Consumers move to smaller and cheaper cars, kind of

What does it mean for hybrids and EVs?

Fuel economy is a factor

Slowly but surely light trucks are losing their grip on the American car consumer. Thus far, 2010 auto sale’s figures peg cars, crossovers and minivans at 77.2 percent of the market, up from 68.9 percent three years ago.

Unfortunately, while interest in smaller vehicles is on the rise, interest in hybrid cars is on the decline.

Just as ironic, while people are downsizing and choosing traditionally ‘cheaper’ vehicles, transaction prices are increasing. Thanks to ever-increasing options, even smaller cars can be profitable. So, people are buying cheaper vehicles, but loading them up with expensive options.

Much of this downsizing is attributed to more rational buying, with a keen focus on better fuel efficiency. So then, why are hybrid sales declining?

Ultimately, it does seem that consumers are trying to offset the potential of higher gas prices, yet they are not focused purely on fuel economy, otherwise, it would seem that hybrid sales would be increasing.

Inevitably, hybrid and cost-effective do not fit in the same sentence for most consumers. Nevertheless, consumers do seem to primed for greater interest in fuel efficiency. If automakers can scale down hybrid prices, the upside could be huge.