Have Gas Prices Altered Driving Habits?
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Four dollars for a gallon of gasoline appears to be the magic number that has changed America’s driving habits. Perhaps forever, or at least until a renewable and cheap alternative is available. This (the alternative) is the subject of a future post.
What Is The Magic Price?
There was was wide range speculation by the so-called “experts” as to what dollar per gallon would cause us to alter our driving habits. Was it $3…$4…$5?
After hurrican Katrina hit and knocked out refining capacity, gas prices went to $3 per gallon. A price never before seen in America. It was a real shocker for people to see gasoline price signs starting with the number 3 for the first time. But this barely caused a ripple in the marketplace. People merely changed from cash to credit to buy gas.
What Recent Studies Have Shown
This may have been a not so smart move. It sent a signal to the oil companies that the limit could go higher. Rather than start to press their elected officials, people merely followed along like lemings and shelled out more.
Its no wonder that the oil producers were and are, getting aware with highway robbery (no pun intended) when you learn that in a 2004 survery by Maritz Automotive Research, that a paltry 4% of buyers said that fuel economy was their most important criterion when buying a car; the figure for how many cupholders were in the car was much higher.
A further study done in 2005 revealed that if gas prices remained at four dollars a gallon for more than a year, drivers would cut back their fuel consumption by only 5%.
Now folks, do you think that maybe the oil companies have read these surveys? Do you think that are being smart and raising prices as high as they can get them before people (at all levels) finally smarten up? Do you feel we’re being manipulated?
Just look at the record profits of these companies and you have your answer. “Of course they are.” Wouldn’t you if you had a commodity that everyone needed and you controlled the marketplace where it was sold and you had the people who could force you to change in your hip pocket?
But four dollar a gallon gas is proving now to be a much bigger deal than everyone had anticipated.
According to the AAA, the national average for a price of self-serve regular grade gasoline hit $4 a gallon on June 6, 2008. California reached this milestone on May 22. Even adjusted for inflation, its the most expensive gasoline ever on record.
And never mind the wisdon of surveys or the predictions of economists, $4 dollar gasoline is having a substantial negative impact in the marketplace.
How Prices Have Affected The Marketplace
Here’s an indicator. For the last 26 years in a row, the Ford F150 has been the best selling vehicle in America. And that remaind unchanged through Apricl 2008. Then in May 2008, the F150 plummeted, not to number 2 or number 3 or even number 4 spot. But to number 5.
The Chevy Silverado joined the F150 and dropped from number 2 to a dismal number 6. And the Dodge Ram fell completely off of the list. Toyota Tundra sales were off nearly 1/3 and Yoyota Tundra sales were off by a whopping 50%.
The gas guzzlers are dying a rapid death. They’re the modern day dinosaur. Big and tough but completely vunerable and the car makers got caught with pants down. How could they not see this coming?
This proves to me that the great majority of full size pickups are bought purely for want not based on need. Suddenly it’s no longer “cool” to tool around in a big macho 4X4 pickup with an empy bed in the back (except for maybe the family dog).
Gasonline isn’t in short supply (remember when gas was supposed to be running out back in the early 1970’s). It’s just being artificially manipulated to a high level and as a result auto makers are finally getting serious about fuel efficient vehicles and alternative fuel source engines.
The day of the big high performance car, truck or SUV isn’t over, it’s just becoming a market niche (a small one) but I believe it’ll always be there for those who want to pay the price (at the pump).
Auto executives have admitted that this isn’t a temporary spike, it is by and large permanent.
Stay tuned……
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