US: There’s no slowing down
It can’t be easy owning a Hummer these days. If you’re not being mocked in television ads, you’re cut off by hostile drivers or harassed by environmentalists. Jatinder Sehmi, owner of a junk-removal franchise in Maryland, had a hamburger thrown at his H2 recently.
“A friend of mine told me he had a car full of nuns give him the finger,” chuckled Leo Karl, of Hummer by Karl in New Canaan, Conn.
And to add insult to injury, a tank of gasoline will now run you at least $60.
But are these much-maligned Hummer owners regretting their purchases?
“It hasn’t slowed me down a bit,” said Dan Johnson, an H2 owner in Rohrersville, Md. “Nobody wants to see the price (of gasoline) at $2 a gallon, but you’ve got to take it with a grain of salt. You don’t buy this vehicle and expect it’s going to be cheap maintenance.”
With gas prices spiking near record territory (an average of $2.04 per gallon after Sunday’s survey showed the first nationwide decline recorded this year) and concern rising over oil imports from the volatile Middle East, it would stand to reason that Americans are about to ditch their Hummers and Suburbans for the modern equivalent of those oddities of the 1970s: the AMC Gremlin and Pacer, the Volkswagen Rabbit and the Datsun B210. There has been an uptick in small-car interest, especially in gas-sippers such as the Toyota Prius, which runs on gasoline and electricity, and some dip in large SUV sales. But more than likely, it’s going to take much more than a $60 tank of gas to chase most drivers to a Mini Cooper.
Since the price shocks of the 1970s, driving patterns have changed, commutes have lengthened, and family checkbooks have fattened. Even child car seat laws have conspired to keep families out of tiny Honda Civics.
‘There’s a lot of consumer sentiment bound up in the car they want,” said David Greene, a corporate fellow at Oak Ridge National Laboratory’s Center for Transportation Analysis. “If you have your heart set on a pickup truck to haul your mulch, it’s going to be hard to get you into a Mazda Miata. If you have six people in your family, it’s going be hard to get you to buy a car that seats four.”
Besides, Americans just like big.
“I am convinced Americans prefer to buy the largest car they can afford,” said Bob Casey, curator of transportation at the Henry Ford Museum in Dearborn, Mich. “If the largest car they can afford is a VW Rabbit, they will buy it, but if they can step up to something bigger, they will. It gets repeated again and again.”
The recent spike in gas prices is not trivial. Only once before--during a bleak stretch from 1979 to 1984--did the price of a gallon of regular gasoline top $2 (when adjusted for inflation). But automotive industry analysts caution that circumstances today are fundamentally different from the oil shocks that stemmed from the 1973 Arab oil embargo and the 1979 Iranian revolution. And even back then, the reasons for ditching a Chevrolet Impala for a Dodge Omni were more complicated than simply price.
Automotive historians look at the 1970s as a remarkable shift in consumer behavior, but the motivations were multiple. What had been a monolithic market for outsized autos had begun fragmenting by the mid-1960s. Pushed by the success of the Volkswagen Beetle, Chevrolet began selling its relatively small Corvair, Ford its Falcon, said Tom Libby, director of industry analysis at the Power Information Network, an affiliate of J.D. Power and Associates.
By 1970 and 1971, Ford was ready with the Pinto, and Chevrolet had the Vega.
But the Japanese automakers, Toyota, Honda and Datsun, began arriving on the market with cars that had the appeal of novelty, Greene said. Economy was secondary. And they secured their toehold just when the Arab nations slapped an oil embargo on the United States.
It was not so much the price of gas that pushed buyers into small cars as the gas lines that ensued when the federal government tried to hold prices down, Libby said. In today’s dollars, prices crested at $1.74 in 1974, according to the Energy Department’s Energy Information Administration.
“Long gas lines were this visible evidence to the consumer,” Libby said. “There was like a panic. People were going to the gas station with their tanks three-quarters full because they were afraid there wasn’t going to be any gas left.” The power of the Organization of Petroleum Exporting Countries proved to be ephemeral, but the cartel’s actions were such a shock that people were convinced life at the gas pump would only get worse, Casey added. Sales of “regular-size” Chevrolets--Impalas and Caprices--plunged from 857,204 in 1973 to 552,051 in 1974. Ford sales of LTDs and other regular-size cars dropped from 693,084 to 408,192.
Small-car sales fell as well, but by much smaller numbers. The Datsun B210 and Honda Civic--which could practically fit inside the passenger compartment of an LTD--actually shot skyward.
But that does not draw a complete picture. Even with gas lines snaking around city blocks, Americans loved muscle. In a year when total U.S. car sales fell 23 percent, sales of so-called specialty cars--Pontiac Firebirds, Chevrolet Camaros, Mercury Cougars and Ford Mustangs--rose in 1974 to 14.4 percent of the market, from 10.3 percent the year before. Mustang sales nearly doubled, from 145,168 to 277,075.
And Americans moved back to their big cars as soon as they could. With gas lines gone and prices falling, the small-car share of the U.S. market skidded from 40.9 percent in 1976 to 31.7 percent in 1979.
Then came the Iranian revolution, the taking of American hostages in Tehran, the Iran-Iraq war, and we did it all over again. Practically overnight, the small-car market share jumped in 1980 to a record 42.7 percent. In 1981, the nation’s top-selling car was the Oldsmobile Cutlass Supreme. In 1982 it was the Ford Escort. The nation’s long economic malaise helped push the trend to cheaper, smaller cars.
For Detroit, it was devastating. The Big Three automakers were ready, with a downsized General Motors fleet, the Chevrolet Citation and the Escort. But the Japanese were more ready, with Accords and Camrys that were simply better cars, Casey said.
This time, the consumer shift to Japan stuck. Only with the arrival in 1984 of the first modern sport-utility vehicle, the Jeep Cherokee, did Detroit see a future, Casey said. And sure enough, the small-car market-share slide soon began, from a peak of 43.8 percent in 1988 down to 22.9 percent today.
Will history repeat itself again? Not likely, Greene said.
``People do care somewhat (about gas prices), but there are two fundamental things that have happened’’ since the early ’80s, he said. ``Number one is, people have become wealthier, and the more money they have, the less they care about the price of gasoline. Number two, for new passenger cars, we’ve already almost doubled our fuel economy since 1975. That makes the fuel component a much smaller part of owning a car.’’
In 1975, cars and light trucks averaged 13.1 miles per gallon. Thanks more to federal regulations than consumer preference, cars now drive 24.6 miles on a gallon, although surging sales of SUVs and their 17.9-miles-per-gallon average have dragged down overall fleet efficiency from a peak of 22.1 miles per gallon in 1987 to 20.8 miles per gallon today.
In 1985, gasoline and oil represented 19.9 percent of the cost of owning and operating a vehicle, Greene said. By 2002, the gas-oil portion stood at 9.7 percent. In a 1997 paper arguing for tougher, government-mandated fuel-efficiency standards, Greene made the case that price would not encourage efficiency. He calculated that if you include the loss of performance and size, an additional five miles per gallon represents a potential savings of maybe $100 over the life of a car.
``In other words,’’ he wrote, ``the incentive to the consumer is ... on the order of the cost of a set of floor mats.’’
The other problem is driving habits, said Daniel Lashof, a senior scientist and energy expert at the Natural Resources Defense Council. If every SUV owner traded in for a passenger sedan, the nation would save enough oil to ditch the 2.3 million barrels of oil a day imported from the Middle East, Lashof said, but that is not likely to happen without government intervention.
Suburban sprawl has Americans driving farther, and traffic has them stuck in their seats, preferably Corinthian leather surrounded by a spacious SUV cab. In 1990, 30.5 percent of workers spent at least 30 minutes traveling to work, according to the Census Bureau. By 2000, 34.5 percent did. Between 1990 and 2001, total vehicle miles traveled in the United States jumped by 574,424, or 29 percent.
The number of commuters who carpooled, took public transportation, rode motorcycles or walked to work all fell significantly.
The one tangible sign of anxiety over gasoline usage appears to be the abuse being hurled at SUV owners, especially Hummer owners. The radical environmental group Earth Liberation Front boasts of a half-dozen attacks on SUV dealerships last year, including one in West Covina, Calif., that did $2.5 million in damage. The Web site FUH2.com encourages a center-finger salute to the vehicle, and HonkatHummers.com sells bumper stickers with its own prescription.
Not that the owners seem to mind. Said Karl: ``The true Hummer owners, the people most fervent about it, take it as a compliment. They’re individuals. They like to stand out in a crowd. That’s why they made the decision to buy a Hummer.’’