By Bill Kirk
Business Editor
July 06, 2008 02:00 am Don't be surprised if you start seeing fewer sport utility vehicles and pickup trucks on the roads in the coming months. It's because they're all sitting on car dealers' lots, looking for buyers. Local auto dealership owners say the sale of trucks and SUVs has plummeted as the price of gasoline hits $4 a gallon and above. "Demand is shrinking and shrinking," said Charlie Daher, president and CEO of Commonwealth Motors of Lawrence, which sells Chevrolet, Honda and Kia brands. "There's much less interest in those vehicles (pickups and SUVs), unless you absolutely need them." He said the era of Chevy pickup trucks being 50 percent of his sales are "long gone." Instead, he said, people are buying "anything that gets 25 miles per gallon and up." Big sellers on his lot are the high-mileage Kia and Honda models, he said, adding that "there just are not enough of them." Nationwide, the sale of gas-guzzlers has fallen off dramatically. On Tuesday, all of the major car dealers announced sales figures for June and the first two quarters of the year, and the news wasn't pretty. Ford announced that sales had dropped nearly 28 percent in June; Toyota was off about 21 percent. Chrysler took an even bigger hit, with sales down almost 36 percent last month. GM's car sales sank 21 percent in June, while its incentive-boosted truck sales were off 16 percent. Honda Motor Co., with its car-heavy lineup, was the only major auto maker to report a sales increase in June, a modest 1.1 percent. A 19.3 percent rise in car sales offset a 24 percent drop in trucks. Kia Motors America saw June sales go up 7.6 percent. U.S. auto sales had already fallen for seven straight months as of May, the longest period of consecutive monthly drops in eight years, according to the auto information Web site Edmunds.com. Commonwealth Motors isn't the only local dealership seeing a decrease in truck and SUV sales. "The number of people buying big vehicles has diminished," said Gary Jaffarian of the Jaffarian Auto Group in Haverhill. "Toyota has cut back on production of large trucks and SUVs based on the cost of gas." Nonetheless, he said business has picked up in recent months, and he even sold two Sequoias — a large SUV — in two days. But the real interest, Jaffarian said, is in small cars with mileage in the 40 to 50 mile per gallon range. "There's a buying frenzy," he said. "We are out of Yaris, and we're out of the Prius." Jaffarian said Toyota, which reported that truck sales were off 38 percent last month, has started converting some of its car-building capacity to smaller cars to keep up with demand in the United States for high-mileage vehicles. Henry Nassar of Nassar Ford in Lawrence said demand for the Ford Focus, Fusion and Edge is up, while sales of trucks are way off. He said high gas prices are affecting everyone. "As long as gas prices keep going up" the trend of smaller cars selling faster than larger vehicles will continue, Nassar said. He said pickups and SUVs used to be 50 percent of sales at the dealership. Now, they are 25 to 30 percent. And while Nassar noted that he's not laying off any employees, things are definitely slow. "We're all in the same boat — foreign and domestic — everyone is affected by high gas prices," he said. And it's not just new car sales that are suffering. Between March and April, average used car prices fell 4.5 percent for large SUVs, and 5.6 percent for large pickup trucks, according to J.D. Power & Associates. Conversely, they rose 7.3 percent for compact basic cars, such as the Honda Fit, Toyota Yaris or Nissan Versa. Material from Associated Press and Scripps Howard was used in this report.
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