Playing the gas card
Gaza lifting gas pricesWhat will the price of gasoline be this spring? $1.00? $2.00? $3.00?
That is completely dependent upon whom you ask.
This morning I read an article that both cites those whom think that gas prices have bottomed, and those whom think gas has yet to bottom.
In the last week, oil prices are up 25 percent as troubles rage in Gaza, the root of much of this increase according to some. Yet, on the floor of the NYMEX, traders are seeing no increase in demand, and if the economy keeps tanking, more demand destruction is possible.
Yet, even if gas prices bottomed in December, months of cheaper gas were unable to lift demand for new vehicles. In fact, if December auto sales represent the future for US automakers, even a structured bankruptcy won't save Detroit.
And, if cheap gas wasn't able to buoy automakers, what happens if there is a dramatic spike in gas prices? Can unprofitable $40,000 plug-in hybrids really be the solution to this problem? Have decades of cheap gas already killed the US auto industry, but we just don't know it yet?
Labels: gas prices
posted by Dahcredyns at
7:50 AM
1 Comments:
I think you are right and wrong.
Yes, I think that automakers should build exactly what people want to buy. That is the only way they are going to sell cars, make a profit, and continue in business.
They also need to have the foresight to anticipate changes. In other words, anticipate what what people want today is different from what they'll want tomorrow. Then do the R&D and be prepared so that when their customers don't want the OLD THING anymore and now want the NEW THING, they have the new thing to sell.
It's this latter issue where Detroit has fallen down badly - and Honda for example has succeeded.
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