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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (111959)	5/26/2009 4:42:30 PM
From: TimF	Read Replies (1) \| Respond to of 541404

What we saw last year when oil went through the roof is that Americans were desperately trying to ditch their SUVs, and dealers couldn't keep hybrids and other fuel-efficient cars in stock. Not in as large of numbers as you might think. The current supply of cars can't change quickly. So if just 10% or even 5% or less of SUV owners want to get out of SUV's their will be a glut of used SUVs on the market, their value will plummet, as will, to a lesser extent the value of new SUVs. The same applies to hybrids or very fuel efficient vehicles in general. The current supply of new vehicles produced of each different type can't change very quickly. The stock of existing vehicles of that general type changes much slower still. Also remember the idea I was responding to was "without changing weight". The argument had been raised that smaller cars will be less safe cars (all else being equal that is true). So it was proposed that the change happen without reducing weight. If someone went from an SUV or large car to a subcompact to save on fuel, he would be going to a vehicle with much lower weight. Getting a lot of extra fuel economy without greatly reducing size and weight is harder than just going to smaller vehicles. Other methods of reducing fuel usage, reducing power, removing or weakening options like A/C and safety features or emission controls, may be less acceptable to consumers and/or under the law. And note that the shift in demand away from SUVs and to Priuses etc. happened with a great increase in fuel prices. As long as the world economy is doing poorly we are unlikely to see the same type of increase, and if later we see a major increase to similar levels it might be slower than before. I believe a lot of the pressure on SUVs and demand for high MPG vehicles was because of the speed of the change as much as its magnitude, gasoline prices where almost as high in real terms in the past (for example the early 80s) without quite the same sort of shift in demand.