Higher gas prices will boost small car sales

[rickaren]

Firm: Higher gas prices will boost small car sales

Posted on Wednesday, December 9th, 2009 at 3:32 PM EST.(Employee News)

Without significantly higher gas prices, it is unlikely that consumers will be eager to buy smaller, more fuel-efficient cars in the United States, according to automotive forecasting firm CSM Worldwide, the Detroit Free Press reported.

Sales of subcompact vehicles will likely increase to 11 percent to 15 percent of total vehicle sales in the United States by 2015, Charles Chesbrough, senior economist for CSM Worldwide told the paper. But that’s not enough to meet future corporate average fuel economy standards required by the U.S. government, Chesbrough said. To meet the 2015 standards, Chesbrough estimates that about 40 percent of total vehicle sales would need to come from subcompact cars, the Free Press said.

In addition, Chesbrough predicts gas prices will likely remain between $3 per gallon to $4 per gallon over the next 20 years in the United States, the paper said. At those prices, it still takes several years for consumers to save enough money from the additional gas mileage to recoup the additional cost of an electric or hybrid electric car, the story said. (Detroit Free Press)