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Old 02-12-2010, 12:37 PM   #1
AVANTI R5
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Default U.S. Fuel Economy Regs Versus Customer Behaviors



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Even though the average fuel price has increased 80 cents per gallon to $2.69 from year ago, the effect on buyers’ choices appears to be perverse.

This shift comes as pending federal regulations dictate a corporate average of 35.5 mpg (6.63 L/100 km) for new vehicles sold by 2016, and this will require that cars achieve 42 mpg on average.

However, the latest survey shows that interest in small cars and hybrid vehicles is declining when compared with a year ago when memories of $4 a squirt gasoline were still fresh in buyer’s minds.


Small car consideration is dropping?

Whether the latest data reflects a short-term aberration among potential buyers, or the acceptance by buyers of higher fuel prices, the problem for automakers remains the same – the mix of vehicles they need to sell to comply with the law is discordant with what people are actually interested in buying.

Consider this from auto consultancy Auto Pacific: When asked what kind of vehicle would be selected to replace their primary vehicle last January, 24% of respondents said a Small Car. By June 2009, Small Car consideration had fallen by a third to 16%, and fell another third to 12% in January 2010.

Put another way, in one year, consideration for Small Cars has fallen by half, as the price of fuel went up.

The shift in hybrid “intenders” is even more dramatic — down from 25% a year ago, to 14% six months ago, to 11% In January 2010.

Now, there likely is some noise in this data given the well- publicized quality and safety problems at Toyota, the world’s leader in hybrid technology, but if this reflects actual trend, buyer are turning away from a proven, and high fuel economy.

(See the March issue of Road & Track magazine, which answers this question – Are Hybrids Really That Good? Exec summary: yes. Caveat: I used to work for R&T, but this is a serious test nonetheless that shows the Toyota Prius thumping the much smaller Ford Fiesta, and the more expensive VW diesel by an average of 14 miles per gallon.)

The Return of Trucks and SUVs?

These small car results are contrasted by the replacement vehicle intention with respect to SUVs in the survey: 16% a year ago, 20% six months ago, and 26% in January 2010 — an increase of 63%.

Pickup truck intention follows a similar pattern: 10% a year ago, 12% six months ago and 15% this January for a 50% increase.

“What a short memory we have” said Jim Hossack, the studies’ author.

We also have the potential of another government policy fiasco. Without some floor on fuel prices, and without what seems to be a politically impossible tax on fuel, we are headed the same road we took after the two preceding fuel crises. Not only is our fragile economy at risk, but national security is threatened as well.

Remember?
Ken Zino
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Old 02-16-2010, 02:59 PM   #2
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In my opinion, I think once we see the Mazda 2's, Fiesta's and Fiat 500's hit the scene we may see a shift in buying.
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Old 02-16-2010, 03:04 PM   #3
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the mix of vehicles they need to sell to comply with the law is discordant with what people are actually interested in buying
If these companies got off their respective asses and started using technology (clean diesel, hybrid, radical aerodynamics, whatever) to build vehicles that are both compelling to consumers and compliant with CAFE then we wouldn't have a problem. Toyota gets it, and their superb sales figures for the Prius are an example.
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Old 02-16-2010, 03:08 PM   #4
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In my opinion, I think once we see the Mazda 2's, Fiesta's and Fiat 500's hit the scene we may see a shift in buying.
No kidding. I find it pretty funny when researchers are doing this sort of research when the models we currently have choice wise were being drawn up back when gas was still $2.50 a gallon. All the new smaller stylish cars will be hitting the US market between now and 2012. Shoot even the new fuel efficient SUV's and larger cars will be showing up closer to 2012.

Which case if you don't really need a car right now do your self a favor wait a solid year and your choices will be dramatically different vs getting stuck with a new old tech vehicle.

True Ford and GM canned their smaller more fuel efficient high tech diesel power plants which would have worked well for their mid to large SUV's - just buy non domestic everyone else will be :-)

Ford and GM are very short term focused right now. 2012 is expected to be a banner year in auto sales based on the average age of the cars on the roads right now. The really big new products are targeting 2012. Till then we get little dribbles of new stuff but nothing very exciting or all that fuel efficient.

My neighbor has a 5200lb 7passenger SUV that gets 28mpg on the highway and tows up to 7500lbs! It's not made by a Domestic automaker. Just wait a year if you think the Direct injection gas engine stuff is interesting 2012 is going to be a pretty cool year to be looking at cars.
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Old 02-16-2010, 04:05 PM   #5
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Are Americans that short sighted? As much as I would like a new Legacy GT or WRX in the near future, I would purchase such a car with the assumption that 2 year from now 93 octane will very likely be close to $4.00 a gal. Obviously this would impact my decision to buy such a car. Thus, a N/A, DI, 2.0L Subaru sports coupe could really be the right vehicle for me.
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Old 02-16-2010, 04:09 PM   #6
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This is dumb****istan. Ive given up hope for us. Lets just burn this planet down and get it over with......
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Old 02-16-2010, 04:32 PM   #7
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Are Americans that short sighted? As much as I would like a new Legacy GT or WRX in the near future, I would purchase such a car with the assumption that 2 year from now 93 octane will very likely be close to $4.00 a gal. Obviously this would impact my decision to buy such a car. Thus, a N/A, DI, 2.0L Subaru sports coupe could really be the right vehicle for me.
Chances are if you want a performance car fuel cost will not be a big factor. Nor will it be a major product ie money maker for a auto company that builds small economic cars ie Subaru - Honda etc.

Which case 93 octane would be a waste of money unless your seeing a dramatic improvement in milege vs power ala direct injection engine technology etc. If your concerned about fuel costs the last thing you need is a "''performance car"

Want a performance car get a 911 or Lotus or better yet build a track car.
Need a car to get your kid to school - pick up porkchops at the store and get to the office get a nonturbo that drives really well and use it to 100% of its ability
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Old 02-16-2010, 04:44 PM   #8
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In my opinion, I think once we see the Mazda 2's, Fiesta's and Fiat 500's hit the scene we may see a shift in buying.
why would a different face on the small car solve the same problem small cars have had forever?

that problem being that they are small and do not offer the same convenience of big cars in terms of cargo area and the ability to pull a stump from your neighbors yard?

until the utility of big cars is overcome by the cost of owning them people will not move away from them.
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Old 02-16-2010, 05:33 PM   #9
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^^yup

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Are Americans that short sighted?
Somewhat, but they also value cargo space and comfort over fuel economy. Unless we have a permanent shift to higher gas prices, that isn't going to change (and there's no real reason it should IMO)
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Old 02-16-2010, 05:50 PM   #10
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You can have cargo space and comfort with fuel economy much improved from what we have now. The problem is, yes it will cost more.
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Old 02-16-2010, 06:05 PM   #11
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You can have cargo space and comfort with fuel economy much improved from what we have now. The problem is, yes it will cost more.
Yes - true whats the Dodge Sprinter Van selling for? Bit more than the cheap gas hog V8 powered American van's are priced at.

MB GL 320 CDI is a tad more than an optioned out Suburban. But your not getting 400lb per foot torque at 1600rpm full time AWD and 22-23mpg around town and 24-28mpg on the highway either.

Better tech costs more. American's like cheap ass cars or at least they did till it became clear GM was loosing its shirt every month giving away cheap ass cars for cheap ass prices.

You want a good quality well built car its going to cost ya big or small hence why we don't get the small euro cars in the US. They are not cheap!
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Old 02-16-2010, 07:31 PM   #12
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Chances are if you want a performance car fuel cost will not be a big factor.
I wholeheartedly disagree. I think that there are alot of people who want a performance car like a WRX but don't have hundreds of dollars extra to spend on fuel. I would argue that an STi driver might be less inclined to care about fuel, but some might as opting for the STi trim may have been a stretch. The same goes for luxury car owners. How many people you think buy luxury cars that perhaps can't afford them or can barely afford them? Spending an extra $1000 a year on gas will be felt those owners.
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Old 02-16-2010, 07:48 PM   #13
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I think that there are alot of people who want a performance car like a WRX but don't have hundreds of dollars extra to spend on fuel.
Certainly gas mileage was one of the reasons why we eventually ended up going with a Civic instead of an Impreza this time. My girlfriend didn't really like the base Impreza and while we could have bought a WRX the extra cost of premium gas and the higher fuel consumption on top of the extra $$$$ to buy the car just made the whole deal too expensive to justify.

But if I'd been looking at an STI, I don't think I'd have cared .
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Old 02-16-2010, 07:55 PM   #14
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that problem being that they are small and do not offer the same convenience of big cars in terms of cargo area and the ability to pull a stump from your neighbors yard?
The problem is that they were equipped like cheap crapboxes. Want a domestic small car with sat nav, leather, and heated seats? Two years ago there were exactly zero choices, no matter how much you were willing to pay. Now there is one choice, and soon there will be a bunch. And that one choice has been setting sales records for Ford despite riding on a 12 year old platform.
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Old 02-16-2010, 07:59 PM   #15
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Americans in general view hatchbacks as cheap though. It's just going to take time to change peoples' minds.

I love my hatch.
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Old 02-16-2010, 08:09 PM   #16
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The bottom line is that small cars are ushally ugly and not convient. And for all you Domestic bashers Ford makes a great product better than thier European rivals and on par with Japanese cars. Keep bashing the Domestic car companies and enjoy your stint in the welfare line.
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Old 02-16-2010, 08:19 PM   #17
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Certainly gas mileage was one of the reasons why we eventually ended up going with a Civic instead of an Impreza this time. My girlfriend didn't really like the base Impreza and while we could have bought a WRX the extra cost of premium gas and the higher fuel consumption on top of the extra $$$$ to buy the car just made the whole deal too expensive to justify.

But if I'd been looking at an STI, I don't think I'd have cared .
Bingo. Now, a 2.0L Ecoboost Ford Fusion would be a fun car. I'd like to see Subaru apply the same formula. DI. Smaller displacement. Turbo. And the S4 increased its fuel economy by 7 MPG. Though an S4 driver may or may not care....That being said, my parent's neighbor has a yacht with 3 state rooms and he rarely takes it out cause diesel costs so much.
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Old 02-16-2010, 08:45 PM   #18
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Keep bashing the Domestic car companies and enjoy your stint in the welfare line.
I don't see the connection.
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Old 02-16-2010, 08:52 PM   #19
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There is a huge connection, GM and Ford alone not doing well effects 10% of the jobs in this country according to Forbes. If these companies fail you could expect the ripple effect to maybe 15 to 20 % uneployment. Sorry my countrys security and well being mean more to me than being a fan of foreighn cars. The fact that most people on this board our just Japanese car fanboys and enjoy just bashing the domestics no matter what they do right is just kind of sick.
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Old 02-16-2010, 10:11 PM   #20
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While I don't have production numbers handy, Toyota, Honda, Nissan, Hyundai, Subaru and BMW together build a lot of vehicles in North America, and use a lot of North American suppliers. The market here is a certain size, and vehicles will be built to meet the demand. As the cost of transport (fuel) continues to rise, building them here makes more and more sense for the foreign manufacturers.

IOW, the jobs aren't permanently going away, even if the domestics shrink away to nothing.
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Old 02-16-2010, 10:55 PM   #21
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Yeah they do. Toyota building a plant here strictly for the Prius may have been one of their smartest moves in the last decade.
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Old 02-17-2010, 08:22 AM   #22
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While I don't have production numbers handy, Toyota, Honda, Nissan, Hyundai, Subaru and BMW together build a lot of vehicles in North America, and use a lot of North American suppliers. The market here is a certain size, and vehicles will be built to meet the demand. As the cost of transport (fuel) continues to rise, building them here makes more and more sense for the foreign manufacturers.

IOW, the jobs aren't permanently going away, even if the domestics shrink away to nothing.
And the profits go to Japan. If we want to emulate a a third world country that is our prerogative, but it hardly seems something to aspire to. Though as you point out we will still have low paying jobs.
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Old 02-17-2010, 08:32 AM   #23
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We gotta stop thinking of these corporations as "Japanese", or "American." They are owned by shareholders from across the world. While the corporate hq may be in Tokyo or Detroit, the profits go to the shareholders, whereever they live.

U can buy some Toyota shares if you want, bam, the profits go to you.
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Old 02-17-2010, 08:36 AM   #24
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Mutual funds I hold have stock in Toyota and Hyundai. The profits come to ME.

It can come to you too.
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Old 02-17-2010, 09:19 AM   #25
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And the profits go to Japan. If we want to emulate a a third world country that is our prerogative, but it hardly seems something to aspire to. Though as you point out we will still have low paying jobs.
How much wealth generation has GM and Chrysler been responsible for over the last decade? How much has gone into their worthless execs' pockets? How much has gone towards the betterment of their workers? Where are these workers, anyway? (Hint: "American" companies build a metric ****ton of their vehicles in Mexico and Canada.)
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