Wednesday, October 19, 2005

SUV Sales Slump

Bloomberg reports that Ford is showing a slump SUV sales in response to gas prices, possibly putting a crimp in earnings.

This appears to validate the trend for the industry, and it's probably just as well.

It may force the carmakers to make more fuel-efficient vehicles or cars that use alternative fuels like gasohol.

Before anyone accuses me of being a quiche-eating, dirt-worshipping treehugger, let me say there is a strategic reason for this (beyond the environmental concerns, which I do believe are valid).

The Chinese and Indian economies are growing at a phenomenal rate and with that growth comes a voracious, growing appetite for petroleum-based fuels. Within 10 years, we're going to be head-to-head with them for petroleum, with the product going to the highest bidder.

So it's a good time for us to be decreasing our dependency on petroleum now, by developing more fuel-efficient vehicles and alternative fuels.

And don't tell me it's too hard and too expensive -- gasohol (20 percent gasoline, 80 percent alcohol) is actually cheaper than gasoline and they're doing it in Brazil, where 80 percent of the vehicles can use either gasoline or gasohol.

Ethanol-based fuels also come from renewable resources -- you can make it from corn, wheat, rice, sugar cane, virtually anything you can make sugar from.

We should have started doing this years ago, but consumers were to complacent and didn't demand it, so the carmakers didn't do anything about it.

1 comment:

whit said...

Higher fuel prices may also get some heads out of the clouds as regards domestic exploration and production, nuclear energy, and other alternatives.