Gas Prices Drop, SUV/Truck Sales Increase, Americans Forget History

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1st Gear: Party Like It's The Early 2000s


'Those who don't remember the past are condemned to repeat it.' — Edmund Jesus Lincoln Twain

I can never remember, exactly, who deserves credit for the quote above. I just remember that Americans rarely seem to heed this good advice.

Case in point? Just read this Freep article that points out the drop in fuel prices has corresponded with an increase in truck and SUV sales.

On Friday, the national average price of a gallon of gas was $3.28, down 23 cents from a year ago.

Just a few years ago, Americans were ditching pickups and SUVs for smaller cars. Fuel economy is still important, but across-the-board improvements in fuel economy and lower gas prices make it less of a factor.

"It is no longer a deterrent in terms of a purchase decision," said Mustafa Mohatarem, General Motors' chief economist. "We have been seeing that for virtually the whole year."


Some of this is just pent-up demand from years of people skipping on trucks, but it does make you wonder. I don't blame car companies for building lots of the profitable vehicles, especially while they continue to invest in fuel efficient compacts.

I blame you, America.

2nd Gear: Ford Quality Sinks And… No One Cares?


Ford's been the strongest American automaker this year, making huge profits and picking up market share from its Japanese and German competitors. All of this while people bitch and moan about MyFordBadTouch so much their "quality is job #1" mantra has been replaced with "it doesn't matter because none of you assholes hate it enough to not buy our cars anyways."

Here's Ford's President of the Americas Joe Hinrich's to Automotive News:

"There's a correlation between freshness of the product lineup and market share. We've chosen to keep our lineup very fresh, which means more frequent launches, more technology, more newness to the vehicle — which inherently provides more challenges for the quality surveys," Hinrichs said in an interview last week.

"All that being said, I'm not pleased with where we are. We need to make progress, and we will."


Maybe sort of true. I think two other things are going on here:

  1. People buy the cars before they realize how cumbersome it is to live in a world without buttons.
  2. People will complain about things they don't like if asked, but it's an ancillary nuisance and people care more about a car that drives well, which most new Fords do.

3rd Gear: Rich People Still Care About Service


So, you can sell mainstream cars without great quality, but can you sell luxury cars without great service? Ze Germans think not, at least according to this Bloomberg article.

Mercedes is offering up to $60 million to dealers for higher customer service ratings, BMW is adding "Geniuses" to its staff. These are people who don't care about sales. Audi is adding valet parking, more convenient hours, and other technology to make luxury car ownership.

"We spoke to people who fly a lot," Scott Keogh, president of Audi of America Inc., said in an interview. "You can have wine on a plane and good food. Most people in business class don't care. They want to know was the plane on time? Was the seat comfortable?


I think Audi has the better read here.

4th Gear: Honda Not In A Hurry To Fix Recalled Vans


Remember those 344,000 Honda Odyssey vans recalled for surprise braking? Yeah, they're out of parts to fix them so recalls won't begin until May.

Per Dub Shep:

Honda told NHTSA it will not be able to fix the vehicles for more than four months. "Due to the large volume of new parts needed to repair owner's vehicles, the necessary parts will not be available until spring of 2014. As a result, owners will be informed of the potential existence of the defect in an initial notification letter. The initial letter will also include instructions to owners about procedures that they can follow to properly calibrate the (electronic) system to prevent an unintended braking event, as well as instructions about what to do if the event occurs while driving," Honda said.


So, yeah, try to avoid fiery death between now and then Honda owners!

5th Gear: Michigan Back To Selling Bonds


That whole Detroit Bankruptcy thing was an annoying distraction for the State of Michigan, which was unable to sell bonds until the market was unfrozen.

You'd think Michigan would be a bit of a shit show in terms of investment, but Bloomberg explains it's not as bad as all that.

Michigan has an Aa2 grade from Moody's Investors Service, the third-highest rank. The yield spread on the state's tax-exempt securities is 0.59 percentage point, or about 20 percent wider than the average this year, data compiled by Bloomberg show. The figure reached about 0.75 percentage point in August, after the Motor City filed the nation's biggest municipal bankruptcy July 18. In comparison, investors demand less than 0.1 percentage point of extra yield on borrowings of New York, with the same Moody's grade, Bloomberg data show. California, two levels lower, trades at a spread of 0.35 percentage point.



Reverse: Behold, The 108 HP 7.0-Liter V8!

On this day in 1979, hundreds of Iranian students storm the U.S. Embassy in Tehran, taking more than 60 American hostages. The students, supporters of the conservative Muslim cleric Ayatollah Khomeini, were demanding the return of Iran's deposed leader, the Shah Mohammed Reza Pahlevi, who had fled to Egypt in January 1979 and by November was receiving cancer treatment in the United States. After the student takeover, President Jimmy Carter ordered a complete embargo of Iranian oil.



Neutral: Are You Buying A Truck/SUV Anytime Soon? Would you? Do you care about fuel economy?


Photo Credit: AP Images

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