Favoring fuel economy

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Since December [2010], we have seen industry-wide small car purchases increase from 19% to 24%. It drives home the point that consumers are looking at more fuel-efficient choices.” –George Pipas, sales analyst, Ford Motor Co.

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You know, discussing a survey that discerns a growing long term focus among U.S. consumers on fuel economy is kinda like saying research confirms people enjoy saving money – leading to a ubiquitous “um, duh!” reaction for many.

Yet for fleets that rely on light and medium-duty trucks, such a shift is of critical importance. For if more and more everyday consumers make fuel economy a “must have” item on their vehicle specification list – even among buyers of sports cars – then OEMs are going to increase investments along that technological line.

Fleets feel the “ripple effect” of such decisions because OEMs like Ford Motor Co. and others are increasing moving to global vehicle platforms, meaning the cars and trucks sold in every corner of the world – along with the engines that power them – share similarly components. And if more of those components are focused on delivering better fuel economy for consumers, fleets are going to get it too.

Let’s take a look at some of the findings from the annual New Vehicle Customer Study conducted since the 1970s by Maritz Research – a study that surveys some 200,000 consumers a year:

• 42% of the people surveyed by Maritz say fuel economy is “extremely important” in their decision to purchase new 2011 models – a 13.5% increase versus 10 years ago

• 37% indicated they expect fuel economy will have the “greatest impact” on their next new vehicle purchase

• In terms of generations, “Millennials” place an even greater importance on fuel economy, with 46% saying fuel economy is “extremely important” in the new vehicle purchase decision – the greatest percentage among all age groups. Also, 41% say fuel economy will be the top factor in their next vehicle purchase

In addition, the importance of fuel economy significantly increased in nearly all vehicle segments since 2001, Maritz found. Specifically:

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• Fuel economy as a purchase reason for B-cars became the top consideration in 2011 (21%), up from fourth in 2001 (14%);

• Fuel economy as a purchase reason for C-cars nearly tripled in importance from 2001 (7%) to 2011 (19%), going from fifth to first;

• After ranking 16th in 2001, fuel economy was listed in the top five most important purchase reasons for small utility vehicles in 2011;

• Fuel economy was listed in the top 10 most important purchase reasons for sports car buyers for the first time in 2011;

• Fuel economy as a top purchase reason for medium utility vehicles jumped 14 spots from 2001 to 2011;

• Fuel economy as a top purchase reason for C/D-cars ranked fifth in 2011 after ranking 12th in 2001.

OK, again, considering the rapid fuel price hikes we suffered through in 2008 and again earlier this year, none of this data comes as much of a surprise, to say the very least. But what it does indicate is a fundamental shift is occurring in buying habits – a shift that, in turn, will potentially help spur even more improvements in fuel economy without necessarily affecting vehicle performance.

Take Ford’s F-150 pickup, for example. The company noted recently that V6 engines continue to outsell V8s among its F-150 models, with the new 3.5-liter EcoBoost and 3.7-liter V6 engines representing 57% of F-150 retail sales this September.

[Here’s an overview of how Ford’s new EcoBoost engine delivers better fuel economy without affecting fuel economy.]

Indeed, light truck sales are strong this year, with Chrysler’s Ram Trucks division and General Motors both enjoying strong numbers as well with products that are also now tuned to deliver better fuel economy.

[For example, Mike Cairns, Ram Truck's lead engineer, explained how a transmission upgrade improved fuel economy for the company’s truck models.]

Now, of course, there’s a regulatory component to all of this as well, for the federal government laid out some pretty hefty new fuel economy targets automakers must meet a little over 10 years from now – not to mention a separate set of rules for heavy trucks.

While some are concerned that forcing the hand of vehicle OEMs in this fashion will result in significant higher sticker prices for consumers and fleets alike, others say the fuel savings will – in the long run – more than adequately cover any additional upfront cost. That remains to be seen, of course.

Still, the consumer shift in favor of fuel economy is the key thing. If that continues to expand, then selling more fuel efficient products becomes easier, and the easier it becomes, the more research and development attention this vehicle characteristic will get.

What's Trucks at Work?

Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry.

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