SUV Sales Rise Due to Cheap Gas

What’s that old quote about those who fail to learn the lessons of history are doomed to repeat them?

Trucks and SUVs will outsell cars in December, according to researchers at the automotive Website, something that hasn’t happened since February.

Meanwhile the forecast finds that sales of hybrid vehicles are expected to be way down.


Anyone who had any doubts about the short memories of the American public can use this news as Exhibt A.   I guess the time to get that Prius you’ve had your eyes on is now.

As I mentioned in a comment recently, the global economy swirling the drain will cause lower demand for many commodities, including oil.   Most of the countries that export oil rely on the income from those sales so heavily that they will continue to pump out plenty of the stuff for the time being.  When the choice is pump oil or have the poor, unfed masses rioting in the streets, the calculus regarding how much oil to pump in a falling market gets a hell of a lot easier.   This will cause a glut for a while most likely.  It will also kill off or delay some of the proposed or planned production that was relying on $60-$80 oil to be profitable.

Some pundits are expecting low oil prices to be around for a while.  We may enjoy lower gas prices for some time to come, but keep in the back of your mind that those low prices are caused by the global economic crisis.   If the economy comes roaring back in a few years’ time and in the meantime we have consumed more cheap oil while simultaneously delaying exploration and production of ‘non-conventional’ plays, where do you think we’ll end up?


4 Responses to SUV Sales Rise Due to Cheap Gas

  1. Chile says:

    During holiday travel, we also noticed everyone is back to driving crazy speeds on the highways. Not us, we stuck to about 60 mph and just watched the gas guzzlers zoom by.

  2. Delaying new oil production will eventually lead back to high prices if not to shortages. Might as well eat, drink and be merry, for tomorrow we shall walk or bicycle.

  3. phaedrus says:

    Hm, today I eat, drink, be merry and ride a bicycle.

    I guess I’ve always been a bit impatient.


  4. Its a shame that Hybrids are taking a hit in sales. I own two, and love them both; a Ford Escape Hybrid SUV that clocks in at 30mpg, and a Honda Civic Hybrid that get 45. I will never buy a standard car again, unless there is no choice.

    While gas prices are low now, they will not stay low. If/when the economy recovers, gas prices will skyrocket, because oil production peaked in 2005.

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