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Share of Gas Guzzlers Unchanged in Quarter

April 25, 2006|From Reuters

DETROIT — U.S. consumers bought vehicles with big, gas-guzzling engines at an unchanged rate in the first three months of the year despite rising gasoline prices, according to a survey released Monday.

In the first quarter, about 25% of all new vehicles sold in the United States were equipped with eight-cylinder engines, according to sales trends analyzed by the Power Information Network, a data tracking service of consulting firm J.D. Power & Associates, based in Westlake Village, Calif.

The market share of V-8s -- typically the most powerful engines used in trucks and large sport utility vehicles -- was unchanged from the fourth quarter, according to Power Information Network.

The market share of six- and four-cylinder engine vehicles also has not budged in the face of higher gasoline prices, more than $3 a gallon in many areas, J.D. Power said.

Six-cylinder engines represented just over 40% of new-vehicle sales during the last nine months, and four-cylinder engines accounted for more than 30%, the firm said.

If that trend holds, it would be positive news for General Motors Corp., which has staked its product strategy this year to the launch of a new line of SUVs, including the Tahoe and Yukon, which run on V-8 engines.

"So far, the perceived gas price increases have not had any discernible impact on new-vehicle buying patterns, at least with regard to the size of the engine," said Tom Libby, an industry analyst with the Power Information Network.

Despite fear of a consumer backlash against SUVs in the face of higher oil prices, few analysts expect U.S. drivers will defect in large numbers this year to smaller cars with four-cylinder engines.

Rather, most analysts forecast gains for crossover utility vehicles, which are built on car platforms, and even luxury sedans at the expense of the SUV market.

Those marginal shifts in demand are widely tracked since the overall U.S. auto market is expected to be flat at best this year at just under 17 million vehicles sold.

"Gas prices are certainly becoming a popular dinner and water-cooler discussion topic, but consumers appear to be conditioned to prices at current levels," said Jeff Schuster, executive director of global forecasting at J.D. Power.

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