July 8, 2004

Surveys show shift towards smaller, more fuel-efficient vehicles

Irvine, California – Recent surveys by Autobytel show a strong shift toward smaller, more fuel-efficient vehicles and away from larger vehicles. Autobytel is an online car purchase referal service available to US residents.

Overall, relatively small, fuel-efficient cars showed big gains in the second-quarter of 2004, with requests to buy the fuel-friendly Volkswagen Jetta and New Beetle up 30% and requests for the Honda Civic up 29%. The upswing in requests for the Civic moved the vehicle to the 2nd spot in Autobytel’s year-to-date ranking of its most requested vehicles, just behind the popular Honda Accord. The Mazda6 and Hyundai Sonata (both up 23%) continued to be popular with online shoppers in the second quarter, while the Mazda3 made its debut among the most requested vehicles overall on the Autobytel network.

According to Autobytel’s consumer data, hybrids are quickly entering the car-buying mainstream. Toyota has enjoyed the biggest increase in vehicle Purchase Requests of any vehicle on Autobytel’s network this year — generating a 41% increase in Purchase Requests in the second quarter alone. The once-flagging Honda Insight, meanwhile, is resurging with a 30% gain in Purchase Requests since Q1 2004.

According to a recent Autobytel survey of automobile dealers, thirty-three percent of dealers surveyed said fuel efficiency outweighed brand, styling, performance, safety and roominess as a consumer buying consideration. Eighty-two per cent of dealers, meanwhile, said their customers are more interested in fuel-efficiency and/or fuel- efficient vehicles than they were a year ago. The majority (52%) said they’re now having a harder time selling SUVs or trucks than a year ago, despite hefty incentives on many of the larger domestics. While 51% said they would make no changes in their inventory mix, nearly half (45%) said that they are adding, or will soon add, more fuel-friendly vehicles to their inventory mix at the expense of larger trucks/SUVs.

Another recent Autobytel survey, which queried 3,000 shoppers on the company’s car buying web sites, reflects the online buying trends illustrated above. Forty-four per cent of those surveyed indicated they would shop for a smaller vehicle with better fuel-efficiency, while 60% said they would sacrifice interior space and performance for better fuel-efficiency.

The flip side of the soaring popularity of smaller, more fuel-efficient cars is lower demand for trucks and SUVs. Purchase Requests were down for the most popular trucks and SUVs — with the biggest drop-offs suffered by the biggest models. Requests for the Ford Expedition, for example, were off 25% versus Q1 2004, while requests for the Hummer H2 — the one-time darling of the utility set — fell 47%. The honeymoon for the new Nissan Armada, meanwhile, appears threatened, as requests fell nearly 18% in the second quarter. Other import SUVs did not fare much better than their domestic counterparts, with the Toyota Sequoia down 12%, the Toyota Land Cruiser 30% off the pace and the Volkswagen Touareg dropping 37% since the first quarter.

Minivans were an exception. The minivan category continues to defy the downward trajectory of its SUV/truck brethren. The Ford Freestar is leading the rebellion, with a 67% increase in requests in Q2 2004 vs. Q1 2004. The Chrysler Town and Country (up 16%), Mazda MPV (up 12%), Dodge Caravan (up 11%) and Dodge Grand Caravan (up 8%) are also bucking the smaller-is-better trend. Recent redesigns and upgrades appear to be popular with family car shoppers, such as the new Toyota Sienna and Chrysler’s Stow ‘n Go seating and storage configuration. All three DaimlerChrysler minivans — the Chrysler Town & Country (+16%), Dodge Caravan (+11%) and Dodge Grand Caravan (+8%) posted solid gains in the second quarter. Combined, Dodge and Chrysler minivans are up 12 over the first quarter of 2004.

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