Friday, June 6, 2008

Gas Prices Finally Impact US Car Sales

More on the better side of record gas prices

For some reason pickup trucks and SUVs have rooted themselves in American culture. Apparently they serve as symbols for strength, power, durability and more values that are held dear to many Americans.

I’ve read somewhere the pickup serves as the modern horse, keeping the old west’s heritage alive. With all due respect to culture it seems more and more Americans are finding it hard to continue maintaining these gas eating monsters with gas prices constantly rising.

Americans save on gas by switching to economy cars

According to Reuters US auto sales tumbled in many as consumers spurned pickup trucks and SUVs in the face of record gasoline prices, driving General Motors Corp (GM.N), Ford Motor Co (F.N) and Chrysler LLC to double-digit declines.

Furthermore, Japan’s Honda Motor outsold Chrysler for the first time to emerge as the new No. 4 U.S auto-maker with Toyota closing the gap on General Motors.

Record gas prices apparently sent Ford’s sales tumbling down by 16% and General Motor’s sales by 28%. Honda, on the other hand, registered a 16% in Civic model sales which are fuel economic. Pickup truck sales were reduced by 30%.

Could it be Americans are realizing how wasteful and costly these vehicles are?

The smell of change is in the air but history teaches us we humans quickly adapt for better or worse. In the 70’s the oil crises caused gas prices to soar forcing Americans to seek cheaper more economic alternatives. This was the growth bed for the Japanese auto industry in the US.

Now, as then, it’s money and economic considerations which make the biggest difference (rather than ideology, environmentalism and more). As long as gas prices remain at all time highs this trend will continue.

However, should prices drop or remain stable I believe the public will quickly get accustomed to paying more on gas slowly turning the trend back around.

Americans driving at historical lows

In the meantime we get to experience the better side of high gas prices. A press release by FHWA reports Americans drove less in March, 2008 continuing the trend from November 2007.

Additionally, the U.S. Department of Transportation estimated that greenhouse gas emissions fell by an estimated 9 million metric tons for the first quarter of 2008.

Record gas prices take their toll on countries and people all around the world

In India three county states went on strike a response for high gas prices. Malaysia suffered mass demonstrations after the government announced a 41% increase in gas price while in France and Spain taxi drivers blocked highways and roads to protest against record prices.

Governments seemingly have their hands tied having little other choice than to constantly adjust prices. But that is only half a truth. These countries can and need to make strategic decisions regarding their dependence on oil as an energy source.

New Zealand recently announced its strategy of becoming the first sustainable nation in the world and will balance its gas emissions. Furthermore, currently 70% of New Zealand’s energy is generated from renewable sources and it has committed to a goal of 95% by the year 2025. That’s strategy and definitely a lesson to be learned by leaders everywhere.

Hopefully the environmentalist trend is here to stay even when gas prices cool down a bit.

Image by: code martial

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3 comments:

Unknown said...

Surely the small size of New Zealand and its unique geography as well create significantly easier ways of creating renewable energy resources. However, places like the US and other countries don't have the same circumstances. Because of this NZ may not be as good an example to other countries as the author may lead you to believe.

Unknown said...

I disagree with what the author said about NZ being a good example for other countries. NZ has a very unique geography and is likely not a very viable example to other countries such as the US. However, if NZ is able to come up with unique and innovative technologies which are effective and easily adaptable to most terrains than NZ can indeed be a great example.

Dorian Wales said...

I agree but that wasn't my argument. I was calling for making strategic goals. If we can only manufacture 20% of our energy from reneable sources so be it... it's the goal that counts.