Gas prices debate strikes back; American drivers adjusting "quite nicely"
In an article recently published on Automotive News, Keith Crain analyses the increase of gasoline prices in the States and the impact for American manufacturers.
Oil prices not only affect drivers but has a deep impact in the economy: everything is transported with fuel and oil is a cost material for lots of products. He affirms that the country can cope with higher prices and won't enter recession. Drivers, he says, are already adjusting "nicely" to the higher price of fuel, as everybody gets used to the higher fuel prices and figures out how to budget accordingly.
Crain also compares prices with Europe, where consumers are already paying double, mostly because of the high taxes used as a deterant for fuel consumption (did you know that in some places a part of that tax goes into the Public Health services?). "Our leaders have not yet figured out how to do that without committing political suicide", said Crain.
[Source: Automotive News, sub. req.]
Therefore, it's getting tougher for manufacturers to figure out what products to design and engineer and tougher for dealers to figure out what to buy and stock. Customers want the same vehicles with a 20 percent improvement in fuel economy. He affirmst that it's very easy to say for the government and for the consumer, but it will be very difficult for manufacturers.
So do we really agree with him when that manufacturers can't make more efficient cars overnight?
Incidentally, it was announced today that some automakers are close to calling for fuel economy standards as high as 36 mpg for cars (in 2022) and 30 mpg for light trucks (in 2030). The proposal would be offered as an alternative to a fuel economy measure scheduled to be considered by the full Senate the week of June 11.
Reader Comments (Page 1 of 1)
Cody Ellis 12:04PM (4/23/2008)
Were adjusting nicly to inflation of gas becase we have to. becase so far only independent truck drivers are trying to do any thing about it. the oil companys get away with it becase,really whos going to stop them. most of congress probobly have there hand in the cookie jar too.really the only people who could try to stop the reasent dramatic inflation of oil benifite from it. and whos left to suffer. the middle and lower class.
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Dag Andersen 8:24AM (5/20/2008)
Just to inform all Americans that complain about the high gas prices. You live in a country with EXSTREMELY CHEAP GAS. You pay from 3,5-3,8$US for a gallon of gas. In Norway we pay about 8,5-9$US pr. gallon.
I would say to you Americans: "ENJOY ONE OF THE CHEAPEST GAS PRICES IN THE WORLD!"
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Tim 4:44PM (5/31/2007)
Like the frog who won't jump out of a slowly heating pan of water, we're being slowly boiled in oil. We won't move until it's too late. Humm... Is that chicken or pork I smell?
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David Every 8:39AM (6/01/2007)
The rationale is that much of the rest of the world abuses their masses with over-taxation, over-regulation and misuse of the revenues (poor roads/parking), which has driven the costs of trasportation and gasoline to double the U.S., and reduced car ownership, home ownership and quality of life to a fraction of the U.S. So why aren't we trying to be more like them? Let's be more like Europe with double the unemployment and a fraction the opportunity/growth. Or like Asian countries with a suicide rate thats many times what it is in the U.S. Cause and effect people.
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Val 9:23AM (6/01/2007)
Ah, yes, eastern europe, quality of life there is definitely a fraction of what it is in US, this great country that can spend 1000 zillion $ to impose dimocracy on the poor and stupid, but lacks the money to rebuild its cities after Kathrina... Have you ever been in a big european city, i have, and there are plenty of parking lots (ok, not everywhere, in London the Center is crowded and they have congestion charges, but anyway). And last i checked, Germany, Holland, Belgium, Luxemburg have excellent highways, well maintained and marked. Oh, and appart from the Rover factories, no major manufacturer has closed any recently due to a catastrophic drop in sales... You go figure
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Rick 9:55AM (6/01/2007)
Yes, consumer are adjusting 'nicely' to outrageous gas prices by NOT SPENDING IN OTHER PLACES! These type of propaganda-ish articles kill me. We are at the heals of inflation, recession, a collapsed housing market, consumer index is up, and resellers are feeling the pinch. Especially the lower class and Walmart type discount retailers.
So yea, we adjusted to the additional $40+ a month for gas by not having the additional $40+ a month to spend at restaurants, movie theaters, retailers, etc.
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David Every 11:00AM (6/01/2007)
Val, the point is that middle class Europeans have a lower protien diet, live in about 1/2 the square footage, and have less actual income (when adjusted for taxes, etc.), lower ownership of cars, than Americas bottom quintile (poorest 20%). They have double the unemployment, less growth, less opportunity. Yes, they have freeways -- but many of the cities have incredibly poor roads and attrocious traffic (because of that); even with FAR lower car ownership per capita.
As for why Americans have issues with their cars, you only need to look at autounions. BMW, Mercedes, Toyota, Honda, etc., all make highly profitable cars in the U.S. -- because they don't have the UAW, and don't make them in Michigan. (The cost per car for the UAW is estimated to be between $5000 - $10,000 handicap, that's not counting policy altering requirements like the ghost-workforce that automakers have to pay for, or higher depreciation caused by having to sell excess capacity to rental fleets which dump their 1 year old cars, etc.).
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