Study: Large non-luxury car demand decreases

According to a recent study by Polk*, full-size cars are in less demand in the market and therefore comprise a lower percentage of market sales in the auto industry.

According to the firm, this category of the market has declined by over 50 percent in the last five years and in the first three months of the year only accounted for only 2.3 percent of the vehicles sold.

Due to the decreased demand for large cars, dealers have also been stocking less large non-luxury car inventory. According to Polk, the only cars widely available through auto dealers in today’s market are the Impala, 300, Charger, Taurus, Azera, Maxima, and Avalon.

Gas prices cause greater demand for mid-size vehicles

Gas prices may be a leading reason why these vehicles are in less demand. High prices at the pump have kept many drivers off the roads and pushed them to buy smaller more fuel-efficient cars.

Although the national average for gas prices has declined considerably, it still holds at $3.59 for the June 4 week, according to GasBuddy.com**. This is slightly lower than drivers have seen in recent months due to declining oil prices in the market. However, the economic recovery and stabilizing consumer spending have still kept many consumers from purchasing large non-luxury cars.

Large-scale cars like the Impala are averaging slightly above 29 miles per gallon, according to EPA data***. This is in comparison to compact car models achieving up to 40 miles per gallon.

In the absence of large non-luxury demand, mid-size non-luxury cars have been gaining market share. Midsize non-luxury cars now account for 16.7 percent of sales in the industry, and this number is up from 13.4 percent five years ago. Hybrid models are also becoming more prevalent in the mid-size space, further increasing demand for the mid-size vehicles.

It appears that this trend toward mid-size cars will continue as automakers and consumers shift their short-term focus to mid-size cars with greater fuel efficiency.

*according to Polk on May 23, 2012
**according to GasBuddy.com on June 4, 2012
***according to the Environmental Protection Agency on May 22, 2012
via Peter Montanez

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