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Discussion Starter · #1 ·

Gas prices right at $4 a gallon is actually just what we need
By Warren Brown

LOS ANGELES — Politicians and pundits would be wise to forgo celebration of recent declines in crude oil prices. They would be wiser still to support federal legislation that would keep pump prices at a minimum of $4 a gallon for regular unleaded gasoline.

Clearly, I am not running for office. And, yes, for all of you who have asked, I and my associate, Ria Manglapus, pay for our own gasoline. Our combined tab to run last week’s vehicles — a Ford Flex wagon, Pontiac G8 mid-size sedan, and a small Scion xD hatchback — was $210.73.

We understand pain at the pump. We’re feeling it!

Still, this column favors high gasoline prices. Pricey gasoline is bringing a discipline to the marketplace that is long overdue. It is doing what the politicians and all of their phony Corporate Average Fuel Economy (CAFE) regulations have failed to do. It is forcing consumers, finally, to share a reasonable part of the burden for conserving fuel and reducing our dependence on foreign oil.

The early evidence, culled by the Transportation and Energy departments and researched and reported in trade journals such as Automotive News, is that consumers are driving more wisely, which means they have reduced their speeds in many cases and have cut out unnecessary driving altogether in others.

Americans have driven 10 billion fewer miles this year than in 2007. That’s less oil-based fuel burned, less tailpipe pollution spewed.

Consumers are beginning to make wiser vehicle choices. Sales of big trucks were down 32.3 percent in the second quarter of this year, according to the Automotive News Data Center. Sales of cars and trucks with more fuel-econom-

ical four-cylinder engines are soaring. (Is it any wonder that Honda, the longtime master of zippy, small engines, is the only car company reporting sales increases in the currently depressed U.S. automotive market?)

All major car companies are redoubling their efforts to roll out more fuel-efficient vehicles. Every engineering department at every manufacturer is re-examining materials, trying to decipher what can be done to reduce vehicle weight without compromising safety or performance, trying to figure out how to reduce the rolling resistance of tires without unduly increasing the braking distances of the cars and trucks they carry.

There is now in the global automotive industry an excitement about fuel economy that rivals the emotion of the industry’s legendary horsepower wars.

That is a very good thing. And it is happening because of what is happening in the world’s most lucrative automotive market — the United States of America.

Our market is in many ways becoming like those of Europe and Asia because we at long last are beginning to face the realities of fuel availability and costs that have affected consumer and corporate behavior in other developed countries.

Please note: I put consumer behavior ahead of corporate behavior because it is my belief that corporate behavior follows consumer behavior and demand. I’ve never accepted the notion that advertising controls the mind of the mass market. If that were true, cars such as the Yugo and Ford Edsel, and abominations such as the Pontiac Aztek crossover, would have been resounding successes.

Heck, if advertising ruled the consumer world, the once expensively marketed Toyota Tundra pickup truck would be selling like gasoline priced at $2 a gallon.

But Tundra sales have tanked. For the next three months, Toyota will shut down production of Tundra models at plants in Indiana and Texas to try to bring inventory in line with greatly depleted demand.

Meanwhile, Toyota and its rivals domestic and foreign are working overtime to strengthen their inventories of attractive, fun-to-drive small cars.

All of those changes have come about — and are continuing to come — because of gasoline priced near or above $4 a gallon.

And that is why — to be blunt about it to the point of rudeness — the politicians and pundits whining about high gasoline prices ought to shut up.

We finally are moving toward the more fuel-efficient, less oil-dependent America we say we want — the one the politicians, pandering for votes, tried to get without any consumer sacrifice.

High fuel prices are doing the job the politicians refused to do. If they really want to help America in that endeavor, they should do something that is completely counterintuitive, given the national angst over prices at the pump. They should put forth legislation to keep those prices at least at $4 a gallon via taxes or fees.

That ultimately would do more to wean us from oil than Republican demands for increased offshore drilling, or Democrats’ insistence on federally mandated increases in fuel economy for a market that will accept the end products only if the price at the pump is right.

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64 Posts
Discussion Starter · #4 ·
then again, maybe they haven't learned their lesson...


SANTA MONICA, California — Car buyers' massive shift toward high-mileage little cars during the second quarter shook the auto industry, but new research by Edmunds.com suggests that American consumers already are rethinking their new obsession with fuel efficiency.

When gas prices began dropping in July, truck shoppers dramatically reduced the extent to which they cross-shopped in the other major vehicle segments — cars, crossovers and hybrids — compared with June. People considering SUVs did the same thing but to a lesser extent, Edmunds.com research has indicated.

At the same time, in July, consumers' consideration of presumably out-of-favor segments including large crossovers, minivans and sports cars began a significant recovery, while consideration of small cars and hybrids actually began declining from levels in June.

"It's human nature," said Jeremy Anwyl, CEO of Edmunds.com. "There's been a rush to small cars, but that doesn't necessarily mean it's permanent in its extent. There's already been an abatement of a pattern that many people, in June, were announcing was permanent."

Edmunds.com's data is based on measurement of activity on Edmunds.com, one of the leading consumer-research sites in the auto business.

In July, 45 percent fewer truck browsers cross-shopped in the car segment than had in June, 46 percent fewer shopped crossovers and 47 percent fewer shopped hybrids — while 37 percent more of them considered only a new pickup, compared with the previous month, according to Edmunds.com calculations.

Meanwhile, there was the same trend, though less pronounced, among SUV shoppers. In July, 11 percent fewer SUV lookers considered cars, 13 percent fewer pondered crossovers and 27 percent fewer took a gander at hybrids, compared with June shoppers. Meanwhile, 13 percent more SUV considerers in July, compared with June, decided to shop only for new SUVs.

"These consumers appear to be feeling less pressure to cross-shop more fuel-efficient segments and are shifting slowly back to previous shopping patterns," noted David Tompkins, executive director of industry analysis for Edmunds.com.

Even more recent data, for overall new-vehicle consideration by Edmunds.com visitors, supports even more broadly the possibility that plunging gasoline prices already are causing Americans to reconsider their preoccupation with fuel economy.

Consideration of hybrids on Edmunds.com was down 34 percent for the week ended August 3 compared with its peak in June. Similarly, midsize-car consideration was down 13 percent in the same comparison, compact-car consideration declined 18 percent and subcompact-car consideration declined 7 percent. However, during the week ended August 3, consideration of those segments was still up 24 percent, 35 percent, 33 percent and 84 percent, respectively, compared with December of last year.

Meanwhile, most of the segments that had been hit hard during the second quarter, in terms of consideration by Edmunds.com visitors, had bounced back at least somewhat by the week ended August 3.

Large traditional SUVs drew 3 percent more consideration in that week compared with June, while consideration was still down by 19 percent compared with December. For large crossovers, consideration rose 24 percent the week ended August 3, compared with June, while still dropping 24 percent compared with December. For midsize SUVs, the numbers were a 15 percent increase compared with June and a 38 percent decline compared with December.

Large cars enjoyed 5 percent more consideration against June, but 20 percent less versus December 2007, the Edmunds.com data shows. For minivans, the numbers for the week ended August 3 were a 15 percent increase, and an 11 percent decline; for midrange luxury SUVs, a 16 percent increase and 13 percent decline; for premium luxury SUVs, a 14 percent increase and a 33 percent decline; for premium luxury cars, a 20 percent increase and a 40 percent decline.
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