As gas prices recede, so do fuel efficiency concerns

[FUTURE_OF_GM]

http://www.edmunds.com/insideline/do/News/articleId=130591

"in July, consumers' consideration of presumably out-of-favor segments including large crossovers, minivans and sports cars began a significant recovery, while consideration of small cars and hybrids actually began declining from levels in June."

Edited August 22, 2008 by FUTURE_OF_GM

[BuddyP]

Gotta love the mindset of the general public

[Robert Hall]

Gotta love the mindset of the general public

Live for today..

[loki]

eh.. price drops and just "getting used to it"...?

[Robert Hall]

eh.. price drops and just "getting used to it"...?

Well, the last few summers have seen a price spike then a drop... but each time, it's dropped to a level higher than where the previous drop stopped...definitely more pronounced this year.

[Cremazie]

BURN YOUR HYBRIDS, LIBERATE YOUR SUV!

[Windy-57]

Well, as has been stated many times, hybrids still have a tough time making their economics worth while (how long do you have to drive a Prius before you've recouped the hybridization cost?) So people weren't running toward fuel efficiency because gas was $4/gallon, but rather because, in their minds, there was a real potential for $5, $6, $7....$10/gallon gas. So, when gas prices fell a bit, it's an initial sign that the price of gas is starting to level off and, in turn, that lessens fears about continued price increases. Which is why, in the consumer's mind, it's OK to start considering SUVs, sports cars and the like again.

So, my point is that this isn't necessarily a short-sighted reaction, but rather this reaction likely has a lot of lont-term thinking behind it.

[Lamar]

Also, many of the vehicles that became passé this summer can be had for a song now...

[Robert Hall]

Well, as has been stated many times, hybrids still have a tough time making their economics worth while (how long do you have to drive a Prius before you've recouped the hybridization cost?) So people weren't running toward fuel efficiency because gas was $4/gallon, but rather because, in their minds, there was a real potential for $5, $6, $7....$10/gallon gas. So, when gas prices fell a bit, it's an initial sign that the price of gas is starting to level off and, in turn, that lessens fears about continued price increases. Which is why, in the consumer's mind, it's OK to start considering SUVs, sports cars and the like again.

So, my point is that this isn't necessarily a short-sighted reaction, but rather this reaction likely has a lot of lont-term thinking behind it.

The thing is, we really don't know if the price is going to stabilize at $3.75 or wherever... given worldwide demand that is growing, instability in oil source regions, there is no reason to think it won't go up again in the US, to $5 or more within the next few years..so it would be pretty short-sighted to go buy a Hummer now..

[FUTURE_OF_GM]

Well, as has been stated many times, hybrids still have a tough time making their economics worth while (how long do you have to drive a Prius before you've recouped the hybridization cost?) So people weren't running toward fuel efficiency because gas was $4/gallon, but rather because, in their minds, there was a real potential for $5, $6, $7....$10/gallon gas. So, when gas prices fell a bit, it's an initial sign that the price of gas is starting to level off and, in turn, that lessens fears about continued price increases. Which is why, in the consumer's mind, it's OK to start considering SUVs, sports cars and the like again.

So, my point is that this isn't necessarily a short-sighted reaction, but rather this reaction likely has a lot of lont-term thinking behind it.

I agree...

It's all about psychology.

I read something a while back that said as long as gas prices gradually increase, people will adjust and continue buying what they want. It's the spikes that kill us and scare everyone into a panic.

I'll admit, this summer was pretty scary to me. I don't like waking up to a 10 cent increase in price overnight. But then again, it pisses me off because speculation is what's driving the price, not supply. So some fat cat on "The Street" is getting a bit more rich off of my back, basically.

We should regulate the price of oil (on the market) and gradually raise prices to where they naturally should be. That way, the economy doesn't crash. I think Russia or Germany did that very thing, or something similar, this summer.

Edited August 22, 2008 by FUTURE_OF_GM

[FUTURE_OF_GM]

The thing is, we really don't know if the price is going to stabilize at $3.75 or wherever... given worldwide demand that is growing, instability in oil source regions, there is no reason to think it won't go up again in the US, to $5 or more within the next few years..so it would be pretty short-sighted to go buy a Hummer now..

But there are so many variables...

americans are already driving smaller and less. New technologies such as hybrids and plug ins and alternative fuels will ease demand (albeit not much, but still) China just added a displacement tax to curb purchases (which I think is but whatever) The dollar will get stronger, we'll start drilling off shore, hopefully the next president will CHANGE the way the oil industry swims in profit.

I know all of that is speculative, but it's no different than some analyst flying off at the mouth and predicting doom.

Edited August 22, 2008 by FUTURE_OF_GM

[Robert Hall]

But there are so many variables...

americans are already driving smaller and less. New technologies such as hybrids and plug ins will ease demand (albeit not much, but still) China just added a displacement tax to curb purchases (which I think is but whatever) The dollar will get stronger, we'll start drilling off shore, hopefully the next president will CHANGE the way the oil industry swims in profit.

I know all of that is speculative, but it's no different than some analyst flying off at the mouth and predicting doom.

Offshore drilling won't do any good, though... that's something that will take 5-10 years to see any ROI..

[FUTURE_OF_GM]

Offshore drilling won't do any good, though... that's something that will take 5-10 years to see any ROI..

I know, but if demand keeps climbing like some predict it'll eventually have an effect.

On a related note; what about oil shale? is it still cost prohibitive? And what about horizontal drilling in the Dakotas? Seems I heard that it could be justifies now that the price is over $100/barrel

[Robert Hall]

I know, but if demand keeps climbing like some predict it'll eventually have an effect.

On a related note; what about oil shale? is it still cost prohibitive? And what about horizontal drilling in the Dakotas? Seems I heard that it could be justifies now that the price is over $100/barrel

Could be..I had heard oil shale was cost prohibitive at previous $/barrel levels...ultimately, though, I think we have to find a way to move away from oil dependence...hybrids, electric cars, fuel cells, nuclear, plutonium, water, air, dirt, something...

Edited August 22, 2008 by moltar

[FUTURE_OF_GM]

Could be..I had heard oil shale was cost prohibitive at previous $/barrel levels...ultimately, though, I think we have to find a way to move away from oil dependence...hybrids, electric cars, fuel cells, something...

I agree and disagree.

I always want to drive an ICE car. But I'd love for the market to move to many other types of propulsion. Less ICE cars equals cheaper fuel and less pollution. Not to mention, I'd LOVE to see GM hit one out of the park with the Volt to regain respect and share.

[Intrepidation]

The less is to have the entire lineup from small cars to big trucks be very good products, and be able to adjust production based on demand / be flexible. Then it wouldn't be as much of a problem when gas prices go up and down and demand fluctuates.

[CSpec]

GM might regret thinking that the market "shifted fundamentally" after data from March through June.

[Intrepidation]

Maybe the Ram's debut isn't so badly timed after all.

[loki]

we'll start drilling off shore, hopefully the next president will CHANGE the way the oil industry swims in profit.

careful, you sound like socialism/regulation is a good thing. regulation comes from too much immoral/unlawful actions. displacement taxes are a way of saying ICE's are immoral/unlawful, which you are against.

so what do you really want? freedom of choice or propped up industries with regulations/subsidies?

edit: freedom of choice, as in fair and open competition

Edited August 22, 2008 by loki

[CARBIZ]

We're still getting hosed, however. Oil peaked at $143 a barrel a month ago. We were paying $1.36 a litre. Now, oil is around $114, which is a 25% drop by my accounts, yet we are paying $1.29 a litre - only a 5% drop.

[FUTURE_OF_GM]

careful, you sound like socialism/regulation is a good thing. regulation comes from too much immoral/unlawful actions. displacement taxes are a way of saying ICE's are immoral/unlawful, which you are against.

so what do you really want? freedom of choice or propped up industries with regulations/subsidies?

edit: freedom of choice, as in fair and open competition

The oil market was deregulated so that anyone around the world can buy oil futures. I want that deregulation reversed.

I'm tired of reading "Hurricane criples refinery" and paying more for gas, then reading "Oil is at a 15 year surplus" only to have to pay EVEN more for gas.

To me, it's the same thing that is crippling this country (through mortgages) It's a way for the upper 10% to make more money on the lower (less educated) 90%.

We're still getting hosed, however. Oil peaked at $143 a barrel a month ago. We were paying $1.36 a litre. Now, oil is around $114, which is a 25% drop by my accounts, yet we are paying $1.29 a litre - only a 5% drop.

Edited August 22, 2008 by FUTURE_OF_GM

[regfootball]

the choice i had the other day from the dealer....pay 18 grand for the new focus with MANUAL tranny or for 3 thou more the fuel sucking Edge with the automatic.

you still gotta pick the Edge and hedge your bets on gas not going too much higher.

[regfootball]

The oil market was deregulated so that anyone around the world can buy oil futures. I want that deregulation reversed.

I'm tired of reading "Hurricane criples refinery" and paying more for gas, then reading "Oil is at a 15 year surplus" only to have to pay EVEN more for gas.

To me, it's the same thing that is crippling this country (through mortgages) It's a way for the upper 10% to make more money on the lower (less educated) 90%.

the mortgage home value issue needs fixing first. the reason there was a bubble was because people's wages went in the tank in terms of real income. blame BUSH, war, outsourcing and greedy execs. and energy prices. had the businesses not looked to outsource america and strip their pay to slave wages, people still could have foot the bill on their homes. if they still could pay, home values would not drop, and thus credit flow and all of that would remain as would new housing development.

nothing gets fixed until the value of folks' properties gets back to what it was an the banks stop tightening up like a turtle hiding its head.

it's in everyone's interest in this country for housing values to always remain stable and rising slightly.

Edited August 22, 2008 by regfootball

[CARBIZ]

The oil market was deregulated so that anyone around the world can buy oil futures. I want that deregulation reversed.

I'm tired of reading "Hurricane criples refinery" and paying more for gas, then reading "Oil is at a 15 year surplus" only to have to pay EVEN more for gas.

To me, it's the same thing that is crippling this country (through mortgages) It's a way for the upper 10% to make more money on the lower (less educated) 90%.

I'm all for free markets, but something is amiss with the oil business. If someone farts in Sudan, gas prices at the pumps shoot up the next day. If the the King of Saudi Arabia declared he loves Israelis tomorrow, it would still take a month for prices to come down.

If you don't like what Blockbuster charges, you can go to the mom & pop store and pay less or get loyalty bucks or something. Isn't it odd that all the gas stations in town charge EXACTLY the same amount, within a half penny of each other?

[frogger]

We're still getting hosed, however. Oil peaked at $143 a barrel a month ago. We were paying $1.36 a litre. Now, oil is around $114, which is a 25% drop by my accounts, yet we are paying $1.29 a litre - only a 5% drop.

But our dollar also dropped about 5%.

[haypops]

If you're frustrated over the high cost of gasoline at the pump, don't trade in your Hummer for a Vespa just yet: A leading energy analyst is telling clients these days to prepare for crude oil to retreat back below $65 per barrel over the next three years.

How could it happen? He says conservation, new drilling, efficient new vehicles, alternative energy sources, a rising dollar and a global recession will combine to blast prices back to the Stone Age -- or at least to last year's levels

click here for the rest plus opposing views

[loki]

The oil market was deregulated so that anyone around the world can buy oil futures. I want that deregulation reversed.

I'm tired of reading "Hurricane criples refinery" and paying more for gas, then reading "Oil is at a 15 year surplus" only to have to pay EVEN more for gas.

To me, it's the same thing that is crippling this country (through mortgages) It's a way for the upper 10% to make more money on the lower (less educated) 90%.

yes the "market" was deregulated, but the system is heavily regulated. if we had refineries in every state and able to drill responsibly, you think the speculators would be able to make so much off of it?

the mortgages... there was a report on NPR that was talking about felons getting out of jail and deciding to go into mortgages in florida, that has some regulations they talked about, but it really comes down to criminals in these professions and should be treated, reprimanded,sent to trial as such.

if safety equipment was no longer required, do you think gm ford and the others would stop putting near everything they can into safety?

there might emerge one or 2 "stripper models" but they'll still be good crash ratings even if they aren't tested to maximize that.

again, if we truely had a lassiez faire market, unfair companies & people would sooner or later fail under their own greed. Laws are made to protect the innocent (most, but that's another topic), so if people were fraudulent or knowingly making bad products, you're supposed to have a right to claim legal action, same with pollution. but that doesn't happen, cause we'd all have to sue the gov't, farmers, and most industries, and people that have cars that blow blue smoke.

is it Japan that requires people to replace engines every 3 years or something? what a subsidy to engine manufacturers!!!!

[daves87rs]

My thinking is that this will not last long....I'd be willing to bet prices will jump again by X-mas.....

It is still too easy to make money on oil.....

[CARBIZ]

But our dollar also dropped about 5%.

So? 5% still means we should be paying around $1.05 a litre, not 1.24.

[haypops]

is it Japan that requires people to replace engines every 3 years or something? what a subsidy to engine manufacturers!!!!

Unless there has been some big change Japan requires "the mother of all safety inspections" at three years of age (car; not the driver). The inspection is so stringent (Paint and scratches too!) that few people bother and buy new instead. Fortunately there is a strong export for used Japanese cars.

[Sixty8panther]

Offshore drilling won't do any good, though... that's something that will take 5-10 years to see any ROI..

We have to think ahead.... if we had

drilled in Alaska in 2000 this fiasco of

$4/gal would have been avioded!

[loki]

Unless there has been some big change Japan requires "the mother of all safety inspections" at three years of age (car; not the driver). The inspection is so stringent (Paint and scratches too!) that few people bother and buy new instead. Fortunately there is a strong export for used Japanese cars.

I've heard they do that in... England? maybe not scratches, but anything noticeable from a few feet away.

[Robert Hall]

We have to think ahead.... if we had

drilled in Alaska in 2000 this fiasco of

$4/gal would have been avioded!

I doubt if it would have made any difference...

[Sixty8panther]

either way moltar... we're drilling in alaska but all the

crude goes to Nippon & countries other than the USA!

That, my friend is stupid!

[Sixty8panther]

overly annal inspections are ECONOMIC DISCRIMINATION!!!

[Robert Hall]

The only inspections I've seen living in Colorado and AZ are bi-annual emissions inspections. Not even required for post-2002 cars.

[loki]

The only inspections I've seen living in Colorado and AZ are bi-annual emissions inspections. Not even required for post-2002 cars.

are these inspections free? cause if they aren't then it hurts "lower class" citizens that cannot or have not bought new"er" cars.

[loki]

To me, it's the same thing that is crippling this country (through mortgages) It's a way for the upper 10% to make more money on the lower (less educated) 90%.

this is the whole special interests debate. if everything was truely fair, these "special interests" would have no power.

[FUTURE_OF_GM]

either way moltar... we're drilling in alaska but all the

crude goes to Nippon & countries other than the USA!

That, my friend is stupid!

I don't think it would've because as of now, I've seen nothing indicating that we are paying higher prices because of demand.

Earlier this year we were on a 15 years surplus of gasoline, yet prices STILL climbed.

It's paper shuffling on 'the street' and nothing else IMO. Just some 'slick' people making money on the backs of us.

[Windy-57]

The thing is, we really don't know if the price is going to stabilize at $3.75 or wherever... given worldwide demand that is growing, instability in oil source regions, there is no reason to think it won't go up again in the US, to $5 or more within the next few years..so it would be pretty short-sighted to go buy a Hummer now..

Sorry, bit late on the reply.

Doesn't matter what we know and don't know, and the experts can argue what will happen next, but what really matters is what the consuming public believes. And my guess is that when prices dropped, a chunck of the consuming public (certainly not all, not even most, just a chunk) believe they would stabilize.

[Robert Hall]

are these inspections free? cause if they aren't then it hurts "lower class" citizens that cannot or have not bought new"er" cars.

They are cheap...about $25, every two years.

And both of these states do their registration based on a percentage of value...AZ seems higher % than CO, my Jeep was $150 last year in Denver, about $220 this year in Phoenix. The first year I registered my (2000) it was $550 in CO IIRC. Some states, like Ohio, do flat rate registrations, IIRC.

Edited August 26, 2008 by moltar

[GXT]

We're still getting hosed, however. Oil peaked at $143 a barrel a month ago. We were paying $1.36 a litre. Now, oil is around $114, which is a 25% drop by my accounts, yet we are paying $1.29 a litre - only a 5% drop.

Just like the price of our cars...

[longtooth]

Just like the price of our cars...

As the 'redistribution' of wealth continues across the globe and less and less of that wealth finds its way into the hands of consumers, prices will inevitably fall. The whole global economy is a pyramid scheme on a grand scale. Millions upon millions in China, India, the continent of Africa etc., are living in abject poverty that we here posting on this forum from the comfort of our dwellings cannot imagine.