PHOTO ILLUSTRATION BY GABE WOLF The big four automobile dealers face challenges with rising gas prices, a slowing economy and consumers seeking more eco-friendly vehicles. With gasoline hovering around $4 per gallon, automobile dealers face the daunting task of keeping up their sales.

In Lampasas, that doesn't seem to be as big a problem as it is in other cities, thanks, in part, to the strong Central Texas economy.

Kirk Whitehead, general manager of Jim Hoffpauir Inc., which includes a Chevrolet and Ford dealership, said sales at the two locations have leveled off from last year, but he is now seeing an increase in sales.

"We are selling different items, but we are still selling," he said.

More fuel-efficient vehicles and used cars are selling well, and the business is having trouble keeping up with demand.

"The increase in gas prices has affected what we sell but not necessarily our numbers," said Whitehead. "We are selling more Chevrolet passenger cars, like Cobalt, Aveo and Malibu. And we are selling them as fast as we can get them.

"The Aveo, a mid-size car, can get up to 32 miles per gallon, as can a lot of the passenger cars, and that's what folks seem to be after."

The dealership manager said the production capacity of small cars is down because in past years manufacturers sold more full-size cars and SUVs. The price of gasoline rose so fast that when the need became apparent for smaller vehicles, manufacturers didn't have them, Whitehead said. "If they can get the production up, we can sell them," he said.

"People are still buying trucks," he added, "but they are buying smaller trucks. The 1/2- ton trucks are selling more than the 3/4-ton trucks right now."

Whitehead said many consumers are not trading in or selling Suburbans or Tahoes because of the high cost of gas, but they are purchasing "commuter vehicles."

"We are seeing a shift to smaller vehicles for those who travel a lot for their jobs. They buy a smaller vehicle to commute in but still use their bigger vehicle for family trips and events."

With the cost of diesel almost $1 a gallon more than gasoline, folks who previously used diesel vehicles for leisure are opting for gasoline vehicles. "But those who have to have the diesel trucks for work continue to buy them."

Because his business relies so heavily on oil prices, Whitehead keeps up with oil prices and the stock market. The trend in the last two weeks, the dealership manager said, is a declining price per barrel of oil.

"Demand is down, and there is no problem with supply, and Hurricane Dolly didn't disrupt oil production in the Gulf," he said. "Oil is also over-valued. All that combined should help prices continue to drop.

"There are so many factors involved, and any little glitch could affect the cost of oil per barrel. There is instability there, but the trend is a decrease in the cost of a barrel of oil."

Whitehead said the price of crude oil has dropped from $144 to $122 in just two weeks, and he sees that trend continuing.

"I think that by the beginning of the next year we should see gas at about $3 per gallon. And that will not only be good for the car business, it will be good for everyone. We are fortunate here because the Central Texas economy is so strong.

"We haven't seen the job losses and mortgage problems other areas are facing. That's a testament to how strong our economy is. I think it will continue to get better."

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Benny Boyd Jr., owner of Benny Boyd Chrysler-Dodge-Jeep, said his dealership has seen a slight decrease in sales since gas prices took a sharp rise weeks ago.

"When the gas prices increased dramatically, it really put a damper on sales of big trucks and SUVs, but I think that is because people weren't sure how high gas would climb."

In recent weeks, with a small decrease in the cost of gasoline, Boyd sees things looking up.

"Once it gets a little more stable and we get a better feel of where gas prices are going to be, we will see our truck and SUV sales increase from where they are today," he said. "Not everyone wants to drive a small car."

Boyd said the cost of purchas- ing a small vehicle is up 20 percent, while truck costs have dropped by 10 percent. "There has never been a better time to buy a new or used truck or an SUV. They will not get any cheaper than they are today."

Factoring in a 20 percent increase for a smaller car, Boyd said it is still cheaper to buy a truck, even with the extra cost for gas.

The dealership owner said he sees things looking up pretty quickly. "I think it has hit bottom in the last 30 days, and with the cost of gas dropping and stabilizing, people will be buying large vehicles again."

Boyd said some of the gaseconomy vehicles include Dodge Journey, Dodge Caliber and Jeep Patriot. "They are getting anywhere from 25 miles per gallon and up. Minivans also are still selling well, even though truck sales are down about 20 percent."

He agreed with Whitehead of Jim Hoffpauir Inc. that people are purchasing "commuter" cars to take to work. "But they still like having those larger vehicles, and with manufacturer incentives today, trucks are cheaper now than years ago."

Boyd said while the dealership is not making any major cuts, it is looking for ways to save money.

What helps in tough economic times is that customers are purchasing parts and having vehicles serviced. "That helps offset some of the loss," he said.

The automobile dealer said his main focus now is on used cars. "Typically, if new car sales are off, used car sales are up. Though this is not a typical market today, we expect to see it soon.

"While people know that if gas stays between $3.50 and $4 that though nobody likes it, but we can live with that. It's the unknown that scares people. Fortunately, what we are seeing today is that oil is going down. It's just too high."

Boyd said high diesel prices are to blame for some of the inflation. It drives up the cost of goods because most are transported by truck. "In every other country in the world, diesel is the preferred fuel. It is cheaper to make than gas. But in the U.S., increased emissions requirements for diesel are driving up the prices, making them higher than gas."

In Mexico, he said, diesel is $2 per gallon, while in Saudi Arabia, it can be had for about $.50 per gallon. "That's because they don't have the emissions requirements we have here. The government needs to lower the requirements."

Boyd said diesel trucks are a necessity for many. "Recreational buyers have diminished, but there are still people out there who need them," he said, and although the fuel is not a bargain, the trucks are.

"In April, I couldn't get enough used diesel trucks, but today the market is fluctuating and the demand is weakened."

Boyd said there has been a lot of over-reaction in the market. "But I can see the fear, and it is justifiable because the prices climbed so quickly.

"The good news is that we are starting to see it go the other way."