Report: Increasing fuel prices drive hybrid, diesel and small car sales in US to outpace market in 1Q 2011

US Sales of hybrid, diesel, and very small cars outpaced overall growth in the market, according to a new report by auto analyst firm Baum and Associates. Sales of hybrids grew 33.9% in 1Q 2011 compared to 1Q 2010; diesel grew 42.9%; and small cars such as the Ford Fiesta and Honda Fit grew 23.3%. Sales of all light-duty vehicles in first quarter grew 20.2%. These results led to a hybrid new vehicle marketshare in 1Q 2011 of 2.3%; a diesel marketshare of 0.6%; and a small car marketshare of 3.4%.

For March 2011, hybrid sales grew 46.4% year-on-year; diesel sales grew 46.1%; and small car sales grew 30.0%. March 2011 new vehicle marketshares were 2.7% for hybrids; 0.7% for diesels; and 3.6% for small cars.

By contrast, Baum notes, sales of SUVs grew only 7.2% in 1Q 2011, for a marketshare of 7.8%, while sales of small crossovers grew 43.7% in 1Q 2011, for a marketshare of 9.3%.

The growth rate of small cars and crossovers relative to the overall market growth is very positive, with the small car growth rate almost doubling overall vehicle growth in March. Conversely, SUVs and pickups trail the overall market significantly. For the first quarter, small crossovers double the overall market growth rate. Given these growth rates, market share for small vehicles is impressive, with share declining in SUVs and pickups.

—Alan Baum

Baum attributes the shift to smaller vehicles to the 30% increase in fuel prices compared to a year ago.

Used vehicles. Baum notes that the used vehicle market provides a real-time snapshot of market preference. Currently, the increase in the value of the Toyota Prius exceeds all other vehicles, making clear the demand for this model in both the new and used vehicle market. Small vehicles such as the Toyota Corolla, Chevy Cobalt, Ford Focus, Honda Civic, and Nissan Versa exhibit strong gains in value.

The Ford Explorer—the previous version which is a traditional SUV—brings up the rear. The new smaller CUV Explorer is selling extremely well in its launch phase, Baum notes. Pricing on SUVs and pickups in the used market is down over the last several months.

The trends are clear: vehicle sales are strong, and consumers want hybrids, small cars and crossovers, and are shying away from pickups and SUVs even as business fleets continue to support these products in line with an overall economic recovery.

—Alan Baum

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