Sales holding up. This time, Detroit is ready for high Gas prices

May 19, 2011

From the Detroit News:

Soaring gas prices in 2008 helped cripple Detroit’s automakers, but there’s a different vibe in the industry today, even though gas prices are volatile and hovering around $4 a gallon.

Motorists aren’t pushing the panic button, and neither are automakers. Owners of gas-guzzling trucks and SUVs, who rushed to unload them three years ago, are taking a wait-and-see attitude. Shoppers in the market for a new car or truck aren’t delaying purchases, but shifting to smaller or more fuel-efficient vehicles — many of them from domestic brands…

As a result, demand is holding up — 20 percent stronger this year, compared to last — as the industry’s fragile recovery continues. U.S. car and truck sales are expected to reach 13 million vehicles this year, comparable to 2008 but well above 2009’s 10.4 million tally.

When gas hit a national high of $4.06 per gallon in 2008, consumers’ love affair with big vehicles ended abruptly. Ford Motor Co., General Motors Co. and Chrysler Group LLC felt the sting worse than foreign rivals because they were more dependent on large fuel-thirsty but highly profitable vehicles.

The story quotes car dealers saying that smaller, fuel efficient cars are selling “..right off the convoy trucks.” One dealer in Ann Arbor  said he “can’t get enough” Fiestas and Focuses. “I wish we had twice as many.”

GM announced in the face of 4 dollar plus gas, it is boosting production of Chevrolet Volts – in the face of  “tremendous consumer demand..”

Detroit News continues:

General Motors Co. plans to boost production for its range-extending electric car, the Chevrolet Volt, to 16,000 vehicles this year, and 60,000 in 2012, the company said today.

The Detroit carmaker had originally planned to build 15,000 Volts this year, and 45,000 in 2012, but strong demand for the battery-powered car has prompted the company to churn out more.

7 Responses to “Sales holding up. This time, Detroit is ready for high Gas prices”

  1. otter17 Says:

    If we are very lucky, peak oil will keep manufacturers focused on efficiency and foster a transfer to a renewable energy society.

    In light of that leaked German peak oil study (and the Hirsch report, etc), I don’t think we ought to count on being lucky.

  2. epicurwin Says:

    Introducing our new form of heroin. Now less bad for you!

    When will people see that gas is not the drug, cars are. Gas is the syringe of the car. Get rid of gas and your still getting high somehow.

    • greenman3610 Says:

      Yes, totally got it.
      I’m all for an Apollo program to build mass transit in the US. But that is a generational project. If by some miracle we were able to become as good at transit as the Europeans in say, 20 years, we would STILL have to deal with automobiles. And we don’t have 20 years. We have to start pulling away from fossil fuels now, integrate electric and hybrid cars into the grid, and pump the existing momentum for light rail and bullet trains.
      There is no utopia where we go instantly to perfect mass transit.

    • otter17 Says:

      In the USA, I wonder if we would have to start repainting more of our highway infrastructure with bus lanes in order to deter personal automobile use. If public transportation is fostered to grow and achieves much higher penetration, then there will be the temptation to use the increasingly lower-traffic roadway infrastructure.

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