US Dealers Changing SUV Strategies as Gas Prices Rise

As Crude oil is currently trading above $91 in New York, it has caused US gasoline prices to top $3 a gallon during the past week, the highest it’s been since October 2008, according to the U.S. Department of Energy. If gas prices continue to rise, some analysts predict a drop in SUV sales on the continent.

Nationwide prices at the pump have increased 7 percent to an average of $3.05 per gallon, 45 cents higher than a year ago. Diesel prices have also risen, reaching $3.29 a gallon, more than 56 cents a gallon higher than last year. Alec Gutierrez, lead analyst for vehicle evaluation at Kelley Blue Book, said he doesn’t expect any large slump in SUV demand unless prices reach $3.50 to $4 per gallon.

“The Ford Escape, the Nissan Rogue, the Honda CR-V and the Toyota RAV4 -- the compact crossover segment -- that's where we'll see a lot of growth in terms of production and sales overall. The American consumer still generally wants to have a vehicle that offers a lot of utility but at the same time they are conscious of the fuel economy that the vehicle offers and what they are going to pay at the end of the month,” said Gutierrez in a recent Automotive News article.

Dealers are being more cautious when building inventories. “Our small SUVs are doing OK but the large SUVs and large trucks have definitely cooled off since the pickup in gas prices,” said Jason Stewart, general manager of Earl Stewart Toyota of North Palm Beach in Florida. However, SUVs are still important in the US market, but people are downsizing to more fuel efficient SUVs instead.