As Gas Prices Fall, Demand Rises for Bigger Vehicles

Lower gas prices are helping fuel consumer demand for light trucks and SUVs, but there is a side effect: Bigger vehicles are not as fuel-efficient.

The average fuel economy of new vehicles sold in December was 25.1 mpg, down 0.2 mpg from November and down 0.7 mpg from the peak reached in August, according to the University of Michigan’s Transportation Research Institute.

U.S. car and truck sales topped 16.5 million in 2014, led by robust demand for trucks and SUVs. Sales of trucks, including SUVs, rose 10 percent to 8.6 million.

Cheaper gas and an improving economy were big factors in the increase in truck sales. Meanwhile, demand for hybrid and alternative-fuel vehicles shrank.

The sales trends are reflected in average-fuel-economy statistics. Researchers at the University of Michigan calculate the average fuel economy from monthly sales data and the window-sticker ratings.

The average fuel economy began dropping in September. To be sure, today’s cars, no matter what the size, guzzle less gas than cars produced a decade ago.

Vehicle fuel economy is up 5 mpg since October 2007, when the University of Michigan began monitoring the data.

And despite the reduction at the end of the year, the fuel economy of vehicles sold during 2014 averaged 25.4 mpg, compared with 24.8 mpg during 2013.

This article appeared in print in the January 7th, 2015 edition of Hamodia.