CARY, N.C. -

Consumers' heightened interest in compact SUVs and midsize utility vehicles over sedans is driven by cargo and a high vantage point, rather than the recent drop in gas prices nationally, says Michelle Krebs, executive analyst for Autotrader.

“KBB did a quick poll, not scientific necessarily,” she said during a conference call with the media on Monday. “I keep seeing articles about gas prices driving that trend; not so much, according to this quick poll.”

Shoppers said they were most attracted to cargo area and the high vantage point of SUVs, Krebs said.

Krebs joined Alec Gutierrez, senior analyst for KBB, to provide insight on April’s auto sales results and recent market trends.

“I’ve seen some stories about it being a weak month I think we need to take a breath and put this in perspective. We’re still around that 17 million mark — that’s a very high level,” Krebs explained.

“Since 1980 we’ve only had four years that we’ve been over the 17 million mark. If you look over time, over the last almost 40 years the average is 14.7 million vehicle sales a year, so we’re tracking well ahead of that.”

She pointed out that car sales are down a bit down from forecast, but it’s to be expected at this stage of the cycle.

“This sales cycle has plateaued so we expected some of these dips, incentives remain plentiful and sport utilities dominate over cars,” she said.

In the next couple of years, Gutierrez said he wouldn’t be surprised to see sales stabilize back down to the low-to-mid-16 million unit range.

He explained that the quality of vehicles on the road today is strong. That includes cars built in the last five years and even in the last 10 years that are capable of lasting longer, which impacts consumer demand.

“I think there’s a very real possibility that if manufacturers pull back a bit on production to bring incentives in line, to bring inventory levels in line, we can very easily see the market back into a 16 (million), 16-and-a-half (million) unit range year-in, year-out,” Gutierrez said.  

He also said that he expects manufacturers’ profit margins to remain high.

“We are at a point where margins should be stabilizing pretty soon. In terms of overall mix, I don’t know that you’re going to see full-size trucks or small SUVs really stretch too far beyond where they’re at today,” he said. “In fact, if you look at the numbers from a growth perspective, over the last couple of years, we saw compact-SUV sales up in the double-digit range. We had years where sales were up 10 percent, 15 percent, 20 percent.”

So far this year, small SUV sales are only up about 5 percent and trucks are up similarly — about 5.5 percent, according to Gutierrez.

“Midsized cars are still declining rather rapidly; they’ve got about a 20-percent drop year-over-year,” he said. “I think you’ll start to see those margins stabilize as the growth in trucks and SUVs hit the peak and the decline in midsize and small cars hit the bottom.”

Gutierrez said that he predicts some degree of stabilization this year in terms of segment mix and market share.

“One thing I would add about profit margins is that it was something not paid much attention pre-recession and yet the car companies, especially here in Detroit, are laser-focused on profit margins, even more than volume these days,” Krebs added.

She said manufacturers have since shifted focus more on profit margins rather than all-out vehicle sales volume.