What Price Will Fuel A Change?

With gasoline prices surging across the nation in the wake of Hurricane
Katrina's path of destruction in the Gulf of Mexico, the cost of
running a car appears to be heading for what some auto experts say is a
tipping point for American drivers.
The price of gas is now well above $3 a gallon in some parts of the
country, and the storm-related price surge comes on top of already
record-high pump costs. But despite the persistent rise in gas prices
this summer, U.S. motorists continued to buy up gas-guzzling light
trucks and SUVs as the big U.S. auto companies offered deep discount
programs to whittle down swollen inventories.
All that now appears to be changing. According to an unscientific poll
of automotive industry experts, a sustained gasoline price above $3 is
likely to push American car consumers away from buying large
gas-guzzling SUVs and light trucks and toward smaller, more
fuel-efficient SUVs and cars.
"Three is the magic number," said Mike Chung, automotive market
analyst at auto research Web site Edmunds.com. "It's not about gas
prices moving briefly above $3; the cost of gas will have to move above
$3 and stay there for a few months for people to realize this is
hitting their pocketbook hard - that's where we'll see a shift in
attitudes."
Chung says that, while SUV owners may have been willing to pay $50 to
fill a 20-gallon gas tank when a gallon cost $2.50, at $3 a gallon a
fill-up costs a SUV owner $60, and as the cost edges closer to $100 it
will start to make smaller cars look more attractive.
"With every major shift in gas prices over the last year we have not
seen a major shift in consumer buying practices, but there's
definitely a breaking point where people will consider smaller
vehicles, and $60 for a tank of gas is where we think people will sit
up and take notice," Chung said.
Devon Cohen, vice president of automotive services at LiveDeal.com, a
Web site for classified advertising, says employee discounts have led
to a glut of big, fuel-inefficient cars like SUVs. Nationwide, car
dealerships are reporting a significant increase in customers trading
in their SUV's for smaller, more fuel-efficient SUVs and cars, he
notes.
"I've spoken to a number of auto dealers and they are saying people
are coming into their dealerships with large SUVs, like the Escalade or
Yukon, and want to trade them in, but some of the dealerships are not
bidding on those cars because they already have too many," he said.
"They know they will hold those cars on their lots for a long time,
and as gas prices go up the value of those cars will go down - it's
a risk to their inventories."
>From the 1973 oil shock until 1981, when retail gasoline prices surged
to a nationwide average of about $3 in today's dollars after the
Iranian revolution of 1979 and the country's war with Iraq, the average
fuel efficiency of new U.S. vehicles doubled from about 14 miles per
gallon to 28 miles per gallon. New regulations passed following the
energy shocks of the early 1970s recommended that automakers make more
efficient vehicles, but those regulations were not binding and the
shift was due primarily to consumers demanding cars that could run
further on a gallon of gas, according to Lave.
"This short-term blip from Katrina will not last, but it's unlikely
we'll see a serious decline in gas prices from where they were a week
ago at $2.50, certainly over the next three to five years," Lave
said. "The main thing that will bring that price down is whether
there's some alternative to petroleum; there are some alternatives
out there, but unless Americans drive less and reduce demand for gas,
we'll continue to see higher prices."
"There's little question that the situation in the Gulf, if it
keeps gas prices high, will have an impact on consumers' car choices,
but will this period of higher gas prices be sustained long enough to
see people make major shifts in their purchasing decisions?" Langer
said. "Is the dramatic drop in SUV sales temporary, or the start of a
major trend?"
Another question is how the big car companies will react adds Langer.
"The big auto companies have found themselves in a bind - they
already several years behind in creating hybrids, but they also have so
many resources tied up in these vehicles it is hard to for them to make
the shift and give consumers what they want in the face of high gas
prices. They are stuck in a mindset that is hard for them to
respond," she said.
---

What do you think... will prices over 3 bucks a gallon cause a major
shift in the auto market?

Patrick
'93 Cobra

On 1 Sep 2005 18:31:47 -0700, wrote:

>With gasoline prices surging across the nation in the wake of Hurricane
>Katrina's path of destruction in the Gulf of Mexico, the cost of
>running a car appears to be heading for what some auto experts say is a
>tipping point for American drivers.
>The price of gas is now well above $3 a gallon in some parts of the
>country, and the storm-related price surge comes on top of already
>record-high pump costs. But despite the persistent rise in gas prices
>this summer, U.S. motorists continued to buy up gas-guzzling light
>trucks and SUVs as the big U.S. auto companies offered deep discount
>programs to whittle down swollen inventories.
>All that now appears to be changing. According to an unscientific poll
>of automotive industry experts, a sustained gasoline price above $3 is
>likely to push American car consumers away from buying large
>gas-guzzling SUVs and light trucks and toward smaller, more
>fuel-efficient SUVs and cars.
>"Three is the magic number," said Mike Chung, automotive market
>analyst at auto research Web site Edmunds.com. "It's not about gas
>prices moving briefly above $3; the cost of gas will have to move above
>$3 and stay there for a few months for people to realize this is
>hitting their pocketbook hard - that's where we'll see a shift in
>attitudes."
>Chung says that, while SUV owners may have been willing to pay $50 to
>fill a 20-gallon gas tank when a gallon cost $2.50, at $3 a gallon a
>fill-up costs a SUV owner $60, and as the cost edges closer to $100 it
>will start to make smaller cars look more attractive.
>"With every major shift in gas prices over the last year we have not
>seen a major shift in consumer buying practices, but there's
>definitely a breaking point where people will consider smaller
>vehicles, and $60 for a tank of gas is where we think people will sit
>up and take notice," Chung said.
>Devon Cohen, vice president of automotive services at LiveDeal.com, a
>Web site for classified advertising, says employee discounts have led
>to a glut of big, fuel-inefficient cars like SUVs. Nationwide, car
>dealerships are reporting a significant increase in customers trading
>in their SUV's for smaller, more fuel-efficient SUVs and cars, he
>notes.
>"I've spoken to a number of auto dealers and they are saying people
>are coming into their dealerships with large SUVs, like the Escalade or
>Yukon, and want to trade them in, but some of the dealerships are not
>bidding on those cars because they already have too many," he said.
>"They know they will hold those cars on their lots for a long time,
>and as gas prices go up the value of those cars will go down - it's
>a risk to their inventories."
>>From the 1973 oil shock until 1981, when retail gasoline prices surged
>to a nationwide average of about $3 in today's dollars after the
>Iranian revolution of 1979 and the country's war with Iraq, the average
>fuel efficiency of new U.S. vehicles doubled from about 14 miles per
>gallon to 28 miles per gallon. New regulations passed following the
>energy shocks of the early 1970s recommended that automakers make more
>efficient vehicles, but those regulations were not binding and the
>shift was due primarily to consumers demanding cars that could run
>further on a gallon of gas, according to Lave.
>"This short-term blip from Katrina will not last, but it's unlikely
>we'll see a serious decline in gas prices from where they were a week
>ago at $2.50, certainly over the next three to five years," Lave
>said. "The main thing that will bring that price down is whether
>there's some alternative to petroleum; there are some alternatives
>out there, but unless Americans drive less and reduce demand for gas,
>we'll continue to see higher prices."
>"There's little question that the situation in the Gulf, if it
>keeps gas prices high, will have an impact on consumers' car choices,
>but will this period of higher gas prices be sustained long enough to
>see people make major shifts in their purchasing decisions?" Langer
>said. "Is the dramatic drop in SUV sales temporary, or the start of a
>major trend?"
>Another question is how the big car companies will react adds Langer.
>"The big auto companies have found themselves in a bind - they
>already several years behind in creating hybrids, but they also have so
>many resources tied up in these vehicles it is hard to for them to make
>the shift and give consumers what they want in the face of high gas
>prices. They are stuck in a mindset that is hard for them to
>respond," she said.
>---
>
>What do you think... will prices over 3 bucks a gallon cause a major
>shift in the auto market?
>
>Patrick
>'93 Cobra
>
Yes.
--

Please Don't Steal - The Government Hates Competition

ZombyWoof
(take the dogs when replying via e-mail)

wrote:

<Begin Snip>
> What do you think... will prices over 3 bucks a gallon cause a major
> shift in the auto market?
<End Snip>

YES! When gas first rose after the 9/11 attacks I ditched my 2000 F-150 with
its 5.4 V-8 for a 2000 Honda Accord Coupe. I ended up getting about the
same range in miles on a tank of gas, but, the Accord was almost 1/2 the
price to tank up when compared to the F-150. Now I have gone even further
back and taken over my wife's 97 Civic because my job requires a lot of
travel. Words just can't describe how much I am enjoying 30 to 37 miles
per gallon right now, especially when I had over 300 miles of travel this
past week alone!

Naturally, I still want a 2005 or 2006 Mustang GT, but if the price of gas
gets too far out of control, I may have to pass! I figure the Mustang can
be no worse on gas than my 1996 T-Bird was, as long as it is driven
conservatively.

As for the F-150 that I had, when I pulled my Wells Cargo trailer, I was
lucky to get 14 miles per gallon with it, and it was really more like 11
MPG most of the time. Without the trailer, I managed to squeeze an
astounding 16 to 19 MPG out of it on the highway.

wrote in news:1125624707.912445.49250
@g47g2000cwa.googlegroups.com:

<snip>
> What do you think... will prices over 3 bucks a gallon cause a major
> shift in the auto market?
>
> Patrick
> '93 Cobra

Gasoline prices over $3/gal will cause a major shift in _every_
market. Everything will be going up due to increased fuel costs.
Ready for milk @ $5/gal?

Joe > wrote in news:kTWRe.9874$RO5.3415
@bignews5.bellsouth.net:

> wrote in news:1125624707.912445.49250
> @g47g2000cwa.googlegroups.com:
>
> <snip>
>> What do you think... will prices over 3 bucks a gallon cause a major
>> shift in the auto market?
>>
>> Patrick
>> '93 Cobra
>
> Gasoline prices over $3/gal will cause a major shift in _every_
> market. Everything will be going up due to increased fuel costs.
> Ready for milk @ $5/gal?
>

No.. and it wont happen anytime soon. How much has the retail index
shifted during the 1.50 to 3.00 rise? Think about it.

Not just that, but some are betting that the oil price will have dropped to
under $40 sometime in 1st qtr, 06. You know it's speculation has driven
the price up.


Lead-month crude oil futures fell $1.26 to $68.18 a barrel today {because
rumors of oil platform damage in Gulf are unfounded -wonder who started
them!} and the fact that oil is flowing through the LA pipelines, albeit
reduced, and the refineries will be up in a couple weeks.

Gas here in Central Ohio just dropped to $2.99, confounding the local
gripers who complain they are quick to rise and slow to drop..... while
milk stays steady at about 2.89

Backyard Mechanic > wrote in
:

> Joe > wrote in news:kTWRe.9874$RO5.3415
> @bignews5.bellsouth.net:
>
>> wrote in news:1125624707.912445.49250
>> @g47g2000cwa.googlegroups.com:
>>
>> <snip>
>>> What do you think... will prices over 3 bucks a gallon cause a
>>> major shift in the auto market?
>>>
>>> Patrick
>>> '93 Cobra
>>
>> Gasoline prices over $3/gal will cause a major shift in _every_
>> market. Everything will be going up due to increased fuel costs.
>> Ready for milk @ $5/gal?
>>
>
> No.. and it wont happen anytime soon. How much has the retail index
> shifted during the 1.50 to 3.00 rise? Think about it.
>
> Not just that, but some are betting that the oil price will have
> dropped to under $40 sometime in 1st qtr, 06. You know it's
> speculation has driven the price up.
>
>
> Lead-month crude oil futures fell $1.26 to $68.18 a barrel today
> {because
> rumors of oil platform damage in Gulf are unfounded -wonder who
> started them!} and the fact that oil is flowing through the LA
> pipelines, albeit reduced, and the refineries will be up in a couple
> weeks.
>
> Gas here in Central Ohio just dropped to $2.99, confounding the
> local gripers who complain they are quick to rise and slow to
> drop..... while milk stays steady at about 2.89

Talk to me next month when the effects ripple downward.

Damn, those rose-colored glasses must be nice!

On Fri, 02 Sep 2005 18:52:33 GMT, Backyard Mechanic
> wrote:


>
>No.. and it wont happen anytime soon. How much has the retail index
>shifted during the 1.50 to 3.00 rise? Think about it.
>
>Not just that, but some are betting that the oil price will have dropped to
>under $40 sometime in 1st qtr, 06. You know it's speculation has driven
>the price up.
>
>
> Lead-month crude oil futures fell $1.26 to $68.18 a barrel today {because
>rumors of oil platform damage in Gulf are unfounded -wonder who started
>them!} and the fact that oil is flowing through the LA pipelines, albeit
>reduced, and the refineries will be up in a couple weeks.
>
>Gas here in Central Ohio just dropped to $2.99, confounding the local
>gripers who complain they are quick to rise and slow to drop..... while
>milk stays steady at about 2.89

It would take a long period of sustained high prices to get people to
change. Sure, some will sell their SUVs and 4X4s, but the majority
won't. Once the other prices kick in, like the $5 a gallon milk, more
and more people will change "some" things.

The higher prices might more quickly lead to remote employees working
from home rather than go in to work.

The car makers had already decided to start thinking smaller SUVs even
before this mess, due to sales.

Essentially, it would take a federal mandate to force people to
change.

And, the oil pundits are predicting the price per barrel will rise for
a bit and then quickly drop back to under $50 per barrel, because, as
they say, societies around the world could not sustain with long term
high prices. Chaos would result, and likely lead to global conflicts
and revolutions.
Spike
1965 Ford Mustang fastback 2+2 A Code 289 C4 Trac-Lok
Vintage Burgundy w/Black Standard Interior; Vintage 40
16" rims w/BF Goodrich Comp T/A gForce Radial
225/50ZR16 KDWS skins; surround sound audio-video.

Gad what fools these morons be....
Children are obscene but should not be heard
Give me a peperoni pizza... or give me a calzone!

Joe wrote:
>>Gas here in Central Ohio just dropped to $2.99, confounding the
>>local gripers who complain they are quick to rise and slow to
>>drop..... while milk stays steady at about 2.89
>
>
> Talk to me next month when the effects ripple downward.
>
> Damn, those rose-colored glasses must be nice!


Indeed. Soda and bottled water are more expensive than gas and cheaper
to produce, but you don't see people rising up in the streets with
pitchforks over that...

*shrug*

Of course, those are things which most people don't feel that they
must have to survive. Fuel, on the other hand, impacts them directly
in the pocketbook, and as transportation costs rise, hits them again
for increased costs of food and other necessities, and well as
comforts.

And I know I am not alone when I say that others here recall the gas
crunch in the 70s when fuels were rationed, and stations ran dry...
when tankers were hijacked... when cops had to respond to fights at
service stations... and even when emergency agencies ran out of fuel
and had to park 'em. Things could be much worse than they are now.

There were times when we had only one patrol mobile at a time to serve
a community of 80,000+. The rest would be stationed around and just
sit and wait for a call. The plus side was a mandated walk a beat in
the neighborhood. Cops actually got to know the people they served.

And you had the doom and gloomers who predicted the end of
civilization as we knew it, and the positive attuders who said it'll
pass. It did pass. Gas never went back down to what it had been, but
everyone adjusted to it and went on about their business.

Some people changed the way they lived. Must have. Somebody had to buy
those Mustang IIs. Not much else did though. And in time, everyone
forgot about what they went through.





On Sat, 03 Sep 2005 17:14:27 -0400, Ritz > wrote:

>Joe wrote:
>>>Gas here in Central Ohio just dropped to $2.99, confounding the
>>>local gripers who complain they are quick to rise and slow to
>>>drop..... while milk stays steady at about 2.89
>>
>>
>> Talk to me next month when the effects ripple downward.
>>
>> Damn, those rose-colored glasses must be nice!
>
>
>Indeed. Soda and bottled water are more expensive than gas and cheaper
>to produce, but you don't see people rising up in the streets with
>pitchforks over that...
>
>*shrug*

Spike
1965 Ford Mustang fastback 2+2 A Code 289 C4 Trac-Lok
Vintage Burgundy w/Black Standard Interior; Vintage 40
16" rims w/BF Goodrich Comp T/A gForce Radial
225/50ZR16 KDWS skins; surround sound audio-video.

Gad what fools these morons be....
Children are obscene but should not be heard
Give me a peperoni pizza... or give me a calzone!