Petrol topped 1.30 euro per litre ($6 per gallon) in Germany this week, but pump prices have not dampened Europeans’ growing enthusiasm for sport utility vehicles (SUVs), nor have they increased sales of fuel-sipping diesel engines, noted Neil Hall, market analyst at car industry tracking firm JATO Dynamics.

“I can see a lot of trends occurring but it is all due to product launches rather than anything else,” he said, playing down the impact of fuel prices on consumer buying patterns.

SUVs were the fastest-growing segment of the western European market in the first half, with sales up 11 percent to 49,817 units while sales of minicars fell 7 percent, JATO says.

Hall attributed this to demand for new SUV models such as the revamped Discovery made by Land Rover, a unit of Ford.

“The new Hyundai Tucson and Kia Sportage are bringing new customers into the segment by selling a car-like product at a car-like price so you get a product that is tall like an SUV without any of the compromises,” he added. New SUV customers buying models such as the Range Rover Sport, Nissan Pathfinder and Nissan Murano often prefer to outfit them with less-powerful two-litre engines, but this does not mark a general shift towards smaller motors, he added.

SMALL IS BEAUTIFUL

Small cars still account for nearly 30 percent of the market given Europe’s higher fuel prices, heavy taxes and cramped city roads. Dresdner Kleinwort Wasserstein analyst Arndt Ellinghorst argued that oil prices were not crucial to customers given the huge shift to diesel that has taken place in the past decade and the relative fuel efficiency of western Europe’s auto fleet.

Pump prices are still not painful enough to change consumer attitudes in a big way, he said. European carmakers have been raising the average mileage of their fleets for years while the average mileage of U.S. vehicles has stagnated or even declined of late due to America’s love of heavy and powerful cars, trucks and SUVs.

Keen to head off possible carbon taxes, Europe’s auto industry volunteered in 1999 to cut emissions of carbon dioxide, the greenhouse gas linked to global warming, to head off compulsory steps.

Carmakers introduced more fuel-efficient engines and fostered demand for diesel motors, which consume around 30 percent less fuel than petrol engines.

But the pace of improvements has slowed recently as European consumers began buying more powerful cars and regulations require more safety equipment that adds weight to vehicles. While sales of “A” segment small cars, such as the Fiat Panda, are growing and the next-larger “B” segment led by the Peugeot 206 is shrinking, JATO’s Hall said it was hard to tell if this reflected a conscious choice or simply new models. Neither segment has seen big shifts towards diesel engines, which peaked in popularity in Europe in February and has since been coming down, Hall said.

Helmut Bluemer, spokesman for the German car dealers organisation, said a debate about the health impact of soot from unfiltered engines had crimped demand for diesels.

He also suggested high fuel prices were boosting demand for less-powerful engines, as shown by Germany’s used car market.

— Reuters