SUVs And Light Trucks Make Comeback

Cheap gas, great deals, and winter weather resulted in SUV and light trucks resuming their dominance in vehicle sales in December, climbing to 51% of all sales, as Prius sales dipped 48% in November.

[Correspondent's Note: An earlier edition of this article inspired NYT Columnist Tom Friedman to write "the second biggest decision Barack Obama has to make - the first is deciding the size of the stimulus - is whether to increase the federal gasoline tax or impose an economy-wide carbon taxon the urgency of raising gas taxes"]

"Trucks and SUVs will outsell cars in December (composing 51% of sales), according to researchers at the automotive Website, something that hasn't happened since February.

Meanwhile, the forecast finds that sales of hybrid vehicles are expected to be way down."

"Despite all the public discussion of fuel efficiency, SUVs and trucks are the industry's biggest sellers right now as a remarkable number of buyers seem to be compelled by three factors:
• great deals,
• low gas prices and
• winter weather," commented Michelle Krebs, Senior Editor of Edmunds'"

"The term 'SUV', in this case, includes only truck-based vehicles like the Ford Explorer... not car-based crossover vehicles like the Ford Escape. Truck-based SUVs have a separate frame and they are designed for heavier hauling and towing. They generally weigh more and have lower fuel economy than crossover vehicles."

In November, Prius sales were already down 48% compared to the same month in 2007. Prius prices are also expected to be much lower, said sales analyst Jesse Topraks."

Thanks to Thomas Friedman

Full Story: With gas falling, trucks come back



Irvin Dawid's picture

Hybrid Bike sales decline as do Hybrid Cars

No joke here.
"Business (in bike stores) skyrocketed last summer along with gasoline prices.... especially sales of hybrid bikes that can be used for recreation and transportation...But the economy has continued to spiral downward, taking bicycle sales and much else with it....Declining gas prices are one reason." [NYT: A Surge in Bicyclists Appears to Be Waiting, Dec. 31, 2008.
Irvin Dawid, Palo Alto, CA

Irvin Dawid's picture

FT: Hybrid Car Sales Plummet, 1/2/09

Another reason to set a price 'floor' for oil? ($85/barrel = $3.00/gallon).

"Sales of most hybrid models have dropped sharply. Demand for Toyota's Prius hatchback, the top-selling hybrid, fell by almost half in November from a year earlier. The Camry sedan was down 57 per cent; the Ford Escape crossover 35 per cent.

George Pipas, Ford sales analyst, said: "The lower gas prices are, the tougher the proposition is to pay a premium for a hybrid engine."

Hybrid vehicles typically cost $3,000-$5,000 more than their petrol equivalents.

Toyota has used up tax credits available for hybrids, and several other manufacturers are close to their limit. estimates that a Prius owner must wait more than eight years to recoup the extra cost of the vehicle in fuel savings, compared with three-and-a-half years when the petrol price climbed above $4 a gallon in the spring. The average price is now about $1.61."

Irvin Dawid, Palo Alto, CA

Irvin Dawid's picture

A Word from the Detroit Auto Show: Hybrids Not A Good Buy!

From an AP article reporting that while Detroit and international auto makers are anxious to show off their new, green cars, low gas prices make them a poor consumer decision. Thus, the auto companies must be certain these low prices are only temporary.....

Of course, the President-elect Obama could ensure that consumers will look more positively on buying fuel-efficient vehicles with a simple gas tax - revenue neutral or otherwise, or implementing an 'oil floor' ensuring that gas prices don't drop below a certain level.

Alas, the government appears to prefer bailing out Detroit, and giving them grants to 'go green'. This is what happens, I think, when politicians rule rather than economists!

Irvin Dawid, Palo Alto, CA

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