In a report on GM's sales in China, there's a link to a CNN video about falling gas prices. (Douglas McIntyre blogged about the report earlier today.) Apparently, lower gas prices are making some American consumers think about buying SUVs again. We've heard so much about smaller cars lately, and hybrids and new technologies. But this report -- and basic knowledge of American culture and consuming habits -- suggests that these improvements are a long way off. The American love affair with large, inefficient vehicles shows no signs of ending anytime soon. Even though gas prices are still over $2 per gallon in most parts of the country -- and nearly $2.50 per gallon on the west coast -- they are low enough to bring visions of unlimited power and size back into many consumers minds.
Are we really that shortsighted? I suspect so. And you can bet that General Motors Corporation (NYSE:GM) and Ford Motor Company (NYSE:F) and Chrysler hope we are. The last few quarters have shown just how much the American auto producers rely on SUVs to make money. When consumers start demanding better and smaller cars, the red ink begins to flow through Detroit. American companies simply cannot compete with the Japanese when it comes to fuel efficiency and small cars.
This raises the interesting question of what is really in the best interest for the United States. Should we hope (and fight) for cheaper gas so that Detroit can make money and Americans can satisfy their fantasies of power on the roads, or do we bite the bullet and try to design more efficient vehicles? It may be that the short term interests of Detroit and the American consumer are at odds with the long term interests of the country.



Reader Comments (Page 1 of 6)
11-16-2006 @ 2:35PM
Jim Bryant said...
There is no fuel shortage. Every bit of the bull we have been fed is because of a government sanctioned rip-off of the consumer by the oil companies. I call it the 30 year joke. The oil embargo of 1973 is where I think it begins. It won't end either until we can come up with something else to use instead of gas. The oil companies and the government have practically ruined the American dream for the middleclass. Also charity begins at home. I don't care to hear about starving Ethiopians in Africa when we have starving people over here. We don't owe other countries anything. Most of the countries we give money to are against us and would laugh at us if our country fell. We need to take back America and make it the place it was supposed to be.
11-17-2006 @ 12:43PM
Gumbo said...
Jim Bryant
If you are not an American and you live in Africa or wherever, think about it.... MOst of us on Planet Earth is not an American.... Whose fault is it?? your dumb gas guzzling habit , that is...
11-17-2006 @ 3:12PM
Michael Manicone said...
I wish to add another significant issue to the gas-guzzling SUV discussion: Vanity.
People who are getting up in the high income levels want their friends and neighbors to know that they have arrived in the "big money" and can afford one of the bigger SUV's.If the "soccer-mom" image wasn't enough reason not to buy something sensible, the image projected by Hummers or Expeditions is a sure sign you are really raking in the money.I feel that lower prices for fuel will make people feel it's OK to get that really safe, big , 15 MPG (downhill) SUV.
11-17-2006 @ 5:00PM
Jim Bryant said...
Back to dumbo...I mean gumbo. What I said is the truth..deal with it because if you are a real American you would agree with me.
11-18-2006 @ 9:02AM
EG ALBRIGHT said...
WHAT IS THE DIFFERENCE BETWEEN AN SUV GETTING 15 MPG
AND A SEDAN GETTING 15 MPG. MY ESCAPE 2001 GETS
18 MPG AROUND TOWN AND 22 MPG HIGHWAY.HOW DOES THAT
COMPARE TO A JAGUAR ?
11-27-2006 @ 9:32AM
William Arney said...
Gasoline prices seem to have no effect on the sale of foreign cars. Seems the American consumers no longer believes in buying American products and keeping Americans jobs. Don't talk about companies that outsoucrce when the American consumer is the biggest outsourcer of all. Even some of the big politicians in Washington drive foreign cars, where is their love for America and the American worker. You can be assured of one thing: "YOU WILL NOT PARK YOUR FOREIGN CAR IN MY DRIVEWAY."
11-20-2006 @ 2:52PM
Robert Paul said...
Ford Motor Car Co. and General Motors have been in business since before most of us were born. They contribute billions of dollars to the economy of the United States. We all can help the workers in this country if we buy only those great products from the manufacturers that build these fine cars made right here in the USA. By the way, Mexico is a good neighbor. They help build some of those cars. I recall in the good old days when Speedway '79 sold gas in Detroit for .06 cents a gal. In an emergency once, I bought .25 cents worth of gas...and the owner of the station pumped the gas for me. Ah--the good ol' days!
11-20-2006 @ 7:04PM
Paula Walach said...
Here in the State of New Hampshire,,,,,,,,,,,,
It is a road worrier's driving SUV/biggest pick up truck that can be bought paradise. In spite of higher gas prices, they will demand bigger more glitzy vehicles. They see the gas go up and they will say YAHOO and drive all the more. All the while over the years electing usually Republican officials for varoius state and US gov positions. Those people are viciously against any other form of alternate transport such as electrified rail systems with power generated from wind. See Calgary transit Alberta Canada and their wind powered light rail system.
Please! this view in my opinion is not to outlaw the automobile. I'm trying to make a point that world oil production may be peaking in about as little as ten years. We should have alternate transportation to the automobile.
In the future this may be a joke of what I'm about to say, but it may be wishful thing of what is to come with world peak oil production. New Hampshire residents may be opting to drill for oil in their back yards,and setting up mini refinaries so that they can feed their biggest SUVs/and humungus pickups. In my sarcastic opinion, they will turn out to be dry oil wishing wells. That is the typical wish of New Hampshire residents with the biggest of vehicles because they don't like alternate vehicles or alternate travel modes like rail.
The PT Barnums of transportation policy rule New Hampshire. Their motto is "Live free and drive" And it is ones civic duty to buy a new vehicle every year regardless if you could afford it.
My motto is "Live to drive or die"
Paula W.
11-27-2006 @ 2:43PM
Rich Shull said...
The Truing Motor a GREEN 70 % efficient autistically designed car motor that could get a reasonable car 100mpg and be near zero emissions.
Autism has given the world many things including the computer and if we have figured out our thought process and keen senses we do well in real life contary to the modern autism ideals. Autism explains everything from Einstein to dyslexia.
Along those lines Henry Ford and others just discovered the obvious piston and cylinder we still use today. Engineering wise they couldn't tell you how it worked. Few people can tell you how it works-think of all the cars that can't be fixed and the freeble attempts by mechanics to get them to run.
My Turing Motor is designed from the flame of combustion backwards and spins 2,3,4 times with every firing. No parts move up and down and it starts with a puff of compressed air. Just like the Autism that designed it /it is not understood and I have been trying to get it built for years now. Please look at my blog for more. Rich
http://prerainmanautism.blogspot.com
11-27-2006 @ 4:19PM
D P TOSKEY said...
There really must be a shortage of oil, if one of the largest oil producing countries IRAN feels it needs to rely on nuclear energy.
11-27-2006 @ 3:10PM
frank said...
if we had 10 cent per gallon gas, it wouldn't change the FACT that the emmissions are slowly killing our planet(and us).It's not un-american to want to conserve. It is , however, stupid to waste. And i'm sorry, but although i would love it if i could buy an ALL AMERICAN VEHICLE that would last past the end of my payments and get 30+mpg, alas, we don't make those. OH, and although i and my spousal unit knock down a decent chunk a change every month, we don't drive "big rigs", as she calls them. It is not an American ideal to drive a large vehicle. It's like my baby says when she sees a neighbor all alone in an EXPIDUMMER going to work. "He must have a really small penis". Granted, there are folks that need a large vehicle. But most of us drive to work alone, and should be in a vehicle that helps the planet die slower.(Fuel- efficient)
11-27-2006 @ 2:51PM
David B. said...
The point of this article seems to be evading alot of people. While alot of the comments here have valid issues, most people seem to miss the point. Attacking someone's patriotism because they drive a toyota is absurd. I'm sure a number of soldiers in Iraq drive Toyotas, Nissans and whatnot. Better find a better arguement, folks. And let's not be ignorant. The USA is in desperate need of fuel effecient cars. Not just for the sake of our wallets, but also for the sake of the air we breath. If you think pollution is a topic discussed by hippies and tree-huggers, then none of you live in a major city, do you? Also, think of the worldwide implications if the USA was no longer reliant on outside sources for its energy needs.
11-27-2006 @ 2:59PM
Mom of six that drives a Suburban said...
For those of you out there that are self centered enough to think that all of us that drive 'Big SUV's" for the fun of it could be wrong. I drive mine out of necessity. I have six children and a 33 foot travel trailer. I have yet to find anything in a car that can handle that pay load. So the next time you want to slam on someone try looking in the mirror.
11-27-2006 @ 5:18PM
steve said...
excuse me, let's not forget that many,if not most, of the foreign cars you see on the road are built in america. when i see so many suv's on the highway, it really makes me sad and angry. most of them are occupied by one person, and that person is usually not even capable of driving a vehicle that big. here's my solution: if you drive a suv over the size of a gmc jimmy, you will need a different (more expensive) drivers license, you will also have to have driver's ed. to qualify you for that vehicle. some of these suv's are really small commercial vehicles that at one time you would need a special license for. if you need something that big to haul you ego, you should have to pay extra for it. i hate having to share the road with these vehicles.
11-27-2006 @ 3:46PM
Dawn said...
Its so silly for you to say that people who wish to own or do own SUV's do it for vanity. I just bought the brand new Expedition EL Guess what? Im not a soccer-mom nor am I trying to say "I have money" If that was the case I would have bought a Navigator or Escalade. (a fully loaded Limited Expededition EL is half the price) Some of us do need the big SUV to tow with and to carry things. A car isnt going to tow our trailer nor will it let me carry 3-4 dog cages at at time plus fit passengers. Maybe its not fair that you lump people who buys SUVs as vein and show offs.
11-27-2006 @ 3:15PM
The Geekess said...
Mr. Arney,
Are you not aware that Mercedes, Honda and Hyundai all build cars/trucks/SUVs in Alabama? Toyotas are being built in Tennessee. But that's okay; I'll keep my Hyundai gas sipper in my own driveway, thank you very much.
11-28-2006 @ 12:10AM
Dave said...
Enjoy Peak Oil everybody.....
We did it and we're the ones who will suffer the most. Iraq is a resource war and nothing but -- and why?
"America's way of life is not negotiable" - Dick Cheney
11-27-2006 @ 3:34PM
Erik Buck said...
Those who denounce SUVs obvioulsy don't have six children in a northern state. Or, if they do, the whole family never travels together.
If you have ever seen the interior of New Hampshire, you would know that electric rail transport, wind powered or not, is not not feasible.
Yes, you can go from New York to California without burning petroleum, if you can find a sailing ship to go around Cape Horn.
11-27-2006 @ 4:52PM
Dawn said...
It makes you sad and angry to see someone driving an SUV on the highway alone?? Please!!! Something you would assume if you passed me on the highway How can you possibly see whats in the back of someones SUV?? Its sad that you judge when you havent a clue? An SUV is a vehicle not a SEMI truck and it doesnt require special training to drive. There are plenty people who drive cars who havent a clue either. There are also days that I do drive alone. I dont have the luxury of being able to afford more then one payment on a car (not your business anyhow) Dont judge the people who drive SUV's it just shows your ignorance.
11-27-2006 @ 3:39PM
valari said...
I drive a SUV because I live in a snow belt and have to drive 25 miles each way to work. I do not know how many times I have been Rear-ended by drivers not paying attention to what is going on around them. So the next time you see one person driving an SUV dont be so quick to judge them.