An Ill Wind Which Blows No Good
“Hurricane Katrina was definitely a catalyst for gas prices but even before that we were facing an upward trend in prices,” said Mike Chung, market analyst at auto website Edmunds.com.“In response to that, consumers were beginning to look at other vehicles outside of large SUVs. The SUV boom has definitely changed. The whole segment has thinned out into several different segments,” he said.
GM reported that despite its elite credentials, the Chevrolet Suburban saw sales drop 28 percent during August. Ford said sales of the full-size Ford Expedition plunged 40 percent.
Toyota Motor said sales of its heavily promoted Sequoia dropped 32 percent in August. Nissan reported sales of the Armada, which is built in a portion of Mississippi spared by Hurricane Katrina, fell seven percent.
Reviewing the August sales figures, analysts at Merrill Lynch said that Katrina could accelerate “consumers’ natural migration away from large SUVs”.
The big auto makers can see the writing on the wall. Ford plans to halt production of the giant Ford Excursion at the end of September.
“There is no question that the demand for traditional sport utility vehicles has been affected by rising gas prices,” Steve Lyons, group vice president in charge of Ford sales and marketing in North America, said recently.
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This is a rather obvious story. It is also a repeat of the early 1970s when, in response to an oil shock, consumers dumped the gas guzzlers and bought Honda Civics.
Peak Oil alarmists would like to believe that the world, and suburban North Americans in particular, are going to hit a gas wall where there will simply be no supply at any price. People with a tiny sense of reality recognize that the racheting up of oil prices - with or without taxes - will ensure that people make car purchase decisions rationally. Which will mean a trend away from SUVs and towards more gas efficient cars. They will also look at hybrids and SmartCars and, in extremis, the bus.
Long before the silliness of Kyoto has much bite simply having the gas prices rise will save us Rick Mercer’s tonne.
Now, those are the short term purchase decisions. A little further down the track comes the question of where people are going to want to live. The SUV is part of a gas fueled orgy of anti-urban behaviour. Its natural habitat, the suburban cul-de-sac, is the actual belly of the beast. Ask this question: if gas gets to a couple of bucks a litre do you want to live 40 miles and an hour commute from work?
Creating density in the burbs, probably around light rapid transit stops, is going to be the next reaction to the $200.00 fill up. And that is a long term story with the entire premise of endless, ugly single family development being radically revised.
Sprawl was drowned in New Orleans. With a bit of luck it will suffer a similar fate elsewhere.
Written by jay on September 12th, 2005 with
2 comments.
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#1. September 12th, 2005, at 5:50 PM.
Pardon my obtuseness here, but I have to ask a question that’s been bugging me for over a year now: why do some people talk of “[urban] sprawl” as if it’s something incredibly distasteful? I mean it seems almost visceral at times. I really don’t get it.