Gas Prices Soar and With Them, Cadillac Escalade Sales
The price of gas continues to increase with each passing week and many analysts figured this would change peoples perceptions and priorities about car buying; moving them towards more fuel efficient vehicles. However, last months sales figures do not tell that story, the newly redesigned Cadillac Escalade sales increased 127% over the previous month while Honda’s Accord Hybrid sales fell around 69% over the previous month.
It seems that as much as we gripe about gas prices, we are still not feeling the effects of the price hikes. We still want to drive our large comfortable cruisers with their big power and poor gas mileage. This is in stark contrast to the oil shortages of the late 70’s where rapid increases in gas prices convinced Americans to buy smaller more fuel miserly cars, since the start of the climb following Hurricane Katrina, fuel consumption in the States has actually risen. Since the late 80s our vehicle choices have actually moved down in terms of fuel efficiency from 22.1 MPG then to 21 MPG now. This may not seem a drastic change, but as cars get heavier and more powerful this trend is only likely to continue.
So if the previous cost threshold was supposed to be $3 dollars a gallon, and we are there and it isn’t forcing a change, then what is supposed to be the new threshold that will make consumers change their choices? J.D. Power’s Tom Libby said that, “Prices have to get to $4 and maybe even higher—and stay there for at least a year—before we’ll see a substantial shift in what we drive.” Our thoughts seem to be that gas won’t stay this expensive, that if we wait it out, it will fall back down. This line of thought seems to lead us to hold onto our gas guzzlers instead of trading them in on gas sippers.