ALEXANDRIA, Va. – A new Fuels Institute report reveals three factors consumers consider when buying a vehicle—utility, affordability and efficiency—and dispels the myth that gas prices drive vehicle purchasing decisions.

Analyzing 15 years (2003–2017) of market data, “Driving Vehicle Sales–Utility, Affordability and Efficiency” identifies a market shift in cross utility vehicles (CUVs) that is expected to continue into the foreseeable future. The report also highlights important considerations relevant to the newly released proposed federal fuel economy standards.

“The notion that higher fuel prices lead consumers to purchase smaller, more fuel-efficient vehicles, while lower prices encourage the purchase of larger, less fuel-efficient vehicles is not supported by the data,” said John Eichberger, executive director of the Fuels Institute. “Consumers buy vehicles based on what they need and want and what they can afford. This combination has resulted in an overwhelming shift in the composition of the light-duty vehicle market to CUVs.”

The major shift in the light-duty vehicle market during a 15-year time period is noted in the report as the rise of the CUV, which grew its market share of all vehicles sold from 10% to 35% during a time period when other vehicle classes (except small cars) lost market share. Analysis found that consumers are increasingly purchasing CUVs because this vehicle class meets consumer desires for:

• Utility: CUVs deliver passenger capacity, cargo capacity and performance similar to that of a sport utility vehicle (SUV). CUVs also have a ride quality similar to that of a midsize car because they are based on a car platform.
• Affordability: CUVs offer price points competitive with midsize cars and lower than SUVs (sometimes lower by in excess of $10,000).
• Efficiency: Since 2012, all vehicle classes have delivered improved fuel efficiency, even SUVs and pickup classes. The most notable change, however, has been in the CUV class, with average fuel economy increasing from 22 mpg to 27 mpg, a 23% improvement. Today’s CUVs deliver efficiency that modestly trails only midsize and small cars.

“We expect that sales of Model Year 2019 vehicles and beyond will reflect the market shift toward CUVs, and this continuing market shift raises important issues for policymakers to consider when setting federal emissions standards,” said Eichberger.

In addition to satisfying consumer demand for utility, affordability and efficiency, automakers offered more than 90 different CUV models in 2017, an indicator that these vehicles yield production efficiencies, lower manufacturing costs, are offered at competitive price points and meet fuel ecomomy requirements.

The report’s analysis of vehicle purchasing trends reveals other important considerations for policymakers, including the misguided claim that Americans are addicted to “gas-guzzling” trucks. The data shows that pickup trucks lost market share over the years and SUV market share has also declined.

While meeting consumer needs for efficiency, alternative fuel vehicles (electric vehicles and hybrids) generally have failed to deliver on consumer concerns about purchasing costs. Alternative fuel vehicles are unlikely to capture significant market share until this vehicle class can compete on consumer demand for cost and utility. While the data shows that consumer interest in alternatives rises and falls with changes in fuel prices, this interest has not overcome cost and utility concerns to result in higher rates of purchase.

“Unbiased, fact-based research is necessary for aligning policy objectives with market realities,” explained Eichberger. “This report presents factual market data and provides an objective analysis of the relationship between fuel prices and consumer vehicle purchasing decisions, the major market shift to CUVs and consumer interest in alternative vehicles. These findings can help inform policymakers tasked with setting fuel economy standards and industry leaders who are considering long-term investments in their retail fueling operations.”

Download the full report, “Driving Vehicle Sales: Utility, Affordability and Efficiency” (PDF).