Gas Costs More? Fill ’Er Up!

2007.gmc.yukon.20029928_T.jpgRising gas prices may be causing a reduction in driving. That makes sense. What doesn’t is the news that in spite of increasing pain at the pump, SUV sales are on the upswing.

This, from the San Francisco Chronicle:

The numbers for large SUVs rose nearly 6 percent in the first quarter of
2007
, and the April figures were up 25 percent from April 2006, according to
automakers’ statistics provided by Edmunds.com, an automotive research Web
site.

The bigger the guzzler, the better the numbers. Sales of GMC’s Yukon XL
were up a whopping 72 percent last month
, and the totals for its Chevrolet
sister, the Suburban, rose 38 percent. Topping off the tank on either one can
cost as much as $120.

The turnaround comes after a 24 percent drop in SUV sales from the first
quarter of 2004 to the same period of 2006. One explanation for the renewed
interest is that U.S. automakers are selling a more modern fleet of SUVs, some
of which consume moderately less gas than their predecessors.

So who’s buying these things? And how do they justify their purchases to themselves?

A typical SUV buyer is Dr. Reginald Fulford, an El Cerrito orthodontist
who recently bought an old-fashioned Ford Expedition. It weighs a bit more than
6,200 pounds, is nearly 3 feet longer than a sedan and, on a good day, gets
about 14 miles per gallon.

He knows that to some people, especially in the greener-than-thou Bay
Area, he’s something of a pariah. Occasionally he finds that someone has left a
slip of paper under his wiper blade, asking him to buy a smaller car.

Actually, he has a smaller car, a 1997 Nissan Maxima, that he uses for
some local runs because he knows the Expedition is a big, gas-guzzling vehicle.

Nonetheless, Fulford says there are many reasons why he bought the
Expedition.

"I’m 6 feet 4 inches and I weigh 250 pounds, so for me, it’s a comfort
thing,
" he said. "It’s a comfortable and convenient vehicle. I have a son who
is 4 and a daughter who is 16, and we use the SUV to haul kids around, take
them to parties. We use it to go to the mountains and we pull a water-skiing
boat behind it."

Fulford says he loves the car because of "all the functional aspects" of
it, and his wife loves it "because of all the nice amenities," such as heated
leather seats.

"It would be nice if they could get this fuel thing together," Fulford
said of the Expedition’s comparatively miserable gas mileage. "And as a citizen
of the United States, I’m concerned about global warming. It’s not that I don’t
consider those things. We try to do as much as we can. We try not to drive that
far.
"

An analyst at Edmunds.com remarks, "We’ve always said that large SUVs are never going the way of the dodo." Perhaps their owners are.

Meanwhile in Los Angeles, Mayor Antonio Villaraigoso, who recently attended the C40 Large Cities Climate Summit, arrived in a chartered bus at a press event touting the city’s efforts to stop global warming…and left in nothing less than a GMC Yukon. Somebody ought to tell the mayor those things are awfully hard to hide.

  • Gizler

    I just got an email from moveon.org pushing legislation to lower gas prices. Um, no thanks.

  • Sarah, I think the premise behind the SF Chron piece is questionable. You refer to "rising gas prices" and "increasing pain at the pump." The three-month SUV sales figures in the Chron piece are for 2007 and 2006. But the U.S. average retail gasoline price in 1Q 2007 was only 1.9% higher than in 1Q 2006, and that tiny increase disappears when adjusted for inflation. Bottom line: no increase in gas prices, and a modest gain in sales of big SUV’s. Yawn.

    I gather that April 2007 prices were a good deal higher than April 2006, while large SUV sales were up a lot. That’s an anomaly. But one-month economic data are full of transient anomalies like that. The Chron should have held its story until full 2Q data were in.

  • andrew

    I’d be curious to see SUV sales data for Brooklyn, I feel like I have been seeing more new large SUVs lately. I wish there could be some sort of large SUV congetion charge for downtown Brooklyn, it seems like the last place on earth you would need such a big hunk of junk.

    I agree the stats for the article were a bit vague, it still represents many of Americas twisted values and also there problematic finances,

    big suv=big car loan/gas tank

    yet still they are buying.

  • I just got an email from moveon.org pushing legislation to lower gas prices. Um, no thanks.

    Me too. The subject was “$4 a gallon?!” I wrote back asking them to let me know when they start supporting a gas tax to push the price to $6 a gallon.

  • Niccolo Machiavelli

    Here, here Steveo and Komanoff.

    Maybe people are still buying SUVs because the price of gas is not really high, at least in historical terms. Gas and oil are commodities and like corn and pork bellies are priced over time in a futures market that predicts, or at least attempts to predict, the price cycle of the commodity. What is different about gas and oil is that they are not making any more of it, it is not in that sense renewable.

    $3.00 or $4.00 a gallon is no where near the post WWII high for gas when adjusted for inflation. Gas today is maybe 65% of the high from the Carter years. And, when you consider that oil is not renewable there has to be some consideration that overtime it should be expected to outpace inflation as the remaining pool of the sludge diminishes.

    I, for one, am tired of hearing about how “high” is the price. People pay a price for their vehicle miles, if more of that cost goes to the pump, less goes to the sticker price. That is what is happening to Detroit. To the extent more is going to fuel the vehicle (marginal cost) less will go the buying the vehicle (fixed costs (and UAW pensions and Health and Welfare and wages)).

    Discussions of gas price should include an adjustment against the Consumer Price Index and should be analyzed in the post war (Vietnam) era. Hell, that was 40 years ago now.

  • P

    Niccolo-
    From what I understand today’s prices are rivaling the historic highs of 1980 in real dollars.

    The difference from 1980 is that Americans are driving more than ever. Imagine the aspiring homeowner who decided in light of the high cost of NYC real estate to buy in the Poconos- surely these prices have to be causing reevaluations of those business decisions.

    I agree that Americans need to be driving less but it should be understood that market forces do indeed use force. Progressives should be conscious of these hardships and work to provide a cushion to such a regressive ‘tax’ as a high gas prices. If this ‘cushion’ comes in a form unconnected to the amount of gasoline used (for example, 500 dollars per family) the market will still be pushing people away from cars but the burden of shifting from automobiles doesn’t have to be borne on the backs of the working class.

    Of course, I wish that the government had been imposing this tax on gasoline before the oil companies got to but the point remains the same.

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