New Automotive Study Points To Increased Demand For Trucks

IHS Automotive recently released a study on the impact of oil price declines and the impact on automotive retail. The study found that lower oil prices should have a positive impact on the U.S. auto market in the “near term.” Those low oil prices have been rising. AAA reported on February 9th that the national average for a gallon of regular gas was $2.18, a twelve-cent rise from the week prior. Prices have been going up since hitting a bottom near the end of January.

For the U.S. retail automotive market, lower oil prices in general are expected to mean better sales, including sales of larger vehicles. Part of the report reads, “U.S. vehicle manufacturers are ramping up production plans for larger light trucks – including SUVs and pickups – at the expense of the smaller B- and C-segment vehicles.”

The report found that consumer confidence in North America is expected to rise with the drop in fuel prices as vehicles become less expensive to own. The changes in vehicle preferences and types of vehicles sold are not expected to change greatly outside of the North American market. The same goes for the impact that lower fuel costs will have on drivetrain technology development. On this subject, Phil Gott, Senior Director of Long-Range Planning at IHS Automotive, said in a statement, “The unexpected decline in fuel price has been too fast and is expected to be too short for any major changes in investment strategy and technology rollout timing. These changes will impact short-term production plans in locations around the world, and at first glance, may be counterintuitive.”

The decline in oil prices will reportedly not change the demand for diesel vehicles. Even with the cost of diesel fuel down in the U.S., the demand is expected to remain the same with diesel trucks being an attractive option for consumers searching for “high-torque and long cruising range” vehicles. Have you seen an increase in demand for larger light trucks at your store? Are clients talking to you about low gas prices? Do you think retail automotive can count on a continual boost from low fuel prices?