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.
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Reader Comments (Page 6 of 6)
1-08-2007 @ 12:32PM
A Strasse said...
I can't, don't, won't drive any SUV. Contrary to public opinion they are not that safe in addition to costing a fortune to purchase and another fortune to keep running.
I am interested in this Truing green motor that Rich Shull is talking about--went to his site--nothing there. There is a market for that engine--there is a market for everything! Anybody got any info?
1-08-2007 @ 12:37PM
MICHAEL said...
It would stand to reason that perhaps an answer would be fuel-efficient SUV's. It appears to be a false choice between small cars and large vehicles when either hybrid, diesel, or fuel-cell applications would benefit all vehicles.
1-13-2007 @ 11:50AM
Pagan Laura said...
Safety, yes, is a very important factor in these big SUVs. Four wheel drive helps some in the winter, on snow, but remember, it gets you going, it does not help you to STOP.
I think alot of people would be more at ease if these big SUVs did not 'hotrod' around, like they owned the road. I know that 'not everyone drives like that' and you have just as many little sportcars jumping lanes and running a yellow light when it is about to turn red, but its the bad drivers that we remember, not the good ones.
In Kentucky, the rule seems to be 'the bigger the tires, the more rights you have on the road'. We have an old Caddy sedan that we drive most of the time, safety first. It is a heavy car that has alot of protection, but nothing is going to save you if the grill of a raised pickup or SUV comes through the window.
Our other vehicle is an old Ford van. Used for hauling the big stuff. It doesn't get quite the mileage that the Caddy does, but the Caddy is not a truck.
With the quality of our breatheable air going down, we should come up with an affordable alternative for transportation. If cars, vans, trucks, came out tomorrow that got 200 MPG, who can afford them?
People who can only afford a $300.00, gas guzzling, smog producing vehicle will not be able to run out and purchase a better solution. It will be 10 to 15 years before the 'good' cars are available to the less fortunate... including me.
I do not believe there is a true oil shortage, I think the higher ups are greedy and since they can get it, they do.
I also believe that Americans, in general, are wasteful. Look at our landfills. Looks at the disposable items to buy.
Everyone that gives a care about the environment should join their local chapter of freecycle, and give away unneeded items instead of tossing them in the trash to go to the dump. It's a small thing, but it might help!
Pagan Laura
1-08-2007 @ 1:51PM
ROBERT LITTLE said...
I BELIEVE FINDING MORE OIL WILL BECOME A PROBLEM, BUT THERE ARE PEOPLE AND COMPANYS WORKING ON THIS. WE HAVE SOME HUGH RESERVE HERE IN THE US...COAL..AND THEY ARE WORKING ON CONVERSIONS TO LIQ FUEL, CHEAPER AND CLEANER. CK OUT RENTECH SITE AND READ ABOUT IT..BEING DONE NOW..AND SOME BIG THINGS WILL HAPPEN WITH IT...GONNA BE A WHILE ..BUT WILL HAPPEN..BUT UNTIL IT DOES WE NEED TO CONSERVE WHAT WE HAVE..SO ILL DO MY PART AS I WOULD EXPECT ALL OTHER AMERICANS TO DO TEXAS BOY THAT DID LOVED HIS BIG TRUCK..BUT IT HAD TO GO TO PRACTICAL TRUCK TKS
1-08-2007 @ 2:54PM
Andy M said...
ITS a NO BRAINER: America CAN have its cake and eat it too: The greatest single initiative that will secure America's security and ecomony is to eliminate our dependance on fossil-fuels. A few of the opportunities: the choice to drive an SUV will remain, massive reduction in mankind's contribution to global warming (90% of current oil production goes toward transportation), cutting off the flow of money to Middle Eastern terrorists and totalitarian regimes now controlling oil production, regaining America's pride and dominance in the automotive industry. We have the brains, the resources and the technology to make it happen. Reading these comments, I see the fat cats at the top, with their million dollar bonuses, dividing and conquering the middle-class with their continual con jobs from oil-shortages to raise profits to their pitiful assertion that the technology isn't there. It just won't fly--look at the advances in computers, cell phones, medicine, etc. in the past 20 years: and we're still burning dinosaur bones as fuel! Our country will be alot healthier for alot longer if we can find a way to blow a huge proverbial fart and get rid of our gas problem! Power to the people.
1-08-2007 @ 2:16PM
Paul Mallorey said...
I'd like to see those of you in love with banning SUV's try and survive the winter we are having in Colorado this year. Who is short sighted and narrow minded? My Jeep gets 24 miles to the gallon. Most of the Hybrids only get that in the city. Most of them in Denver are either still buried in a snow bank or locked in the garage.