Gas prices eat into sales of large SUVs

Sales of large sport-utility vehicles and other gas-guzzlers slipped in the first two months of the year in a sign that rising fuel prices could take a bite out of one of the auto industry's most profitable segments.

The full-sized SUV segment lost 1.2 percentage points of U.S. market share over the last two months and large pickups were down about 2 percentage points, according to Edmunds.com, which tracks the industry.

Fuel-efficient compact cars, on the other hand, gained 2.2 points in the same period.

A separate study from Power Information Network, which tracks daily auto industry sales, found a widespread decline in the share of people trading in their old vehicle for a large SUV.

“Rising gas prices are certainly a contributing factor to this trend,” said Tom Libby, senior director of industry analysis at Power. “We’ve had two dramatic increases in gasoline prices in the past year, and that begins to have an impact on consumers.”

Large SUVs and full-sized pickup trucks account for close to 80 percent of North American automotive profits for Ford and General Motors, according to one analyst, so any shift to smaller cars could spell trouble for the automakers.

“The concern, of course, is that the slowdown in these categories may represent the beginnings of a structural change, perhaps sparked by consumers’ concerns about higher oil or gasoline prices,” Deutsche Bank analyst Rod Lache said in a recent research note.

Gas prices have jumped this year to over $2 a gallon for regular, on average, and are likely to hit a record $2.15 this spring, according to the Energy Department.

Unit sales of full-size sport-utility vehicles like the Ford Expedition and Chevrolet Suburban fell 5 percent last year, and the trend appears to be accelerating. Libby of Power Information said trade-ins for large SUVs declined for 18 out of the 20 vehicle categories tracked by the company.

"This is not sort of a marginal pattern," he said.

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