News, Insights and Best Practices for Manufacturing in Mexico

Falling fuel prices spur domestic light truck sales

09 Oct 2014

Category: Automotive Manufacturing

Fuel prices continue to drop nationwide, and with the U.S. economy on the rebound, consumers are beginning to invest their dollars in larger cars. This September's average mileage rating was 25.3, a significant 0.5 decrease that hasn't been seen since December 2011. Though this still reflects an overall 5.2 mpg improvement since October 2007, many car buyers are shying away from energy-efficient cars. As the auto industry responds to this trend, manufacturers in Mexico will likely see the repercussions of this trend.

Low gas prices will continue to drop
Today's low gas prices are due to a recent North American petroleum boom that has lowered the average price of a gallon of regular, unleaded gas to $3.28 and made competitive manufacturing in Mexico much more cost-efficient. What's more? This decrease in fuel costs isn't expected to give anytime soon - according to Edmunds, gas prices could fall yet another 20 cents in the next month or two.

Gas priced at just over $3 a gallon hasn't existed in the U.S. since 2010, and at least one station in 26 states is selling the stuff for just under $3.

Increased pickup, SUV and van sales
Reduced fuel costs mean reduced demand for fuel-efficient vehicles. Pickups, SUVs and vans - also classified as light trucks - accounted for 53.4 percent of all new vehicle sales this September and saw a whopping 16.6 percent increase in sales since this time last year. Automakers like Chevrolet, Toyota, Jeep and Nissan have helped drive the rampant truck consumption, resulting in the best quarter for the automotive industry since 2006.

Year over year, vehicle sales are expected to increase 9.1 percent, pointing to steady growth in the automotive manufacturing sector.


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