Thursday, January 17, 2008

High Gasoline Prices and their impact on Fuel Economy

Two interesting data points:

1. Falling share of V-6 and V-8 engines since 2005

“It’s pretty clear that the V-8 is on its way out of the mainstream,” said Ford’s chairman, William Clay Ford Jr.

General Motors recently canceled a $300 million program to develop a new V-8, citing new fuel-economy standards that require a 40 percent improvement in overall gas mileage by 2020. “That cancellation was a direct result of the 35-mile-per-gallon legislation,” Robert A. Lutz, G.M.’s vice chairman, said Tuesday.

Even the famed Hemi V-8 from Chrysler will be quieted at stoplights when it is paired this year with hybrid technology in some big S.U.V.’s.


Mr. Ford, the 50-year-old great-grandson of the company’s founder, Henry Ford, said the passing of the V-8 era is somewhat bittersweet for baby boomers like him.

“We all grew up when the coolest guy on the block had the most cubic inches under the hood,” he said. “That feeling dies hard.”

2. Driving Behavior and Vehicle Markets (pdf)

The 100 percent increase in real U.S. gasoline prices since 2003, which is larger even than the record increases of the early 1980s, has induced motorists to adjust their driving habits and the types of vehicles they purchase.

* Freeway motorists have adjusted to higher prices by making fewer trips and by driving more slowly.

* After increasing steadily for more than 20 years, the market share of light trucks (including sport–utility vehicles and minivans), relative to all new passenger vehicles, began to decline in 2004.

* Used-vehicle prices have shifted, reflecting changing demand, particularly with respect to fuel economy: The average prices for larger, less-fuel-efficient models have declined over the past five years as average prices for the most-fuel-efficient automobiles have risen.

Shall we say bring on the 100 dollar oil? (May be, May be not?)

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