- Last Updated: 10:21 PM, July 7, 2012
- Posted: 10:21 PM, July 7, 2012
It’s the fuel economy, stupid.
The auto industry is relentless, paying top dollar for expensive US advertising campaigns that are slick — and sometimes downright puzzling.
A steady stream of ads lately extols fuel economy — just as declining pump prices are making gas-guzzlers more affordable.
Poor timing? Auto execs don’t think so.
“The advertisements are reflective of US consumers’ perceptions of the economy, more so than the price of gas itself,” explained Thomas Maronick, professor of marketing at Towson University in Baltimore. “The price of gas is down, but the economy is still the No. 1 item on everyone’s mind,” he added. “Consumers are not making that conversion today, driving an auto that offers 27 miles per gallon instead of 40 because prices are lower.”
The strategy must be working. Auto sales in the US posted strong gains in June.
Even as prices at the pump fell further, consumers rushed out to buy more juice-saving motors. For example, sales of fuel-efficient autos recently accounted for some 40 percent of General Motors’ auto sales, compared with 16 percent three years ago. GM sold 248,750 vehicles last month, 16 percent more than 12 months ago, on robust demand for small and midsize cars.
Lower interest rates and easier credit helps demand. But it’s the limp economy, rising food prices and high unemployment that subliminally spark demand for autos that claim to deliver 40 miles per gallon. “Consumers are still thinking they need to save money because the economy is bad,” said Maronick.
In a recent survey by Consumer Reports, some 66 percent of auto owners polled are expecting better fuel economy from their next vehicle purchase. And the leading reason for buying a car was fuel economy, the survey found.