Corpus Christi Caller Times Caller.com - Gas prices don't scare car buyers

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Sunday, February 27, 2000

Gas prices don't scare car buyers
Dealers, makers say nobody's downsizing

In the 1970s, when gasoline prices shot up and supplies became iffy, Ford gave us the Mustang II and General Motors gave us the Chevy Vega.
   For those of you who weren't born yet, suffice it to say that that those cars are two bad memories for Ford, GM and the buying public.
   So, now that Californians and Northeasterners are paying two bucks a gallon and we're paying $1.30 or more, after we paid about 75 cents only a year ago, what are the big auto makers and their dealer networks cooking up for us?
   Same thing we've been buying - big ol' stretch-cab pickup trucks, Suburbans, Expeditions. Oh, yes, and Real Mustangs, the ones with musculature under the hood.
   What a difference a quarter-century makes.
   "When the economy's rolling like it is right now, the price of gas is just not that important," says Bob Lacy Jr. of Bob Lacy Ford. "(Consumers) want to live life and have a good time."
   Consumer strength
   For him, that means selling more F-350 and F-250 stretch cabs, Explorers, Expeditions and Mustangs. The Mustang, by the way, is Ford's top-selling non-truck in Texas.
   For Leon Lester, president and general manager of Allen Samuels Chevrolet, it means selling more Silverados and Suburbans. "Nobody's not buying something because of fuel prices," Lester says. His supplier, the world's No. 1 maker of cars and trucks, sees it the same way.
   "GM will continue to watch oil prices, but as we look at the prices to date, we have not seen a shift in the overall mix of vehicles being bought and sold," GM spokeswoman Gwen Knapp said. "We expect our mix to remain strong and we expect a continued progression in truck sales.
   "We certainly have taken a look at the issue. Basically the higher gas prices are being offset by a couple of factors. One is the underlying strength of the economy and the other is the strength of consumer affordability. Consumers' ability to purchase a vehicle is at a 40-year high."
   Supply is not an issue
   There are a few other reasons why this situation is different from the 1970s. For one thing, Knapp says, the current gasoline price increase would cost the average household an extra $300 to $350 a year, which consumers are willing to absorb. For another, these prices aren't historic highs.
   Also, gas guzzling ain't what it used to be. Today's Cadillacs and Lincoln Town Cars are getting about the same mileage as yesterday's Volkswagen Super Beetle, the gasoline-stingy standard-bearer of its day.
   And supply of gasoline is not an issue. Gasoline, at whatever price, is available. Chevy Metros don't start looking good to Suburban owners who can afford $3-per-gallon gas, until they run out of it.
   When gasoline prices went up during the Persian Gulf War, Creveling Dodge acquired a lot of Suburbans as trade-ins, sales manager Ed Schetzsle says.
   "They traded them in for minivans. That trend hasn't started yet."
   Changing their minds
   This time, the only reaction Schetzsle has noticed so far is that buyers of big pickups are considering the more fuel-efficient diesel instead of the V-10 engine.
   "I kind of anticipated that we would have some repercussions. I really haven't seen it show up," he says. "I thought about putting mileage charts back into advertising. I haven't made that move yet."
   He doesn't expect the pickup truck customer to buy something else because of high gas prices.
   "People who own pickup trucks own them because they need them."
   But some owners of those sport utility vehicles that never get dirty might have a change of heart if prices keep going up, he says.
   "There are a lot of sport utility vehicles out there now and a lot of them are four-wheel drive, and those are the first people who'll say, 'You know, I really don't use my four-wheel drive.' And if the price of gas stays up there, those will be the first people we'll see back in here."
   'Authentic American Muscle'
   Maybe, maybe not. Ford has another idea, a high-performance F-150 supercab pickup designed in collaboration with Harley-Davidson. The companies are promoting it as "Authentic American Muscle." It'll debut in April.
   James Alderton, Ford's regional operations manager, says we'll have to draw our own conclusions about whether the Ford Harley-Davidson F-150 indicates Ford's view of how consumers are going to react to gasoline prices.
   He did point out that the Ford Harley truck is a limited edition. How limited? The company hasn't announced that, so we'll have to wait and see.
   But speaking as an environmentally aware, low-affordability consumer who has been known to bicycle-commute to work and who hates to spend money on gasoline, I have to admit, if I can get that truck with a stick shift . . .


Tom Whitehurst

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