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Transportation Earth The Almighty Buck

The SUV Is Dethroned 1234

Posted by kdawson
from the four-dollar-stake-through-the-engine dept.
Wired's Autopia blog documents what we all knew was coming: rising gas prices have killed off the SUV. Auto industry watchers had predicted that the gas guzzlers in the "light truck" category would lose the ascendancy by 2010; no one expected their reign to end in a month, in the spring of 2008. Toyota, GM, Ford, and now Nissan have announced they will scale back truck and SUV production and ramp up that of smaller passenger cars. Of course there will always be a market for this class of vehicle, but its days on the top of the sales charts are done. "'All of our previous assumptions on the full-size pickup truck segment are off the table,' Bob Carter, Toyota division sales chief said last week during a conference call with reporters. Translation — we have no idea how low they'll go."
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The SUV Is Dethroned

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  • Good riddance! (Score:5, Insightful)

    by jawtheshark (198669) * <(moc.krahsehtwaj) (ta) (todhsals)> on Tuesday June 10, 2008 @01:37AM (#23720543) Homepage Journal

    Still, I have to see it to believe it. The current generation of SUVs will inevitable end up in the hands of young drivers. Those will be even less aware of the extra dangers a SUV presents while being in traffic. The SUV craze will have a significant impact for the years to come.

    I urge anyone who owns an SUV and/or considers buying one to read "Big And Bad" by Malcolm Gladwel [gladwell.com].

    • Re:Good riddance! (Score:5, Insightful)

      by Whiney Mac Fanboy (963289) * <whineymacfanboy@gmail.com> on Tuesday June 10, 2008 @01:42AM (#23720569) Homepage Journal
      The current generation of SUVs will inevitable end up in the hands of young drivers. Those will be even less aware of the extra dangers a SUV presents while being in traffic.

      Fortunately, these young people will not be able to afford to drive these out of their driveway.

      Any SUV owners reading this? Look forward to watching the second hand sale value of your vehicle plummet even while fuel costs rise to the point where you can no longer afford to drive your (now) useless vehicle.

      Don't like it? Bad luck. You can't say you weren't warned.
      • Re:Good riddance! (Score:5, Insightful)

        by mark72005 (1233572) on Tuesday June 10, 2008 @02:17AM (#23720841)
        I own a Jeep. Gas mileage is pretty bad but it's paid off so I don't mind too much.

        I'd like to drive a hybrid, but the premium is too high for it to make sense. I would consider trading off for a 4cyl car, but again, mine is paid off. Suppose I'll drive it until it dies.

        And heck, gas would need to get a lot higher than it is for it to be worth financing another car when you factor in a monthly payment.
      • Re:Good riddance! (Score:5, Insightful)

        by darkgreen (599556) on Tuesday June 10, 2008 @02:22AM (#23720873) Homepage
        I'd like for you to be right, but the reality of it is that people will always pay for what they think is important. In this case, the idea of an SUV is very important to a lot of people.

        The importance is, for most owners, a necessary expense. The SUV is essentially a face-saving minivan. Guys and girls who wake up one day realizing that they have 2.5 children and a hockey game or ballerina class to chauffeur around on saturday mornings need to feel like they haven't yet abandoned their youthful carefree lifestyle.

        The SUV is a way to convince themselves that they are something they're not.

        For the record, I don't think there's anything wrong with ending up with the kids and white picket fence. I think it's a problem when you try and ignore or cover it with your choice of vehicle.
        • by sporkme (983186) * on Tuesday June 10, 2008 @04:53AM (#23721851) Homepage
          There is more to it for a handful of us. I commute in a 1996 2WD Ford F150 inline-6 300. It is a nice compromise for me as a daily driver because the inline-six gets pretty good mileage yet retains MASSIVE torque for towing and hauling. As a helpful person, I almost always stop for stranded people for problems ranging from flat tires to mud or snow entrapment. I keep rope, straps and chains as well as a jack and a set of tools in my truck. My in-laws laugh at me because I have a rotating orange strobe light mounted on it, but I would rather be laughed at then ironed out on the highway. Also, people automatically assume that you are important and/or belong when you have a flashing light on your truck. Cops wave you through and people pull over to let you by.

          Friends and family that own gas-sipping little munchkin cars are constantly enlisting my services as a man who owns a functional truck. Whether they are moving, cleaning out a basement or hauling a load of firewood, they all know who to call... the man with the truck.

          I also own a 1979 Ford Bronco with a 351m bored over 20 with a 850CFM Holley Truck Avenger carburetor, snorkel and smokestack sitting on DANA-60's, 36" SuperSwampers and air-auto-lockers, lifted etc., rigged for both plow and tow. It gets about six miles to the gallon. The floorboards are above the average knee, and if I am careful, I can drive it pretty much anywhere (got to watch out for little efficient cars). It is mainly a toy, A MONSTER TRUCK!1!11!!, but once again, it has special abilities that are needed:

          We have had A LOT of HORRIBLE FLOODING here in Indiana, surpassing our record from 1913. DHS, National Guard, Marines, Coast Guard and every available resource have been chucked into the disaster maelstrom that is flooded Indiana. The nearest competition for my Bronco is a fire truck or a Caterpillar when it comes to submerged mobility. That big fat bastard gleefully contributed to global warming all the way down to Franklin, to Martinsville, and to rural points south as we teamed up to get people out of the water. Nobody can see your carbon footprint under five feet of water, septic runoff and synthetic flotsam. None of the people in the little bed of the bronco seemed to mind the CO2 streaming from my exhaust stack.

          Everybody hates a truck owner, until:
          (a) it snows a lot
          (b) it floods
          (c) they are moving
          (d) they drive into a ditch
          (e) they need a truck but only have a little munchkin car

          My father also uses his powers and torques for good in his 2004 Chevrolet Tahoe. He was down there with me, in the muck, but his new-fangled electronics cannot withstand submergence. His next purchase will he the Tahoe Hybrid, which outperforms its predecessor in torque and horsepower. These new trucks cannot replace their predecessors, though, because they are too complex and fragile.

          That said, any 4WD owner that does not use his extraordinary capability as part of the solution--is part of the problem. Soccer moms must die.

          Some of the rudest drivers I have ever encountered were in munchkin hybrids. The rest of them were women driving SUVs.
          • by Ihlosi (895663) on Tuesday June 10, 2008 @07:20AM (#23722921)
            (a) it snows a lot



            Road service is pretty much up to the job where I live. Oops, I forgot ... taxes baaaaad, truck gooood.



            (b) it floods



            I'd rather have a boat than a truck in that case. Or a hovercraft.



            (c) they are moving



            Last time I moved, I rented a truck. I mean, a _real_ truck (7.5 ton). I only needed it for a day.



            (d) they drive into a ditch



            I usually don't. My dad does that a lot, but then again, he's got a 4WD and thinks he won't get stuck. He usually needs to call someone with a fscking tractor to pull him out, though.



            (e) they need a truck but only have a little munchkin car



            See (c). When I need a truck, I rent one. That's easy with all the money I save by not owning a truck. Heck, I even have money left over.

          • by jollyreaper (513215) on Tuesday June 10, 2008 @09:05AM (#23724055)

            Everybody hates a truck owner, until:
            (a) it snows a lot
            (b) it floods
            (c) they are moving
            (d) they drive into a ditch
            (e) they need a truck but only have a little munchkin car
            There's a huge difference between an SUV and a truck. Trucks can do all those things you mention. About the only thing SUV's can do well are things already done more efficiently by minivans -- hauling people and bulky shit. But SUV's can't do that offroad shit you're talking about, going through floods, etc. They're built for the appearance of ruggedness, the same as a ricer tries to make his car look fast with big mufflers, gratuitous spoilers, and R-Type stickers.

            I'm a firm believer in using the right tool for the right job. You have to haul shit, you use your truck for work? God bless you, you're using the tool properly. You use a tricked out F-350 dually for a daily commuter vehicle? Baby Jesus himself is going to come around and spit at you.

            Most people don't need trucks and SUV's are really not practical for anyone. Hell, the original hummer was good at what it was, a serious offroad vehicle. Doesn't work as well as a combat vehicle but hey, it wasn't designed for that. The new hummers are just stupid because they're designed to look tough but can't keep up with what the original hummers could do. Dumb!

            Right now, I'm driving a roller-skate, one of those Toyota Yarii. Very nice. Good fuel economy, great price, huuuuuge carrying capacity for a little ol' hatchback. If I had to move a house, I'd rent a truck or buy a friend with a truck a case of beer. But I don't need one 99.5% of the time so why have one?
      • Re:Good riddance! (Score:5, Informative)

        by jeroenb (125404) on Tuesday June 10, 2008 @03:00AM (#23721109) Homepage

        Fortunately, these young people will not be able to afford to drive these out of their driveway.
        Why not? A gallon of gas costs EU 6.24 here in The Netherlands (which is $9.73) and while SUVs were never that popular here (and their popularity is declining) I still see quite a few of them every day.
    • Over the last ten years cars have gotten so big, normal people can't ride their bikes on the same roads. A $5/gallon diet seems to be curing the problem.

      The SUV is the end result of American car maker plans from the late 1960s. In order to keep their growth they had to sell larger, ever more expensive cars. The gas crisis of the mid 70s and air polution studies only partly derailed those plans. Regulation helped a lot. 20 years of cheap gas followed by corrupt government and import restrictions gave

  • by compumike (454538) on Tuesday June 10, 2008 @01:42AM (#23720573) Homepage
    Not via regulation or per-category taxes that artificially manipulate, but by consumers adjusting their buying habits as costs change. If SUVs are too expensive to own, people will stop buying them and trade to more fuel-efficient vehicles. Is that really too crazy to ask?

    Also interesting to see whether the trend of people sensing safety while in those large vehicles will continue... Not so easy to go back to sedans while there are so many dangerous SUVs (tanks) out there on the roads, eh?

    --
    Hey code monkey... learn electronics! [nerdkits.com]
    • by tronbradia (961235) on Tuesday June 10, 2008 @02:27AM (#23720903)

      Not via regulation or per-category taxes that artificially manipulate, but by consumers adjusting their buying habits as costs change.
      The problem with your idealization of market capitalsm is the problem that gas-guzzling and dangerous SUV's create externalities in terms of environmental destruction, dependence on foreign oil, and injury to others on the road, which the buyers don't pay for. Except for the latter which might be paid for in insurance costs, none of these elements factor into the price or operation of the vehicle. They weren't then and they're not now.

      I get suspicious too when I hear about targeted taxes and subsidies. It's dangerous ground on which to tread. I always hope for economically sensible policies, and of course am usually disappointed. But reasonable policies that take advantage of natural market forces by making users pay for their externalities do have a place.
    • Re: (Score:3, Insightful)

      by Ed Avis (5917)
      Yes - as long as the cost you pay for gasoline is the true cost, including externalities like its effect on the environment. Which will be a bit higher than just the cost of getting it out of the ground.
    • Re: (Score:3, Insightful)

      by LarsWestergren (9033)
      This is how economics is supposed to work! Not via regulation or per-category taxes that artificially manipulate, but by consumers adjusting their buying habits as costs change.

      But the OPEC countries do a lot of artificial manipulation of oil prices in the first place, so this isn't pure market either.

      I think scenestar and tronbradia above debunked the rest of your arguments pretty well.
    • by remmelt (837671)
      Where does the environment fit in? All that burned gas produces a lot of CO2. CO2 is bad, but not immediately so. Your free market won't save you or your kids from cancer.

      In a perfect world, the free market is a pretty good idea. In a world where most of the inhabitants are irresponsible, arrogant and self-centered assholes, it just doesn't work that well.
    • by Cpt. Fwiffo (42356) on Tuesday June 10, 2008 @04:50AM (#23721829)

      Not via regulation or per-category taxes that artificially manipulate, but by consumers adjusting their buying habits as costs change.
      I think you're forgetting that taxing is a way to adjust to the real price. Roads need to be twice as big, and thrice as strong as a SUV is much bigger and much heavier then a normal car. And it pollutes more.
      So...
      * tax oil appropriately for the pollution it causes.
      * tax the car for the pollution its creation causes
      * pretax the car for the pollution its destruction/demanufacture will create
      * tax the cars usage of the roads (both by space it takes and damage/stress it deals to the road)

      (gawd, I should get a job at the government... the moneyz... Teh moneyz!!)
  • by timmarhy (659436) on Tuesday June 10, 2008 @01:42AM (#23720575)
    you can keep your prius and save enough gas so i can continue to run over baby seals with my H2.
  • by jfern (115937) on Tuesday June 10, 2008 @01:43AM (#23720579)
    In having 2 Texas oil men (Bush & Cheney) running this country.
  • Stupid Ford (Score:4, Insightful)

    by plover (150551) * on Tuesday June 10, 2008 @01:45AM (#23720589) Homepage Journal
    For the past several years, they've been busy killing off their Ranger line of small trucks in favor of of the F-150 line of "giant trucks that don't fit in my garage."

    I use my Ranger mostly as a commuter vehicle, but we need a truck for weekend projects like landscaping and hauling stuff. I'd never even consider commuting with a gas guzzler like an F-150.

    I hope they figure this out before they close their last Ranger lines down.

    • Re:Stupid Ford (Score:5, Interesting)

      by confused one (671304) on Tuesday June 10, 2008 @01:59AM (#23720725)
      Ford's not the only one, Dodge was doing it too. It's a cost cutting measure: Why make two models of trucks when the market really only supports one. If you have to make a choice, you keep the bigger one that meets the requirements of the commercial market. I suppose you could argue that they should keep the smaller one and kill the F-150. Then commercial users could be steered to the F250 and F350. However, sales numbers on the F-150 were MUCH stronger than those of the Ranger. Same argument applies to the Dodge Ram 1500 and the Dodge Dakota. GM's volume is higher on the Chevy S-10; and, it's made in a joint GM / Isuzu plant anyway; so, it impacts GM less.
    • Re: (Score:3, Insightful)

      by ryanov (193048)
      Every weekend? I'm not arguing with you, I just heard an interesting point on NPR's CarTalk I believe it was. Someone called in asking about a pickup and the guys asked him what he was going to use it for. He said, well, commuting mostly, but I want to haul things sometimes. The guys asked, why not buy a commuter vehicle and occasionally rent a truck? It wouldn't come out cheaper for everyone (and if the Ranger does get as good mileage as a similar small car, then it doesn't really matter), but for most I
  • by Anonymous Coward on Tuesday June 10, 2008 @01:45AM (#23720591)
    Trucks and SUVs should have been the first vehicles to realize the slow gains of hybrid technologies. Who wouldn't want the extra torque in a vehicle sold on it's ability to tow? Would wouldn't want the ability to produce electricty on demand with optional factory inverter in a machine sold on it's ability work anywhere, play anywhere? And who wouldn't want to pay less at the pump thanks to a smart engine which turns off cylinders it doesn't need given the task at hand. The car companies, particularly American ones, didn't understand what wealth is, and didn't try to return it to their customers. At least the Japanese companies have the excuse of not understanding the peculiarities of the American lifestyle, and had to chase down a once booming economic segment of their market.

    That the car manufactures executives don't owe shareholders money, much less recieve compensation at all, is an afront to anyone who's ever put in 15 minutes of honest work in their life.
    • by WindBourne (631190) on Tuesday June 10, 2008 @02:00AM (#23720735) Journal
      Yeah, I said the same thing down below. What is really sad about this, is that American companies COULD take the lead, but they will not. This idea will be realized by either tesla or one of the japanese companies. My guess is that Nissan will do it. The reason is that they will realize that these trucks NEED to continue. Sadly, this is a great opportunity for a start-up business. Build the frame, use some of the standard motors on each drive shafts, a standard engine/generator, a small amount of li-ion batts and then a cabin. The back end could be a delivery truck, a standard flat bed, a regular truck bed, a camper, a bus, etc. This is actually a golden time for small start-ups. Heck, if smart, they would hook up with musk as he has the bulk of it; just focus on frame and cabin.
  • Trikes (Score:4, Interesting)

    by DigiShaman (671371) on Tuesday June 10, 2008 @01:45AM (#23720597) Homepage
    I can't seem to remember where I found them, but I remember seeing a "trike" with two wheels in front and one behind. It was basically a motorcycle with a personal cabin that was AC cooled. Not bad looking.

    I wouldn't mind driving one of those for my daily commute.
  • by WindBourne (631190) on Tuesday June 10, 2008 @01:52AM (#23720659) Journal
    All these companies have to do is change them over to a serial hybrid esp for trucks. The reason is that the serial hybrid is perfect for working as a generator. A construction worker can drive to the job site and then use their batteries/hybrid as power for the job sites.

    My guess is that one of these companies will get smart and soon deliver just this. It should have enough batteries to last at least 10-20 miles and 2 small generator-motors. The reason for 2 is that the likelihood of 2 motors dying are slim. And only one would be needed to cruise a truck with load. From a business POV, it would make sense to buy these if they could reduce their delivery costs or have dual use on them. From the automakers POV, the 2 small generators-motors may be the exact type that is going in their cars. IOW, fewer number of unique parts. Heck, the truck could use 2 motors identical from 1 taken from a car hybrid.
  • Dude! (Score:5, Insightful)

    by RyanFenton (230700) on Tuesday June 10, 2008 @01:52AM (#23720661)
    Destruction derbies are going to be so awesome in a couple months time, once value of the bigger SUVs drops to scrap value. They still have those things, don't they? I always saw them advertised on TV when I lived in Alabama in the 80's.

    Ryan Fenton
  • by freeweed (309734) on Tuesday June 10, 2008 @01:55AM (#23720685)
    I never realized that I was psychic, but how could Detroit not have seen this coming?

    Up here in the Great White North it's been a constant barrage of news stories: truck plants closing unexpectedly in Ontario, tens of thousands out of work. Apparently neither GM nor Ford actually anticipated a) fuel prices rising this high and b) consumers actually (gasp!) shopping for fuel economy as a result. Almost as if the 1970s never happened.

    The other interesting thing is that hybrids are just about sold out entirely in western Canada. Months long waiting lists. Not so surprising, as I'm sure the auto industry never produced *that* many compared to regular cars. What is surprising is that Honda Civics are also sold out all over the place.

    All of this followed by nightly news stories of these poor SUV drivers who are scrambling to replace their vehicles - only to discover the resale is next to nothing (I heard a report claiming used SUV prices are down 30% in the past month or two alone), and smaller vehicles are getting hard to find. Again, DUH. Economists, the oil industry - damn near everyone has been predicting this for YEARS. Everyone except the auto industry. I hope Ford and GM go bankrupt for their shortsightedness.
    • by QuasiEvil (74356) on Tuesday June 10, 2008 @02:23AM (#23720877)
      No kidding. *I* saw this coming years ago (read: 2003), and dumped my two Suburbans while they were still worth something on the used market. I kept my pickup until early last year, when I "gave" it to my ex as part of the settlement. She can't afford to sell it, and can't afford to fill it. Yeah, I'm still grinning ear-to-ear on that one. Book values were still high in early 2007...

      Now I drive my 15 year old Civic most days, and I have my CR-V for those times that I need AWD / greater clearance / etc.

      The real answer is that the American auto companies got complacent and lazy while the trucks were selling well. They made a ton of profits, built generally good products (my GM truck was about the most reliable thing I've ever owned, considering the rough service life it saw) and ignored R&D for the inevitable price spike in fuel. They're getting exactly what they deserve - years of profit-taking with little investment in innovation, and the market is now crushing them. Market forces at work, folks.
    • by Technician (215283) on Tuesday June 10, 2008 @03:28AM (#23721281)
      Some consumers did see this. I drive an 02 Prius. Many laughed when I bought it because I would need to replace the battery for 5 grand in 5 years, I spent an extra 5 grand to buy the car etc.

      I bought it for my commute. I bought it for the reliability. I bought it for low maitenance costs.

      In 100,000 miles, my average gas cost is about $2.00/gallon. My old car got 22 MPG. My new car gets 46 MPG.
      The fuel cost savings can be figured out by the cost per mile for the 100,000 miles driven.

      At 22 MPG 100,000 miles used 4,545 gallons.
      At 46 MPG 100,000 miles used 2,222 gallons.
      It saved 2,323 gallons or $4646 in fuel cost.

      My next 100,000 miles will be more dramatic.

      The battery unlike a cell phone or laptop battery is rarely fully charged and never run flat. Battery life is not an issue. Repairs have been nil. High failure items for the most part are eliminated. The power steering is electric, not hydraulic. The mechanical portion of the transmission has a total of 7 moving parts. None of them shift, slide, or are hydraulic. Regenerative braking showed up as a benifit when I changed tires at 80,000 miles. I had 80% of the brakes remaining, unlike my wife's car which is on it's second set of brakes.

      Oh, if I need a new battery, the 36 7.2 volt modules can be changed as needed instead of buying an entire new pack. If I need a pack, it's no longer 5 grand. It's much less.

      At current gas prices, I plan on keeping the car till the wheels fall off.
      • by c.r.o.c.o (123083) on Tuesday June 10, 2008 @04:26AM (#23721671)
        I agree that the Prius offers HUGE fuel savings when compared to an SUV. But did you know that a VW Gold TDi has exactly the same(or better on longer commutes) fuel consumption? And Honda is introducing a full line-up of diesel engines in their cars for 09?

        What truly turned me off the Prius however was the way it feels as a car. It's really about as much fun as driving a dishwasher. I really wanted to like the Prius, but I can't.
        • by Technician (215283) on Tuesday June 10, 2008 @04:44AM (#23721775)
          What truly turned me off the Prius however was the way it feels as a car. It's really about as much fun as driving a dishwasher. I really wanted to like the Prius, but I can't.

          Some of the way it feels as a car is why I like it. The traction control is very good. Even though it isn't 4WD, it goes quite well in bad weather. With the electric motors in the transmission, the traction control works like anti-lock brakes in reverse. If you are into doing power doughnuts, a Prius won't do it. I know, I tried just to test it on wet grass. Cranking the wheel over and flooring it on wet grass is pretty boring. On ice, it keeps traction and pulls ahead instead of just spinning wheels. I was impressed.

          If I want fun, I'll fire up the quad.
      • by mk2mark (1144731) on Tuesday June 10, 2008 @06:23AM (#23722383) Homepage
        A toyota pious might seem like a good idea, but 46mpg is deadfully low for such a compromised hybrid - 20 year old diesels will happily do that all day.

        The other thing about them is that they cost a fortune to make, both in money and energy. Here in Ireland at least the only reason they're affordable is down to the tax breaks you get for being "environmentally friendly".

        Electric hybrids are (at the minute at least) a feel good car. Be it a pious or those completely pointless lexus v8's. The way the market is really heading is towards lighter and more aerodynamic cars with real world effective energy saving measures like BMW's stop-start technolodgy, and regenerative braking. About time cars got lighter too if you're asking me.
  • Not surprised (Score:5, Informative)

    by phalse phace (454635) on Tuesday June 10, 2008 @02:01AM (#23720741)
    I'm not surprised. For the month of May '08, the Honda Civic dethroned the Ford F-150 [autoblog.com] as the best selling U.S. vehicle. The F-150 was the best selling vehicle in the U.S. for the past 17 years.

    Ford saw it's SUV and truck sales drop a whopping 44% last month. That's huge.
  • by pembo13 (770295) on Tuesday June 10, 2008 @02:08AM (#23720793) Homepage
    What's the point of an SUV to drive through the city? That's like buying a sports car to drive a few blocks in a crowded city. The machine (SUV) was built for the purpose of being a sports utility vehicle. If you need large passenger seating, there are minivans. If you need to haul load, there are trucks. If your commuting, there are sedans and compacts.
    • by Mr2001 (90979) on Tuesday June 10, 2008 @02:46AM (#23721019) Homepage Journal

      The machine (SUV) was built for the purpose of being a sports utility vehicle. If you need large passenger seating, there are minivans. If you need to haul load, there are trucks. If your commuting, there are sedans and compacts.
      An SUV can do all those things - but none of them very well. It's more of a Spork Utility Vehicle.
    • Re: (Score:3, Insightful)

      by pclminion (145572)

      If you need large passenger seating, there are minivans.

      There is a better solution for "large passenger seating" (that could be parsed in an alternate, amusing way): it's called a "bus" or a "train."

    • Well, I live in Highlands ranch, CO but need to transport at times 7 ppl, or 4 ppl and 3 dogs. In addition, need to be able to drive nicely in the snow and up in mountains. And I do need to haul large loads around as well as doing a bit of trailering. And we do not want to have several cars as it will mean more in costs than 1 car and rental is out of the question. Exactly what do you recommend?
  • by fpp (614761) on Tuesday June 10, 2008 @02:15AM (#23720835)
    ...which is why they spent so much money in the 1990's developing the hybrid, when all the other car manufacturers thought they were nuts. There's a lot to be said for long-term thinking, which is partially why they are mopping the floor with the detroit automakers in so many areas.
  • by tie_guy_matt (176397) on Tuesday June 10, 2008 @02:27AM (#23720907)
    In the long run gas prices can do nothing but rise; that is unless and until we find a better replacement. Eventually we will reach peak oil and prices will increase and increase because demand will still be going up but all of a sudden supply starts going down. We will reach peak oil probably in my lifetime and there are people who predict that we have reached it already (no one really knows how much oil is in the ground.)

    I guess I am worried that the current high price may in part be due to people speculating that we have reached peak oil (or that at least supply can no longer match demand.) If people buy oil futures in speculation of an oil shock that may not be as big as expected then prices will fall again.

    If prices fall then people might go back to old habits and then when they rise again people might just expect prices to drop again like it did in 2008.

    I guess I am hoping for a nice steady rise so we can switch to renewable sources as quickly as and painlessly as possible. Of course if we were to pass regulation to encourage a switch to a better energy source before we reach peak oil then we would make the transition a lot less painfully than we would if we just wait for peak oil and then let the market force the change. Yes the free market will make sure that eventually we will all be using renewable resources. The only question is what will the economy be like by then? Will we have a middle class at all at that point? The sooner we get to work ending the oil age and going on to something better then the better off we will all be in the long run.
    • Re: (Score:3, Insightful)

      by servies (301423)
      Believe me, prices won't drop and if they drop it will be just very temporary.
      In 2002 the Netherlands (and some more) switched to the Euro. 1 liter of Euro95 at that moment costed us about 1 Euro. At this moment the price is round 1.6 Euro. In the last year prices went up with about 15 cents and they're expected to rise another 30 to 40 cents this year.
      And yes, you're reading it right. In the Netherlands a gallon of Euro95 would cost you 6 Euro, that's allmost $10 a gallon...
  • by Pichu0102 (916292) <pichu0102@gmail.com> on Tuesday June 10, 2008 @02:40AM (#23720983) Homepage Journal
    Has Netcraft confirmed this yet?
  • by ChangeOnInstall (589099) on Tuesday June 10, 2008 @03:23AM (#23721255)
    I find the economics of this sudden SUV abandonment to be completely absurd. First of all, no one wants them. Second, everyone who has one suddenly wants out of it. So the economic answer is of course that the bottom falls out and they sell for pennies on the dollar.

    Very few people are actually doing the math.

    One thing that is important to understand: GM, Ford, and Chrysler have been selling these things with 0% financing and allowing 0% down for some time now. As a buyer, taking this offer is a good idea, even if you can afford to pay cash. Most people can't though, and the financing is the only thing that allows them to afford the vehicle.

    As we all know, any new car depreciates the moment you drive it off the lot. So everyone taking these 0%/0-down deals is upside-down on their vehicle on day one. (Whereas someone with a "traditional" car loan where 20% of the money or so was used as a down payment would still be right-side-up on day one).

    Now you have the current energy crisis on top of it, and a sudden spike of 30% in gas prices has eroded another 30% of equity for a guy who wasn't right-side-up to begin with.

    Small cars are hot now, and they're in shorter supply. So manufacturers don't need to offer 0% loans on them.

    So here's what the idiots do: sell the SUV at any price, get a smaller car. Eat the negative equity. Go from a 0% loan into a 6% loan.

    Example:

    You have a 2007 Chevy Tahoe. It gets 17mpg city/highway combined according to the new 2008 EPA numbers. 1 year old, 0% loan on $40,000 for 5 years. You've paid back $8,000, owe $32,000. It's worth $20,000 on the market if you're lucky. $12,000 in negative equity there.

    Buy a 2008 Honda Accord, 4 cylinder. EPA combined mileage = 24mpg.

    According to the fueleconomy.gov site, the Tahoe will cost $3475/year @ 15k miles per year. The Accord will be $2464/year. So it will take roughly TWELVE YEARS or 180,000 miles to overcome the negative equity alone. Heaven forbid we include sales tax and depreciation on the new vehicle into the equation.

    Even if you bought a Prius (46mpg, $1282/yr) it'd take 65k miles, or 5.5 years, to make up the difference.

    Moral of the story: keep the gas guzzler.

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