[HoosierRon]

Ford figures it out: $3.50 gallons of gas is where consumers drew the line

Automotive News (subs req'd) reports that Ford CEO Alan Mulally spoke last night to automotive reporters and revealed that his company's internal sales data from early May (combined with earlier reports) shows that the move toward smaller vehicles "is more dramatic and permanent than previously projected," in AN's words. Mulally said that the $3.50 level was when buying shifts "really started to move." Ford's U.S. pickup sales numbers dropped from 14.1 percent of its retail sales in 2007 to 13 percent in early 2008 to 11 percent in April to just 9 percent so far in May. SUV sales dropped as well (from 8.4 to 6.8 to 5.2 to 4.4 percent in the same time frames).

If this is the new frontier of the American auto industry, I would maintain the position that while the Volt and Beat are good attention getters, what GM really needs are a flex fuel 1.4L direct injection turbo, BAS+ and a 6 speed transmission in every small and mid-sized car. Yes, there is a place for "personal statement" cars, but most Americans want practicality and efficiency above all (just look at the Camry).

Selling 30,000 Volts a year is nice. But taking 100,000 sales away from Toyota as people shift from a 25 mpg Camry to a 40 mpg Malibu is much better.

 

[MCGARRETT]

Good Point.


The Malibu would need to undergo some weight reduction too, more aluminum and plastic. I would recommend that they should add DI to at least the 2.0/2.2/2.4 4 bangers and until a smaller engine is ready, 6 speed manuals and automatics across the board for all volume midsizers, even the G6(remember that car GM?)



Hopefully the HCGI engines will be ready soon too!

 

[monza164]

I recently read the Camry passed the Silverado, which while disappointing was not a surprise. It made me wonder how the Malibu was doing. The new Delta can't get here soon enough.

 

[igotzzoom]

We're way past that point out here in CA. 87 is right around $4, give or take, and I just saw diesel at $5.19 today in Orange County.

 

[eb110americana]

Those numbers seem a bit odd to me. The F-150 was (is?) Ford's best seller and combined with the Ranger, only makes up 9% of their sales? And the SUV (which must mean only the Explorer, Mountaineer, Expedition, and Navigator and no unibody crossovers) only amounts to 4.4% of US sales? So what, pray tell, makes up the other 86.6% of sales? Cars? It must be mostly crossovers and Foci unless the numbers are off.

Even so, I think they are right on the money with what they are saying. Large vehicles are going to become luxuries to operate, only necessitated by cargo, be that numerous people or mass. Hopefully this means less single passenger behemoths being used as runabouts to the office and Bloomingdales. The small car is getting hotter by the moment, let's hope GM didn't dump all their eggs into the GMDAT basket for North America.

As great as GMDAT is with creating a classy interior at rock bottom prices, I think GM could get caught with some embarrassingly uncompetitive entry level cars trying to sell in a market which will soon include more midsize sedan prices. If GM only has the lowest cost suspensions and barely competitive economy with sub par power, there's not much they can do to bridge the gap. Saturn will at least have Opel's European expertise, but Chevy could really lose out if GM does not take an interest in small vehicles.

 

[04bonnie]

$3.50? It's now $4.18/gal in MI. It's not stopping anybody from driving, there's still just as much traffic on all the roads around here as ever before.

 

[PhishPhood]

I've written here several times that this trend really began back at the end of 2003 well before Katrina. The US buying public has been shedding it's BOF vehicles faster and faster each subsequent year.

However now it's a stampede to get rid of them. From the end of 2003 til the end of 2007 the auto industry as a whole lost 1.0+ million units of BOF vehicles .... forever. They might lose another 500,000 units just in 2008 alone. Some places have them sitting for over a year.

http://www.cnn.com/2008/LIVING/wayoflife/05/23/dumping.suvs/index.html?eref=rss_topstories

We all know it from our every day lives but the cost of fuel is probably the key factor now in every day buying decisions. The Prius, the Civic hybrid and the Escape hybrid are sold out in most places. The market is speaking and speaking loudly.

 

[camaro_freak]

$3.50? It's now $4.18/gal in MI. It's not stopping anybody from driving, there's still just as much traffic on all the roads around here as ever before.

I hear you.. we hit over 4bucks here this afternoon in Indiana. Seems big oil likes to screw the midwest the hardest

 

[Neanderthal]

^^ I believe it's more the speculators, who historically are heartless and as greedy as can be, rather than Big Oil who is pushing this runup.

If you watched any of those pitiful Con-gressional judiciary committee hearings, the main perpetrators of 30+ years of bad legislation were quick to lay blame at B.O.'s feet for everything from no nuclear plants to no synthetic fuel (after all, Hitler made synthetic fuel) to the lack of aid in Burma to possibly Pluto being declared a non-planet.

The childishness and incredible base stupidity of people like Schumer and Waters was there for all to see.
Their stupidity was unbelievable. But it's surely happy days for all our enemies when they see such "leadership" on display.

When people of that nature point fingers, I know they're wrong.

 

[mgescuro]

I hear you.. we hit over 4bucks here this afternoon in Indiana. Seems big oil likes to screw the midwest the hardest

Oh Boo Hoo.
We hit $4 months ago!!!
We're half way to $5 already!!

Ford has figured it out already?? Scary.
Somehow, I don't believe GM has figured ANYTHING out yet. I think what GM's doing is a smokescreen. I think they believe that big trucks and SUV's will rebound soon, so they can slow down their R&D on alternative fuels and engines.

I don't believe GM's realized it yet. And they're too dependent on the big trucks.
Ultimately, we're looking at a world where every car will have DI and a BAS hybrid system to extend the range of the car. GM just doesn't have the fuel efficient engines to support this. Investments still seem to be going into large V8's.

And all this talk about halting the UltraV8 because of future fuel concerns is really just a smokescreen. Because if that were really the case, then all other V8's would have halted as well. And the trucks would have been changed too. ANd that's just not the case.

I'm still expecting $5/gal in the SF Bay Area by August. And at this rate, we'll get there.

Thank goodness, I just take the train into work.

 

[Ronald McChevy]

Ford has figured it out already?? Scary.
Somehow, I don't believe GM has figured ANYTHING out yet. I think what GM's doing is a smokescreen. I think they believe that big trucks and SUV's will rebound soon, so they can slow down their R&D on alternative fuels and engines.

I don't believe GM's realized it yet. And they're too dependent on the big trucks.

I usually have reservations about doing this, but I just have to respond to this.

I work for GM, and have heard the Vice President of Powertrain speak on this subject to GM employees (not stockholders or a newspaper) and you are dead wrong.

I won't get into specifics, but believe me, GM gets it.

 

[milton112c]

I usually have reservations about doing this, but I just have to respond to this.

I work for GM, and have heard the Vice President of Powertrain speak on this subject to GM employees (not stockholders or a newspaper) and you are dead wrong.

I won't get into specifics, but believe me, GM gets it.

Good I hope so. I really wish you'd get into specifics though!

 

[DuSpinnst]

$3.50? It's now $4.18/gal in MI. It's not stopping anybody from driving, there's still just as much traffic on all the roads around here as ever before.

Where?

I see $3.90-$4.10 most places. And $4.10 is HIGH. More are around $3.99, $4.01.

 

[DuSpinnst]

Oh Boo Hoo.
We hit $4 months ago!!!
We're half way to $5 already!!

Ford has figured it out already?? Scary.
Somehow, I don't believe GM has figured ANYTHING out yet. I think what GM's doing is a smokescreen. I think they believe that big trucks and SUV's will rebound soon, so they can slow down their R&D on alternative fuels and engines.

I don't believe GM's realized it yet. And they're too dependent on the big trucks.
Ultimately, we're looking at a world where every car will have DI and a BAS hybrid system to extend the range of the car. GM just doesn't have the fuel efficient engines to support this. Investments still seem to be going into large V8's.

And all this talk about halting the UltraV8 because of future fuel concerns is really just a smokescreen. Because if that were really the case, then all other V8's would have halted as well. And the trucks would have been changed too. ANd that's just not the case.

I'm still expecting $5/gal in the SF Bay Area by August. And at this rate, we'll get there.

Thank goodness, I just take the train into work.

You also have a complete lack of insider knowledge and information in general about how automotive works.

 

[Fastvet78]

Wow cali at almost 5 a gallon? I thought it was bad at 3.70 in jersey. Thats terrible.

 

[YupYupYup]

We all know it from our every day lives but the cost of fuel is probably the key factor now in every day buying decisions. The Prius, the Civic hybrid and the Escape hybrid are sold out in most places. The market is speaking and speaking loudly.

So what happened to the Honda Accord hybrid? Cancelled. And the Prius and Civic hybrids have been artifically limited due to production costs and to hype them. If the market was speaking loud an clear, Toyota and Honda would only sell hybrids...Nothing else. The market right now is partly a shift to more fuel efficient cars, but also a lot of "green" hype/ trend. In fact the demand probably was there but the supply wasn't until recently.

There will still be a lot of people driving large cars and driving them a lot...Suplly and demand will dictate fuel costs (along with a few speculators in the short term), so until people curb their habits it won't drop prices.

 

[AMERICA 123]

Wow cali at almost 5 a gallon? I thought it was bad at 3.70 in jersey. Thats terrible.

http://www.fuelgaugereport.com/CAmetro.asp

San Francisco
..............Regular......Mid.......Premium....Diesel
Current....$4.099.......$4.364.....$4.436.......$5.016

Yesterday$4.066.......$4.328.....$4.400.......$4.938

Month Ago$3.973.......$4.230.....$4.299.......$4.483

Year Ago..$3.589.......$3.821....$3.884........$3.237

Highest Recorded Price:​

Regular Unl.$4.099......5/23/2008
..............Dsl.$5.016......5/23/2008

***********************************************


http://www.fuelgaugereport.com/sbsavg.asp




California ...$4.046......$4.307......$4.378.........$4.969
New Jersey $3.744......$4.014......$4.166.........$4.661
Michigan ....$4.005......$4.242......$4.412.........$4.695
********************************************

National (USA)

Current Avg. ....$3.875....$4.114....$4.263........$4.649

Yesterday Avg.. $3.831.. $4.068 ...$4.214....... $4.590

Month Ago Avg. $3.533.. $3.752....$3.887....... $4.214

Year Ago Avg. ...$3.227.. $3.425....$3.550....... $2.919
*Prices are in US dollars per gallon

 

[Jay_mac332]

Man, and I thought that we had it bad here in Oregon. We are only at about $3.60 a gallon here. I'd feel sorry for you guys, but something tells me that Oregon will be at your level soon.

 

[mgescuro]

I usually have reservations about doing this, but I just have to respond to this.

I work for GM, and have heard the Vice President of Powertrain speak on this subject to GM employees (not stockholders or a newspaper) and you are dead wrong.

I won't get into specifics, but believe me, GM gets it.

You can work for GM and talk with VP's all you want.
But the proof hasn't been seen yet. I work with VP's and C-level management all day. And there is a level of knowledge they will never share with anyone except top management.

Sorry.

I do not believe GM has the desire nor the resolve to shift the company in the proper direction. And if they do, they have taken their sweet time doing so.

Fact of the matter is, GM is still a woefully managed company, run by spin doctors and individuals without a clue outside a midwestern point of view.

What GM needs is a cultural overhaul. And that hasn't been done.

You also have a complete lack of insider knowledge and information in general about how automotive works.

And you have zero business acumen.

http://www.fuelgaugereport.com/CAmetro.asp

San Francisco
..............Regular......Mid.......Premium....Diesel
Current....$4.099.......$4.364.....$4.436.......$5.016

Yesterday$4.066.......$4.328.....$4.400.......$4.938

Month Ago$3.973.......$4.230.....$4.299.......$4.483

Year Ago..$3.589.......$3.821....$3.884........$3.237

Yeah, those are averages. I can take a few pictures that would put those prices to shame.
And I read somewhere that Chicago and another city has now matched San Francisco for gas prices.

 

[silvergoat2k6]

Where?

I see $3.90-$4.10 most places. And $4.10 is HIGH. More are around $3.99, $4.01.

$4.19 9/10 for a gallon of 87 here in Holland, MI. It jumped up 20 cents Friday morning...just as Memorial Day weekend was starting...imagine that.