honda Sales Manager KB Samaha.
Large eight-cylinder SUVs flooded the market and dealerships weren’t interested in buying the vehicles for trade-in, considering the weak resale value, he said.
“The smaller SUVs survived, the (Honda) CR-V, the (Toyota) RAV4,” Samaha said. “The bigger cars, the gas guzzlers, went down and they’re still affected.”
Toprak concurs. The analyst said extra large vehicles, such as the Suburban, Expedition and Tahoe, are the only subset of the four SUV models that showed a significant drop.
But rising gas prices don’t have any sway on luxury sports utilities since individuals purchasing big ticket items such as the Hummer and Range Rover, aren’t likely to sweat over forking extra cash for fuel, Toprak said.
Also, sales of large trucks aren’t impacted by inflated fuel costs because farmers and construction workers need the vehicles for hauling tools and other materials. They purchase the vehicles out of necessity and don’t have the luxury of considering gas prices.
Morgan Hill’s Courtesy Chevrolet has not been affected as much by the rise in gas prices.
“We’re very fortunate to live in an area where everyone wants to drive something safe for their family,” said Courtesy Chevrolet salesman Guy Aki. “We are still selling a ton of SUVs and large pickup trucks. People still want to drive their cars. We live in a community that is agricultural, some families have three and four kids; also many families are sports-oriented, and you can’t pile a bunch of teammates and their gear in some of the smaller vehicles.”
The Chevy Tahoe, Aki said, is a good choice for someone concerned about gas mileage but needing the room offered by a larger SUV.
“They blow away the Nissans, the Toyotas that have got into the big market,” he said. “They are number one in mileage because of the new technology and being first in the industry to have this model motor, Active Fuel Management.”
One of the telling signs that individuals are more focused on gas price gauging is evident when consumers opt for two-wheel drive vehicles since they get a little bit better mileage than four-wheel drive vehicles, said Gilroy Honda Internet Manager Aaron Claverie.
Also, the Ridgeline gets better gas mileage than the majority of large trucks.
“That’s the thing that Honda was known for, especially in the gas crunch of the late 1970s, that’s when the Accord kind of burst onto the scene,” Claverie said. “One of their whole business philosophies is making sure that their cars are environmentally friendly and fuel efficient.”
Although most local dealerships have waiting lists for hybrids and the cars are snatched up once they hit the lot, the vehicles still only account for 1 percent of all car sales. Still, hybrid sales were up 37 percent during the first three months of this year.
