Thursday, October 11, 2012

US go small on cars


The USA has always had a reputation for larger than life, petrol thirsty cars whether 4×4’s, muscle cars or SUV’s.. the bigger the better. It seems however that this trend is changing, with the US motor industry reporting a significant increase in small car sales. Sales of small cares in fact rose a huge 70% in a year.

Downsizing

Bob Shanks , Ford’s CFO and Mary Barra, VP for GM both said that that this trend in Americans buying smaller cars was permanent. Ford, having experienced its best sales figures of small cars for 10 years sold 73% more than this month last year. GM reported a 97% increase in sales from September last year and Crysler reported a 51% increase.

Change in lifestyle

This is a change in the US lifestyle, particularly with a move towards more urbanized living, this reduction in large cars for a more practical replacement is expected to increase. The trend could also be explained by rising fuel prices, however some predict that small car sales will falter if fuel prices go down, or when the consumer wallet has acclimatized to more expensive fuel. After all fuel seems to be the main barrier to owning a large vehicle as road taxes and motor insurance premiums are very low compared with the UK and other EU countries.

Change negligible?

Crysler’s VP, Mr. Ranieri however stated that these sales figures were not significant and only due to the fact that previous sales of small cars have been so small.. they only make up 21% of US cars whereas SUV’s make up 25%.

Some sceptics believe that the ‘bigger is better’ philosophy is deeply engrained into the American psyche and thus the foremost barrier to the proliferation of small cars. Indeed although this may well be the case, it is important to take into account America’s vast scale and the cultural differences that exist between city and country. Persuading rural southern communities to switch to smaller cars could prove fruitless for marketers. Certainly, if we see the fuel-guzzling car as the symbol of a Republican America, the latest sales trends should prove a good omen for Obama and the Democrats in the upcoming election.

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