Record-high US gasoline prices have socked American motorists in the wallet, but it is still unclear whether it will put the brakes on sales of gas guzzling trucks and sport-utilities (SUVs).
Automakers insist it is business as usual, but softening sales of large SUVs and a new wave of truck incentives has intensified speculation that the effect of the record gasoline prices are being felt on the showroom floor.
General Motors Corp economist Paul Ballew gave the theory short shrift during a teleconference with analysts last week.
"We're monitoring it, tracking it, analysing it, looking at it whichever way we possibly can," he said, and "we just really struggle to see an impact," he said.
A liter of unleaded gasoline in the US averaged a record US$0.59 on Friday, up US$0.09 from a year ago, according to the American Automobile Association. In parts of California, where state emissions laws tend to inflate gas prices, it was closer to US$0.80 a liter.
And with the price of US crude hitting a 13-year high of US$40 dollars a barrel on Friday, analysts see no relief any time soon.
And while truck sales continue to outpace those of passenger cars, as they have done for the past two years, sales of large SUVs fell off a cliff last month. They were off 11 percent after strong first-quarter gains, according to Ward's Auto.
Last week, the Ford Motor Company and DaimlerChrysler's Chrysler unit boosted their cash-back and financing deals on light trucks, while General Motors Corp enhanced its incentives on midsized SUVs by another US$1,000. It also said it would offer cheap financing on its mammoth Hummer H2 for the first time.
GM brand manager Mike DiGiovanni insisted the promotion "had been built into the budget," a long time ago, in order to clear out this year's model year stocks ahead of the summer launch of next year's model-year H2s and it wasn't a response to the 20 percent decline in Hummer sales last month.
"At this point, there's just no evidence to suggest that gas prices are affecting sales," he said.
In a recent survey for insurance giant Progressive, however, 16 percent of people polled said they would consider buying a more fuel-efficient vehicle in the future.