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Gas prices drive sales of fuel-efficient cars?

March 1, 2012 12:00:00 AM PST
The recent spike in gas prices is having an effect on car sales. Customers are looking for fuel-efficiency.

The Auto Club reports the price for a gallon of regular went up another penny overnight in the Los Angeles-Long Beach area to $4.37. That's 18 cents more than a week ago and 58 cents more than on February 1.

Several major automakers reported a very healthy February. From Ford to Chrysler to Volkswagen, companies saw double-digit increases in domestic sales last month. That's due in part to an economy that's on the mend, and the fact that drivers are demanding more fuel-efficient cars.

"First thing they're looking for is good gas mileage," said Andrew Graff, vice president of sales at Galpin Ford in North Hills. "Especially now that domestic products are being competitive with all the other makes and models that are out there. So when they drive the cars, they love their performance, they love the handling, they love the design. And most importantly, they love the gas mileage."

Ford sales climbed 14 percent in February, mostly on demand for the Focus. Nationally, more than 23,000 were sold. And at Galpin, the Focus was also a hot model.

Chrysler saw a 40-percent increase in sales, selling nearly 134,000 cars nationwide last month.

And a welcome addition was Chrysler's tiny Fiat 500, which had its best sales month ever.

"I don't think business have ever been any better," said Jackson Ellis, the general sales manager of Glendale Dodge Chrysler Jeep.

Ellis's dealership is in the process of opening a new showroom for the trendy Fiats, which sell for about $20,000.

"They get almost 40 miles per gallon, so with gas at five bucks a gallon, it doesn't take premium fuel or anything like that, so it's definitely a car that's going to turn some heads," said Ellis.

With gas prices on the rise, industry experts say that small cars made up about 24 percent of the new cars sold last month, a trend that's expected to continue.

According to transportation studies, the average car on U.S. roads right now is about 11 years old. And now that credit markets are starting to free up, car-makers are hoping more people will be looking to replace their old vehicles this year.