New car and truck sales in the state have fallen more than 9 percent this year, reflecting soaring gasoline prices and a weakening economy, according to the Vermont Automobile Dealers Association.
Marilyn Miller, the association’s executive director, said as Vermonters look to buy more fuel-efficient vehicles there has been a decline in sales of pickups and SUVs.
“I think it’s both the economy and the price of gas,” Miller said. “People are just sort of standing back and it’s certainly affecting buying patterns.”
Vermont Auto Outlook, which tracks new car and light truck registrations, shows that there were 10,458 registrations through the first four months of the year compared to 11,532 registrations for the same period last year, representing a decline of 9.3 percent. Nationwide, sales dropped 7.4 percent.
For the six-month period from November through April new vehicle registrations in Vermont declined an average of 3.4 percent a month compared to an average monthly decline of 5.7 percent nationwide.
Korean brand vehicles took the biggest hit with registrations for Hyundai and Kia declining a combined 23.3 percent this year, followed by U.S. brands falling 16.2 percent and European brands declining 15.4 percent. Only Japanese brands posted an increase with new vehicle registrations up a modest 2.4 percent through April.
At Formula Ford in Barre, general manager Jack Castellaneta said sales are off slightly as car buyers make the shift from trucks and SUVs to more fuel-efficient cars.
“We’re definitely selling a lot more cars than trucks,” Castellaneta said.
The shift to cars from trucks is born out by the Vermont Auto Outlook data. Those figures show that through April new light truck registrations declined nearly 3 percent from a year ago while new car registrations increased 3 percent. New car sales accounted for nearly 40.8 percent of the market share through April while light truck registrations accounted for 59.2 percent.
While $4 a gallon gasoline is sticker shock for U.S. consumers, Castellaneta said Europeans and Canadians have been paying a lot more than that for years. He said sales should return to normal if gas prices stabilize.
Despite record gas prices, he said that for some buyers a truck or an SUV is the only vehicle that will meet their needs.
“The construction workers, the towns, the fleet vehicles, these people need the vehicle to do a job,” he said.
Wade Walker of Walker Imports in Montpelier and the president of the Vermont Automobile Dealers Association, said the decline in pickup and SUV sales is not likely to be reversed any time soon.
“I think that gas prices would have to stabilize and go down and stay down for a bit to change the (buying) habits,” Walker said.
Because of their fuel efficiency, hybrid vehicles are gaining in popularity. For example, Ford’s Escape gets up to 40 miles a gallon and comes with a $30,000 to $35,000 price tag.
For someone contemplating buying a hybrid vehicle, however, Walker said don’t expect to save money buying a hybrid because it’s more fuel efficient.
“The issue with the hybrid is you have to do it as a social measure and not as an economic measure,” he said.
Walker said because a hybrid costs more, most people don’t drive enough miles to offset the cost of the vehicle versus the money saved on increased fuel efficiency.
Castellaneta of Formula Ford added that there is a 10 to 14 week wait before the 2009 Escape models hit the showroom.
Although Japanese brand new vehicle registrations are the only brand to post an increase in sales this year, the one exception is Honda which posted a 5.8 percent decline through April.
At Shearer Honda in Rutland, general manager Kevin Bowie said sales at his dealership are up slightly from last year. Through April, the dealership sold 245 new vehicles compared to 229 a year earlier. He said May sales are on track to surpass last year’s sales figures.
Bowie said there’s no question consumers are downsizing and buying more fuel-efficient vehicles like the Honda Civic hybrid and The Fit.
He said even the all-wheel drive CRV is selling well as buyers downsize to a smaller SUV.
Phil Alderman, who owns the Rutland Chevrolet and Toyota dealerships, is another dealer that has bucked the downward sales trend among dealers.
“Our vehicle sales are ahead of last year at both of our dealerships,” Alderman said.
Through April, Alderman sold 337 new Toyotas compared to 291 a year ago. Chevrolet sales for the same period were 237 compared to 220 last year.
Alderman said that while consumers are turning to more fuel-efficient vehicles, he’s also selling a few more full-size pickups than a year ago.
He said higher gas prices have had a ripple effect on the used SUV and large pickup truck market, resulting in a lower trade-in value.
“That has a lot to do with the market being down as much as anything because the reality of the lifestyle of the people in Vermont, pickup trucks kind of fit into that lifestyle in a big way,” Alderman said.
