Auto Firms Keep Close Eye on Gas Prices

DETROIT — America’s auto industry, beset by slow sales and ferocious foreign competition, is speculating that higher gasoline prices spawned by the Mideast turmoil could send more buyers toward smaller and cheaper cars.

The first subtle indication that such a trend might be brewing could come today, when the major auto makers report car and truck sales for Aug. 11-20.

Auto makers and dealers said Wednesday that it would be difficult to conclude that lower sales figures for the period are directly traceable to events in the Middle East. But this is the first full sales reporting period since the Iraqi invasion of Kuwait, which has fueled a penny-a-day rise in gasoline prices and pushed crude oil prices to $31 a barrel from about $19.

Auto makers and dealers don’t expect to see much change in today’s report just because of tensions in the Middle East. It’s the end of the 1990-model year, and dealers are involved in clearance sales, helped in part by incentives from the manufacturers.

“We’ve had two exceptional weekends, and it’s been right in the teeth of this (Mideast) thing,” said Ralph Jackson, general sales manager at Gratney Chevrolet in Jacksonville, Ark.

However, “if it does get worse, it could change people’s attitudes,” Jackson said.

The new car and truck sales pace this year has lagged last year’s. Through July 31, General Motors, Ford and Chrysler had sold about 6.1 million cars and trucks, down 6.7% from last year.

Gasoline prices have been rising. But they’re going to have to get a lot more expensive--somewhere around $1.50 a gallon for unleaded regular--before sales are affected, predicted Joseph Phillippi of Shearson Lehman Bros. in New York.

Chrysler spokesman Tom Houston agreed, saying gasoline prices aren’t having nearly as dramatic an effect on the industry as is uncertainty.

“Through this point in time, we haven’t seen anything,” GM spokesman Terry Sullivan said. He declined to speculate at what point sales would be affected by higher gasoline prices.

Joel Pitcoff, a Ford spokesman, said his company has seen no effect of Mideast events affecting vehicle sales, with one notable exception.

“The one exception that we are definitely aware of is in locations that are contiguous to military installations,” he said. “It has really been devastating to the dealers.”

Mike Bridgeman, new-car sales manager at Pearson Ford in San Diego, said traffic in his showroom has fallen off dramatically in the past few weeks. The dealership is within 10 miles of the main gate of the 32nd Street Naval Station.

“I would say its off at least 50%,” he said.

Officials also say it’s too early to tell whether rising gas prices may send consumers toward more fuel-efficient vehicles. Americans flocked to such models during the fuel crises of the 1970s, as they tired of waiting in long lines for a limited supply of gasoline.

Consumer tastes have tended more toward comfort than fuel efficiency in recent years, as prices declined and the economy improved. But at the same time, technology has improved the fuel efficiency in vehicles, so they get more miles to the gallon than 10 and 20 years ago.

The small Ford Pinto of the late 1970s, for example, got about the same mileage as some of today’s Lincoln luxury cars.