Driving In The Down Economy

With fuel prices up one dollar since this time last year, and an elusive economic recovery, one would think that Americans would be eschewing SUVs in favor of cheaper, more fuel-efficient small cars, or switching over to hybrids. But surprisingly, strong SUV sales have been the driving force behind the recovery of the auto industry this year.

Overall vehicle sales have climbed 10 percent since September 2010, and in September of this year, SUV sales accounted for more than half of all vehicle sales.

Ford Motor Company recently announced that sales of the Ford Explorer are up 290 percent from last year making it the fastest growing midsize in the country. Ford's F-Series line was also up 14 percent over last year, and the Escape saw a 41 percent jump over last year's sales.

This trend is the same for other automakers as well. BMW's SUV sales rose 42 percent this year, and Chevrolet and Honda also saw a boost in sport utility sales.

Conversely, sales of alternative-fuel vehicles have been slumping. Hybrid sales are down 12 percent from last year, with even the segment-leading Prius seeing a 9 percent drop in sales in 2011. Only the BMW Hybrid 7 saw an increase in sales, but given its $72,000 base price, its likely buyers are not so likely to have been affected by the current economy.

One sign that some people may be making thriftier car choices is the success of the Chevrolet Cruze, which helped boost Chevy's numbers this year and became the biggest selling compact in 2011. But supply issues, more than buying habits, have been the biggest impediment to small car sales, which analysts were predicting would rise sharply this year. Both Honda and Toyota were unable to keep up with demand this year due to the destruction caused by the earthquakes and tsumani in Japan earlier this year.

Luxury car sales also climbed in 2011, with Mercedes-Benz, BMW, and Audi all reporting strong third-quarter sales numbers.

So it seems that for car buyers, it's going to take more than high fuel costs and a weak economy to make them change the way they drive.