I was listening to the Forum on KQED (our local NPR affiliate) yesterday, and they started talking about gas prices and vehicle demand. One of the guests on the show discussed consumer behavior, and how it changed as gas prices changed. Specifically, she stated that compact and hybrid vehicle sales dropped with changes in gas prices – she was adamant about this. So I looked around for some data and found the following post somewhat useful.
In the article, they claim hybrid sales dropped 45.5% in April 2009 (year-on-year, compared to April 2008). Pretty shocking headline. They even show the percentage of hybrid sales of total vehicle sales, but it’s quite useless. So I took their hybrid data, and compiled it with two government sources, NIPA for auto sales, and EIA for gas prices. Looking at the raw data, I can see how the KQED guest could look at hybrid sales and be quite disappointed at consumer behavior:
However, it’s critical to measure the percentage of hybrids COMPARED to auto sales. That seems like common sense to me. Here’s the graph:
The second graph paints a significantly different story. Auto sales increased in early 2008 as gas prices began to increase, and then dropped as gas reached its peak. Not sure what explains the drop in hybrid sales – though it could be an anomaly, or it could be that non-consumer sales persisted through the peak and most of these are non-hybrid sales. Either way, it doesn’t seem like there’s a ton of correlation between the data. We often hear about how consumers react to market conditions with immediacy – yet in this case, it’s just not true.
PS – if you’d like the raw data, please email, happy to send it over.
Update: Thanks to a coworkers suggestion, I derived the correlation coefficient between the two graphs. For the entire period, the correlation between the percentage of hybrid sales compared to gas prices is .64, or moderately correlated. However, the hybrid market was not mature in 2004-5, so it’s a bit inaccurate. Comparing to 2006 onwards, the correlation coefficient is .25, i.e. there’s no correlation whatsoever.