Consumers more stoic about expensive gas: Ford
LAGUNA NIGUEL, Calif
LAGUNA NIGUEL, Calif (Reuters) - Rising gasoline prices are less likely to drive U.S. consumers to quickly embrace hybrid vehicles than was the case a few years ago, a Ford Motor Co (F.N) executive said on Wednesday.
"In the past, I would tell you that as fuel prices inched up over $3.50 (a gallon) you saw an increase in hybrid sales," said Nancy Gioia, director of global electrification for Ford. "Now, this time around, as fuel has inched up over $4, we are seeing modest, very modest tracking of sales at this point."
Gasoline prices rose nearly 9 cents over the last week to $3.68 a gallon, the highest pump price on record for April, the Energy Department said this week. The average price of regular gas is 86 cents higher than a year ago as conflict in Libya and rising tensions in the Middle East have sent the cost of crude oil to above $108 a barrel.
The higher prices have, however, led consumers to push up sales for smaller cars in March as Ford said last week that its inventory of small cars had been "pinched" by the heavy demand.
Last month, sales of compact and subcompact cars accounted for one-fourth of the U.S. industry's total, up from 21 percent the prior two months and 19 percent in December, Ford said.
Gioia, who spoke to Reuters on the sidelines of the Fortune Brainstorm Green conference. said the hybrid sector has not seen a similar jump though.
"What we think has happened is electrified vehicles will continue to track with fuel prices, but in North America in particular there is a far greater lag than there has been in the past," she said.
"People are already saying, 'Hey, I've survived over $4, I've survived $4.25, it went back down, this too will pass,'" Gioia added. "What I would call a more reactive response has been filtered a bit and I think it's going to take a little bit longer. But we still believe people will respond on fuel prices."
Gioia said the last time prices spiked in 2008, consumers' buying habits changed, and it will take a longer period at higher prices to have the same thing occur now.
"If it remains over $4 a gallon for 12 to 18 months, I think we'll start to see people taking longer-term decisions," she said.
(Reporting by Nichola Groom in Los Angeles, writing by Ben Klayman in Detroit, editing by Matthew Lewis)