In the United States, the automobile industry has been witnessing an SUV boom for much of the last few decades. SUVs and trucks have combined for 67% of new car purchases this past year, and cars have witnessed a trend in the opposite direction, showing a 10.8% loss in sales when compared to SUVs and trucks for the first quarter of 2017.
Even though gas prices are going to reach their highest price over the last three years this upcoming summer, consumers are likely to not waver from their commitments to SUVs. With today's models boasting improved gas mileage and cargo space, consumers are willing to dish out the extra cash per tank in order to obtain the benefits that come with driving an SUV, like comfort and passenger seating.
While the SUV purchases will continue to surge, it is going to be intriguing to see if any other industry is hurt by consumers' choice to allocate more financial resources to their cars, because these consumers will, comparatively, have less money to purchase other everyday items.
Do you see any other industry being hurt by this, or the boom slowing down?
https://www.foxbusiness.com/markets/surging-gas-prices-unlikely-to-dent-suv-boom
4 comments:
I agree that there are many benefits to driving SUVs, and safety is a large one. This will definitely help the boom keep going. However, I find it interesting that there aren't many fuel efficient SUVs. Also, the rising gas prices are a potential threat, yet I don't feel that the price will rise high enough to slow down the SUV sector's growth.
Another factor to consider is the decrease in the success of Tesla. Many people thought that Tesla was the new horizon of cars but interest has fallen. This could be due to the fact that people are set in their preferences for SUVs.
This shows the customer’s purchasing behavior does not only depend on the cost, but also other factors like safety and comfort. According to the article, gas prices are going to reach their highest price, which means that the prices would decrease after that. In the short term, the SUVs owners have to pay more, but in the long term, as the prices of gas decrease, they would pay less.
I would not have guessed this article to be true. I had been under the impression that SUV sales were in decline ever since the Hummer craze died. After researching recent SUV sales in the U.S., I believe the trend will extend into the foreseeable future. Cars are becoming less expensive to manufacture combined with increasing fuel efficiency.
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