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Bleak Car Sales Data Still Produce Winners

MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel. Americans have very strong feelings about their cars and their coffee, and that's where we begin this hour.

NORRIS: If you're more inclined to skip that four-dollar, half-caff mochachino at Starbucks or you find yourself cursing at your eight-passenger, fully loaded SUV, you're not alone. Changing preferences for cars and coffee have become a fiscal weathervane in this faltering economy.

SIEGEL: Starbucks' decision this week to close 600 underperforming stores around the country has to do with the cafe's ubiquity. In a moment, we'll hear from a neighborhood that may be oversaturated in Starbucks stores. But first, evidence that America's love affair with SUVs may have run its course: automakers had their worst June in over a decade. Sales are down more than 18 percent from one year ago.

NORRIS: Consumers who are still buying are shunning gas guzzlers and squeezing into smaller cars. To find out what they're seeking, we called the CEO of Vehix.com. Derek Mattsson runs the Web site, designed to assist car buyers with research to buy or sell a vehicle. Welcome to the program.

Mr. DEREK MATTSSON (Vehix.com): Thank you.

NORRIS: So if people are buying smaller cars, what are they looking for?

Mr. MATTSSON: Well, there's a definite preference towards the Asian vehicles. Honda Civic has been the most popular vehicle the last couple months. Obviously the Toyota products have been strong. There's some preference, obviously, for hybrids, as part of the compact set. However, not all consumers are willing to pay the extra $5,000 for that type of vehicle.

NORRIS: Now, you mentioned the Asian automakers. Honda and Toyota have done very well, despite the steep drop in sales for some of the American automakers. Honda has two models that are very popular right now, the Fit and the Civic, but I understand that both those vehicles are in very short supply.

Mr. MATTSSON: Yes, they're down to less than a two-week supply, which is nothing in a dealership.

NORRIS: Now, what does that mean?

Mr. MATTSSON: They're just - that means that the demand has been so great, there's not a lot of inventory in place. So what you're seeing with Honda is they're actually trying to increase production to deliver enough vehicles to meet demand. You're seeing the opposite with the American manufacturers, where they've started cutting production on most SUVs, trucks, minivans, over the last three months, and that will continue.

NORRIS: A tough economy always produces winners and losers. Is there a vehicular equivalent of a 90-pound weakling suddenly king of the car lot because of this focus on fuel efficiency?

Mr. MATTSSON: Well, I would say hybrids would be there, but I'd say the biggest winner as of late would be the Honda Civic, and the Honda Accord to an extent. That's a slightly larger vehicle, but I'd say those are the big winners. We're also seeing the new - the Fits and the other smaller subcompact fuel-economy vehicles really start to take off.

NORRIS: Why does the Civic stand out?

Mr. MATTSSON: I think it's people looking for an affordable fuel - car that's based on good fuel economy.

NORRIS: It doesn't necessarily have the kind of sexy or sleek design that you see in some of the other cars.

Mr. MATTSSON: No, I think, again, I think it's price and fuel economy. That's - the need for cool or spacious cars, that's not a top priority right now with consumers.

NORRIS: So if you look at the traffic on your Web site, what looks to be the worst-selling vehicle, the vehicle that you perhaps couldn't give away if you tried?

Mr. MATTSSON: Well, surprisingly, about a year ago, 28 percent of all the people that came to our site would be in search of an SUV or a large sedan. That has changed dramatically. In the last six months we've seen that erode at least 50 percent, where maybe 15 percent of the people are looking for an SUV.

NORRIS: I guess the news, if you absolutely need a large truck or an SUV, this might be a good time to buy one.

Mr. MATTSSON: Well, if you - again, I think the people that must have large vehicles for industrial use or large families or people that use it for some work function, I think that will continue, and this would be a terrific time to buy.

The trend over the past 10 years was suburbanites buying SUVs that they drive around town for no real purpose other than they like driving a large vehicle; that will definitely disappear.

NORRIS: Mr. Mattsson, good to talk to you. Thanks so much.

Mr. MATTSSON: Thank you.

NORRIS: Derek Mattsson is the CEO of the Web site called Vehix.com. Transcript provided by NPR, Copyright NPR.

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