Mixed Reactions to Cheaper Gas
As I reported last week, it’s still unclear what consumers may do now that oil and gasoline prices have plummeted. A bit of news from TradingMarkets.com shows that consumers’ mixed reactions to lower gas prices are making things especially difficult for the auto industry.
Industry analysts for Kelley Blue Book, an auto valuation company, are pessimistic. Spokeswoman Robyn Eckard told TradingMarkets, “People don’t have money and it’s harder to get credit, and they have other financial priorities right now. … What we’re seeing is that lower gas prices are literally having zero effect right now.” Kelley Blue Book has found that 31 percent of prospective car buyers are delaying their purchases for at least a year.
Other industry folks, however, including the auto information website Edmunds.com, expect SUV and big- car sales to start going up again.
Still, new-car sales for October are expected to be the lowest since January 2002. In addition, according to the Dept. of Transportation, Americans drove 15 billion fewer miles in August 2008, compared with August 2007. That’s a 5.6 percent drop — and the biggest single-month drop since 1942.
While this is bad news for car companies and dealers, it’s certainly boosts the conservation effort that so many environmentalists — and some economists — are pushing for.