Consumers have proven it. We need a gasoline tax.David Welch
You heard a lot of hubbub after December sales results about how Americans went trooping back to big trucks because gasoline prices stayed below $2 a gallon for the third straight month. They did, sort of. The numbers showed that trucks accounted for 55% of all vehicle sales last month. Americans had been shifting back to passenger cars for most of the year as a result of fuel prices that soared over $4 a gallon in July. But it wasn’t a return to the really big gas hogs that made the flip-flop among car sales.
If you dig into the numbers, what really happened was a bit of a return to rational car buying. Sure, some buyers did go and get deeply-discounted Chevy Tahoes because gasoline was cheap. But the only part of the truck market that fared better than the overall vehicle market—which was down a rude 35%—was sales of crossover suvs. That makes sense. It would be great if everyone chose a compact that gets 35 miles per gallon. But most people need at least one car in the garage that hauls more people. For a family buyer, the most rational purchase is a crossover that fits five or seven people and gets mileage in the mid-20s.
The people who make a purchase that they will have to live with for six years based on this month’s gasoline prices are pretty silly. Someone who tries to shoehorn their family of five into a Toyota Prius when gas price top $4 may be as irrational as the person who buys a Chevrolet Suburban when pump prices sink as they have. The vehicle that lets you cart your crew in comfort without pain at the pump is a crossover. And there are 26 of them coming to market this year. The Kia Borrego is brand new, and it’s a pretty nice suv. Chevy has a new Equinox coming in a few months. It could be a big winner for GM. Those vehicles both come at the right time.
Of course, this isn’t good for reducing our use of oil. Nor does it support the green cause. While those crossover suvs are thriftier than, say, a Ford Expedition, they won’t really reduce our oil imports. And they come nowhere near meeting the fuel economy rules that California and the Federal Government are pushing for 2016. And hybrids? Now that cheap gasoline has exposed hybrids as a car for those who, as AutoNation CEO Mike Jackson said recently, “have a need to make an environmental statement and a desire to express it.” Until the math makes better sense, hybrids will be less than 5% of the market, Jackson says. Bottom line: Americans need a reason to go small or green. And only a gasoline tax will do it.