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Climbing Fuel Prices Are Changing The Auto Industry

The auto industry has had to adapt to the ever increasing fuel prices. Innovative and efficient hybrids are selling like hotcakes and two-wheel vehicles have hit an all time high in popularity.

 
 
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PRLog - Mar. 24, 2011 - It appears that increasing fuel costs have become a permanent fixture in the U.S. economy. We first saw fuel prices climb in 1974 to an “outrageous” $.50 per gallon.  By 1984 prices had reached $1.25 per gallon.  In 1997 people began paying around $1.50 per gallon and the new century saw prices climbing towards the $2.00 mark.  Current prices are hovering around $3.50 a gallon, this being about $.81 more per gallon than last year.

New hostility and consequent air strikes in Libya have generated increased oil prices in electronic trading.  This will inevitably be reflected at the gas pump. Economists anticipate that prices will continue to rise through the summer months then level out and remain constant for awhile.  Although it appears that fuel hikes are increasing at exponential speeds, it is comforting to know that Americans pay less than half as much for fuel as our European neighbors do. The current average for a gallon of petrol in the UK is around $9.00.  So, be grateful for U.S. fuel subsidies which have helped and will continue to buffer prices at the pump.

It is no surprise that fuel costs have had an impact on the auto industry.  Experts in the field are projecting that auto sales for 2011 will be around sixteen percent higher than last year.  People are trading in gas guzzlers and seeking new economy vehicles.  Top of the list are hybrids like the Toyota Prius, Honda CR-Z, Nissan Leaf and Ford Fusion.  Plug-in Hybrids like the Chevy Volt are equally as popular.  Retail sales may also be affected by consumer uncertainty around inventory levels.  Dealerships are seeing an increase in pre-orders and reservations for new models as car shoppers are trying to secure their choice of vehicle as availability decreases.

The recent disaster in Japan may add fuel to the flame if production of Japanese vehicles is significantly slowed.  Damaged battery factories may not be able to produce hybrid batteries for vehicles like the Prius for some time. American dealerships were selling out of Prius models before the destructive tsunami crippled Japan. Now dealers expect even lower than normal supplies in the months to come.  Although the Japan crisis will affect North American production as the parts supply is slowed, it is expected to be only a short term delay.  Japanese auto manufacturers are working rapidly to reopen production facilities.  In less than two weeks after the disaster, Toyota and Lexus production facilities will reopen.

Retail sales of two wheel vehicles have seen significant increases as well.  Dealers are selling everything from Harley Davidsons to Vespas to Mopeds like never before.  Considering that  Vespas and Mopeds can get up to 70 miles per gallon and even the largest Harley can travel about 50 miles on a single gallon of gas,  people appear to be reconsidering the need for enclosed, four wheel vehicles.  Of course, motor cycles and scooters are not the solution for the masses. Good luck braving a snow storm in Michigan or hauling home a weeks’ worth of groceries on a Harley (or heaven forbid a Moped) but for residents of warm sunny climates, who just need to get around town, these offer a  creative solution.

Auto manufacturers are also doing some creative thinking. Many are investing in new fuel efficient engine technologies for combustion engines. Others are experimenting with new ways  to reduce the weight of their vehicles.  Ford, for example, is testing a technology that injects minute air bubbles into their molded plastic parts.  The result is expected to reduce the weight of the parts by up to 10% and overall vehicle weight by between 250 and 750 pounds. Auto parts manufacturers are also working to create parts that will enhance vehicle fuel efficiency.  Tire companies, Michelin, Goodyear and Cooper GFE are all offering new, fuel efficient tires designed with less roll resistance.  Although the end result may only yield a 1 to 2 percent difference in fuel economy this combined with other automotive technologies could add up to significant savings at the pump.

If you are interested in a fuel efficient vehicle and would like to see what’s new for 2011 visit http://www.spford.com or http://www.galpinsubaru.com. View all new vehicle inventory, schedule a test drive and request a price quote online.

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Five Star Ford Carrollton is a Dallas Ford dealer with a large selection of new and used cars at excellent prices. We have Fuel Efficient Cars, Family Vehicles and Tough Ford Trucks.

Photo:
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City/Town:Carrollton - Texas - United States
Industry:Automotive, Finance, Energy
Tags:economy cars, fuel efficient, hybrid cars, gas prices, japanese cars, car sales
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