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New car shoppers value fuel over cool

CONSUMER CONFIDENTIAL

Oil prices were near record levels last week, our friends at OPEC were counting their cash and La Canada resident Alex Hartunian was shopping for a Prius.

“It’s definitely not a cool-looking car,” he decided as he examined a 2008 model selling for $27,848 at a Toyota dealership in Pasadena. “But people are talking about oil going to $100 a barrel. That’s just nuts.”

I was curious to see what effect skyrocketing oil and gasoline prices were having on car buyers. I also wanted to see what the view from the trenches was after General Motors Corp., the world’s largest automaker, reported a $39-billion quarterly loss.

Hartunian, who is 35 and single, wasn’t sure about the Prius’ styling. It’s not exactly a babe magnet. But Hartunian was pretty certain a Prius was the way to go, given its estimated 48 miles per gallon in city driving.

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And he was sure of this much: He didn’t want an American car.

“We don’t make good cars,” Hartunian said with a shrug.

There it is. True or not, that’s a belief shared by many U.S. drivers, and it’s hammering domestic carmakers.

Asian brands, led by Toyota, Nissan and Honda, now account for slightly more than 41% of the U.S. market, and that percentage is rising. GM, Ford and Chrysler account for just over 51% of the domestic market, and that percentage is falling.

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Eighteen-year-old Caroline Wilmoth drives a 2007 Toyota Scion tC, which sells for under $20,000 and gets about 23 miles per gallon in the city. She told me that when she went shopping for her first-ever new car she didn’t even consider a U.S. brand. “I heard that Toyota, Nissan and Honda were the best cars you could buy,” Wilmoth explained.

I’d like to say I found plenty of people at domestic dealerships who could refute that sentiment. But that would be a lie.

Maybe it was the time of day (morning). Maybe it was the day of the week (Thursday). I don’t know. All I know is that when I stopped by various American-vehicle showrooms in the Pasadena area, I couldn’t find a single customer on hand to chat with. Not one.

Nick Nielsen, the sales manager at a Buick and Pontiac dealership, made no secret of his displeasure as we chatted in his all-too-quiet workplace.

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“The car market is terrible, if you want to know the truth,” he said. “Across the board.”

At his dealership, Nielsen observed, sales were down about 40% from a year ago. And they were down last year as well.

It’s not that U.S. cars can’t hold their own against their Japanese rivals, Nielsen insisted. American cars are every bit as good as Toyotas and Nissans, he said. But there’s a perception in the marketplace that a Buick, say, is somehow inferior.

“It’s hard to get rid of that perception,” Nielsen said.

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His face hardened. “I personally won’t buy a non-American car,” Nielsen said. “I’m an American. You have to support your country.”

That’s a nifty bumper sticker, but it’s not exactly a selling point.

The U.S. car market is nothing if not competitive, and consumers will look elsewhere if a particular automaker doesn’t strike their fancy. You have to give people what they want.

That’s especially true as fuel prices flirt with record highs. The price of a barrel of crude topped $98 on Wednesday before easing a tad. Oil was trading around $96 a barrel on Friday.

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Many analysts say oil soon will hit $100 for the first time, which will ripple throughout the economy and, needless to say, right into the gas pump.

On Friday, the Automobile Club of Southern California reported that gas prices in the region were within 20 cents of their all-time highs after climbing about 2 cents a day last week in most areas.

A gallon of self-serve regular was averaging $3.297 in the Los Angeles-Long Beach area. That’s 13.7 cents higher than a week before, 31 cents above the month-earlier level and nearly $1 more than a year ago.

“Crude oil prices have been breaking records since September, and that increase has hit gas pump prices in a big way this week in Southern California and throughout the U.S.,” said Jeffrey Spring, an auto club spokesman.

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With that in mind, I stopped by a Hummer dealership to get a sense of how things looked from the perspective of one of the biggest, fattest, gas-guzzlingest vehicles on the road.

I had the lot to myself as I wandered among the shiny, tank-like behemoths. A black Hummer H2 was selling for $65,955. As if it were silly to even ask, the sticker said mileage info was “not applicable to this vehicle.”

In fact, most reviews place the GM-made H2’s fuel efficiency at around 10 miles per gallon in the city.

I approached a salesman and asked how business had been. When he learned I was from the newspaper, he clammed up and said he couldn’t answer any questions.

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Persistent fellow that I am, I continued asking about who buys Hummers these days.

The salesman called his boss over. He, too, declined to answer any questions and made it clear that my presence at the dealership wasn’t welcome.

So I went back to the Toyota showroom, where rock music was playing and a smattering of customers were browsing among the vehicles.

William Stackhouse, 85, was having some maintenance done on his 2007 Prius. I asked how he felt about buying American.

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“That’s a nice idea,” Stackhouse replied. “I just wish Detroit made cars as good as the Japanese cars.”

So does Detroit.

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Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

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