While record prices at the pump are starting to nibble away at purchases of big sport/utility vehicles, it's going to take sustained higher gas prices to put a serious bite on SUV sales, according to industry reports.

Recent figures show that while SUV purchases have fallen as much as 15 percent since gas prices spiked upward in May, sales are still up 7.8 percent for the first half of the year. Though the annualized figure beats the 3.1 percent gain in sales for all vehicles sold, it's well behind the 11 percent gain for SUV sales over the first four months of the year.

Economists expect that interest in big gas-guzzlers could further decline if the price of gasoline keeps rising. In markets where gas prices have risen between $2.00 to $2.50 per gallon, it is clear that buyers are postponing purchases of SUVs, or downsizing to smaller-engines vehicles. One of the more expensive vehicles, the Hummer H2 by General Motors, has seen one of the sharpest declines: sales are off nearly 25 percent year-to-date.

In spite of these recent dips, there seems to be no immediate need for SUV makers to panic. Fuel economy ranks low among characteristics Americans consider when buying new vehicles--and it ranks even lower among SUV buyers. Even so, while some automakers find comfort in knowing that Americans still prefer style and comfort to fuel efficiency, others are drafting plans to address a potential shift in consumer attitudes if gas prices keep going up.

(JuLy, 2004)