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New car shoppers value fuel over cool

November 11, 2007|DAVID LAZARUS, CONSUMER CONFIDENTIAL

Oil prices were near record levels last week, our friends at OPEC were counting their cash and La Canada resident Alex Hartunian was shopping for a Prius.

"It's definitely not a cool-looking car," he decided as he examined a 2008 model selling for $27,848 at a Toyota dealership in Pasadena. "But people are talking about oil going to $100 a barrel. That's just nuts."


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I was curious to see what effect skyrocketing oil and gasoline prices were having on car buyers. I also wanted to see what the view from the trenches was after General Motors Corp., the world's largest automaker, reported a $39-billion quarterly loss.

Hartunian, who is 35 and single, wasn't sure about the Prius' styling. It's not exactly a babe magnet. But Hartunian was pretty certain a Prius was the way to go, given its estimated 48 miles per gallon in city driving.

And he was sure of this much: He didn't want an American car.

"We don't make good cars," Hartunian said with a shrug.

There it is. True or not, that's a belief shared by many U.S. drivers, and it's hammering domestic carmakers.

Asian brands, led by Toyota, Nissan and Honda, now account for slightly more than 41% of the U.S. market, and that percentage is rising. GM, Ford and Chrysler account for just over 51% of the domestic market, and that percentage is falling.

Eighteen-year-old Caroline Wilmoth drives a 2007 Toyota Scion tC, which sells for under $20,000 and gets about 23 miles per gallon in the city. She told me that when she went shopping for her first-ever new car she didn't even consider a U.S. brand. "I heard that Toyota, Nissan and Honda were the best cars you could buy," Wilmoth explained.

I'd like to say I found plenty of people at domestic dealerships who could refute that sentiment. But that would be a lie.

Maybe it was the time of day (morning). Maybe it was the day of the week (Thursday). I don't know. All I know is that when I stopped by various American-vehicle showrooms in the Pasadena area, I couldn't find a single customer on hand to chat with. Not one.

Nick Nielsen, the sales manager at a Buick and Pontiac dealership, made no secret of his displeasure as we chatted in his all-too-quiet workplace.

"The car market is terrible, if you want to know the truth," he said. "Across the board."

At his dealership, Nielsen observed, sales were down about 40% from a year ago. And they were down last year as well.

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