Wow, gas prices force SUVs off the road
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This just in, it takes a think tank from Scotia Bank (one of Canada's top banks) to sit in a room and pump out the obvious: gas prices are shfiting vehicle buying in the US and Canada. The report states that based on sales through May, the fuel efficiency of vehicles bought in the United States so far this year has increased to an average of 24.4 miles per gallon (mpg), up from 20.2 mpg in 2007 and an average of 19.8 mpg during the past decade.
The report states that, despite the dramatic change in U.S. vehicle buying patterns, the fuel efficiency of the current U.S. vehicle fleet is still more than 40 per cent short of the requirement set out in last year's landmark U.S. energy bill.
The Global Auto Report states that, 35 per cent of Canada's total assembly capacity is currently dedicated to producing large cars, minivans and pickup trucks, segments that have posted sales slumps of at least 20 per cent in the United States so far this year. In fact, only the Japanese-owned facilities in Cambridge and Alliston, Ontario are currentlyproducing small fuel-efficient cars in Canada that meet the new 2020 CAFE targets. These facilities account for only 20 per cent of Canada's overall assembly capacity. The challenge is heightened because Canada has become a high-cost jurisdiction, in response to the strong loonie and union contracts, making it more difficult to attract the billions of dollars needed to retool its facilities to meet the new 2020 CAFE standards.
The report adds that aside from the shift to smaller cars and light trucks, Americans are also driving less and taking more public transit. Estimates from the U.S. Energy Department indicate that gasoline demand was four per cent below a year earlier in mid-June, one of the sharpest fall-offs
since the oil shock of the early eighties. In addition, the American Public Transportation Association recently indicated that mass transit use increased 3.3 per cent year-over-year in the first quarter, led by a double-digit surge in light rail. This reflects the slashing of U.S. household purchasing power by more than US$90 billion through the first quarter due to record gasoline
prices.
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Barry
Mr. Do It All
Jun 26, 2008, 7:39 PM
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