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Politics : View from the Center and Left

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To: Lane3 who wrote (64045)	5/7/2008 11:20:00 AM
From: slacker711	Read Replies (1) of 542946

It won't if gas prices add to demand. I don't know when production will meet it. There are lags to both the consumer and production sides of the equation. The manufacturing capacity has to be put in place, but the price expectations of manufacturers are changing right along with those on the consumer side. It doesnt happen overnight but we should see capacity added faily quickly over the medium term (a few years out). One big milestone will be when manufacturers earn equivalent margins on hybrids as non-hybrids. Toyota expects that in 2010. People might get enough of a bargain on performance cars to make up for the additional gas costs. Those bargains are due to car manufacturers having excess capacity of those models. They are basically taking a hit on margins to subsidize the cars to a level where they might make sense to buy. That wont last for long. As car manufacturers take capacity out of the system, pricing will return to normal....they'll just sell far fewer units of the performance models. Slacker

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