Whatever happened to $4-a-gallon gasoline?
As you are well aware, it has arrived in all its glory (or igominy), but why do I hear so little weeping, wailing and gnashing of teeth?
I guess I know the answer. After some relief in the past week or so, my fellow citizens (and I) are saving our umbrage for $5 or $6 gasoline. Donald Trump, who may or may not be a presidential candidate, spoke of $7 a gallon recently.
Where is the money going? Perhaps you noticed that one big oil company reported a net profit of nearly $11 billion in the first quarter, up 69 percent from a year earlier. And oil companies’ fat profits have led some members Congress to question the earnings.
Looking at both sides of the coin, the market has been rather slow to respond to $4 gasoline -- slower than in the summer of 2008 when fuel first reached that price. Big pickups and SUVs really got clobbered.
On the other hand, April pickup sales this year rose 8 percent over last year. Not bad, but that segment is up 21 percent for the year to date. So April was a loser.
Farewell, Mr. Macho
Perhaps the first to desert big pickups is the macho buyer. You know the macho buyer. He flexes his spindly muscles and proclaims, “I’m a real man. I drive a pickup.” Mrs. Macho is probably yelling, “Get rid of that damn thing before it drives us to the poorhouse.”
And that’s not too much of an exaggeration. Some Chevrolet Silverados have 34-gallon fuel tanks. At $4, that’s $136 a fill-up. At $5 or $6, you don’t wanna know. If you’re feeding a Ford F-250 with a 38-gallon tank, you’re paying $152 or more.
A lot of money, but pity the over-the-road trucker. I saw a film clip not too long ago of the owner-operator of an 18-wheeler. He said his fuel bill used to be $11,000 a month. Now, it’s $16,000. Ouch!
SUV sales are holding up much better than one might expect in these days of runaway gasoline prices. They were up 28 percent in April, which was a bit better than their increase of 26 percent for the year to date.
SUVs were hit hard in 2008, so how long can the current prosperity last? Stay tuned.
Small cars, naturally, did well in April with gasoline prices rising day by day. The economy segment, which includes all the most popular nameplates (Chevrolet Cruze Ford Focus and Fiesta, Nissan Sentra, Hyundai Elantra, Toyota Corolla-Matrix, etc.) was up 43 percent for the month, much better than the segment’s 34 percent gain for the year.
Cruze tops 25,000
Cruze and Focus-Fiesta sold more than 25,000 cars last month; Corolla-Matrix moved 24,000, and Hyundai dealers delivered more than 22,000 Elantras. Impressive numbers indeed.
But mid-range cars, the industry’s best-selling segment, didn’t do at all badly in April. They showed a 13 percent gain over last year, which was in keeping with their 14 percent improvement for the year to date.
So with higher gasoline prices and all the other uncertainties of the market, hybrid vehicles are having a field day, aren’t they? Well, in a word, no.
Despite the best efforts of Barack Obama and Albert Gore, Americans are wedded to gasoline and the internal combustion engine. Alternative-power vehicles are mired at about 3 percent of the market.
For example, put 100 car buyers in a field with a fleet of traditional vehicles on one side and a similar fleet (style, color, equipment) on the other. Ninety-eight of those 100 will drive off in a traditional car.
The day of the alternative-power vehicle may be coming, but it’s a long way off. At least a generation.