Cheap oil is hammering sales of small, fuel-efficient cars, while gas guzzlers have become hugely popular at a time when OPEC (the Organization of Petroleum Exporting Countries) and Russia have vowed to keep pumping oil in massive volumes – even as the price of a barrel of Brent hit an 11-year low this week.
According to DesRosiers Automotive Consultants, sales of trucks are up 9.0 per cent this year, while passenger car sales are down 5.7 per cent. Sales of the smallest subcompact cars are down 20.1 per cent. Meantime, large pickups and large vans are up 3.1 and 16.5 per cent, respectively.
Ram pickups? Up 5.9 per cent. General Motors’ pickup twins, the GMC Sierra and Chevrolet Sierra, are up 12.1 and 10.9 per cent, respectively.
FCA Canada’s marketing vice-president Ed Broadbear says sales of the smallest, thriftiest cars have tanked at a time when buyers are feeling no pain at the pump. Fiat’s entire line is down 30.8 per cent. The Smart ForTwo is down 71 per cent. Nissan Versa, down 31.7 per cent. Ford Fiesta, down 40.7 per cent. Kia Rio, down 33 per cent.
And on and on. The top eight best-selling cars in Canada this year, all compacts or subcompacts, are down, down, down. Every single one, from the Honda Civic (down 1.7 per cent) to the Hyundai Elantra (-4.4 per cent), Toyota Corolla (-3.3 per cent), Mazda3 (-15.7 per cent), Chevrolet Cruze (-4.9 per cent), Volkswagen Jetta (-10.3 per cent), Ford Focus (-4.3 per cent), and Hyundai Accent (-14.3 per cent).
“There are a few dimly lit bright spots,” says Broadbear. Notable is the Toyota Prius hybrid, up 12.8 per cent, though Broadbear says the growth is in fleet sales, not retail. Prius retail is down 11.4 per cent, he says.
“There is no question that low fuel prices impact small vehicle sales,” says Broadbear. “Happily, we’ve sold over 2,500 Renegade and Fiat 500X vehicles so far this year, so our new crossover and SUV (sport-utility vehicles) entries are bringing us volume we would not have otherwise had – and doing it despite low fuel prices.
Broadbear argues that the only defence car companies have against wild swings in fuel prices is to have a broad lineup – cars, crossovers, SUVs, minivans, pickups, vans and other trucks.
Going into 2016, the world’s smartest minds expect oil prices to stay low in the wake of a global oil glut. And so buyers will keep gorging themselves on gas guzzlers right through 2016 – at least until they see a jump at the pump.