Gas prices dropping - will the demand wane?

I fear you are correct
Not because I don't want you to get a Prius though
I fear that as gas prices decline, people will forget their new found efficiency tricks and start guzzling more gasoline again.
Alternative fuels will become less sought after and SUV sales will increase once again.
Luckily for you, with your Prius, you will be better prepared for the next spike in oil prices.

 

Here in upstate NY, our gas prices have been typically much higher than the national average, but they have come down some in recent weeks. I'm curious as to what prices are like in your area. I just paid $4.11 the other day, but there is a gas war going on a few towns over where my wife works and it's down to $3.83.

I agree that I would hate to see people go back to the same bad habits if prices come down, but I doubt they are going to come down too much more in the near future. Just think, we all complained like mad when prices got over $3 a gallon, now we'd gladly pay $3.25 or $3.50.

I'm hoping supply will catch up with demand, allowing us all to get what we're looking for. And hopefully if Toyota ever does release the new Prius, perhaps more used ones will get to the marketplace at reasonable prices. Here, '07's` are going for no less than $24k and as high as $30K, maybe more. 6 months ago, I could have gotten an '06 for under $20K, probably should have done it. I'm going to wait until next year anyway. I can't bear to have two car payments at once and my wife's car is almost paid off. I'm just afraid if I get my Prius, she'll immediately want one too!

 

Looks like someone has lost perspective.

Sure, the spin will be a drop in demand. But in will only be a perception of bad. In reality, the current 15,000 monthly sales target is grossly exceeding the 15,000 monthly production. Returning back to that would still make Prius a popular vehicle anyway.

As each year progresses and the miles of owners increase, the reputation grows. In fact, most of the original misconceptions are dead now. And as we've witnessed in the past, sales actually increase when Prius become available without having to wait for delivery.

So, next year's significant production volume boost should make things very interesting.

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Sad part, IMO, is that this is part of a larger plan. Raise prices to a point where people start freaking out, lower them a little so they feel better and forget, and start raising prices again.

I remember when people flipped out over $2 gas, then it went to $1.50, then shot up to $2.50, and so forth. Now we're happy to pay $4 gas.

Unfortunately it'll probably work again and we'll be paying $5 gas soon and happy to pay $4.50.

The truth about your wait is that you might as well get on the list now. The line might go down but the wait time wont change from today.

let me explain. If you go to McD's and there's a 10 minute wait to get to the counter, you have a choice. You can wait the 10 minutes or come back later. If you wait the 10 minutes then you know you'll get your order in but you'll have to deal with wait. If you choose to come back later, say 15 minutes, and there's no line then you order right then, no waiting right? Wrong, you still had to wait, you just waited on your terms and not McD's. Kind of the same concept.

If the wait time for a prius is 3 months and you wait till the end of that 3 month period to buy your car, and hopefully get it that day, you still waited 3 months. But you roll the dice because you don't know what the economy will be like and how demand will effect sales. You could wait the 3 months and still have to wait 2 more. If you order you car today and gas hits $2 next week, you wont get your car any faster, you'll just be able to afford your SUV again.

 

Unfortunately people have very short memories - I already sense people thinking "gas at $3.50 = cheap". Of course less than 8 years ago it was $1.75 - did we get a 100% salary increase during that time? I must have missed mine, but looks like somebody somewhere did!! I still think a car that saves on gas, pollutes less, and has beaucoup high-tech creature comforts will have great resale value. And look for those gas prices to start creeping up again when we get near Labor Day - just by coincidence of course

 

There will continue to be a waiting list even if Toyota could make 10x what they say they're going to make next year. Even if gas prices dip temporarily, gas is still way to cheap, it will go up a lot. We *will* see $10 gallon gas in the next few years. Don't know exactly when, but it's coming and nothing will stop it. Gas was way to cheap for way too long.

 

I think that it is just basic human nature. The panic is over. People are accepting the fact that we will no longer have cheap gas. For those who operate on a logical basis (the minority) will seek out more efficient vehicles. For those who operate on an emotional basis (the majority) , they will buy the larger, heaver, less efficient vehicles.

As for the Prius, Toyota is having a parts shortage problem which currently limits their production. Toyota realizes that they are sitting on a gold mine and is attempting to ramp up production to meet demand. The problem is that you just can't build a new functioning production line over night. Consequently the demand for the Prius will remain strong until their is viable competition.

Keith

 

Unless we hit a depression scenario oil wont go below $100 for long. So don't worry guys. There is not the supply out there like it was in the '70s. Plus we have much greater demand growth in the rest of the world.

 

I would think when you hit January and folks are reeling from Holiday expenses and looking to pay taxes, Prius' will be easier to get and hopefully a bit less coin.

 

Regular unlead is $3.71 a gal. if you want E85 then it's $3.23 a gal. in zip code 42240.

 

I too fear there will be some people who will re-think their downsizing vehicle-wise. However, there will continue to be a demand for the Prius: 1) because of the low emissions, and 2) because most people buying Prii (it ain't cheap) could afford $4 gas, but was just not interested in buying as many gallons at that rate! I'm one of those in both camps.
What's sad is that so many Americans have decided that global warming isn't going to be such a big deal- no we need to drill for more oil to warm things up some more. Not that it will them much good- the big oil companies don't want to drill the wells anyway!

 

Many analysts are saying that the psychology has fundamentally changed, and people are going to change their buying habits to more economical cars even if prices come down. Detroit (and Toyota) seems to be banking on this, with the closures and retooling that they have announced to ramp up small car production and ramp down SUVs. This is likely to help drive the change, as the auto makers start to advertise their smaller cars more aggressively, buyers may follow.


I do hope that gas prices come down. There are an awful lot of SUVs out there, and I think it is better for everyone if people are allowed to retire them as they wear out over the next few years (and replace them with more economical cars) than if prices are so high that people abandon the SUVs in a panic. Hysteria in the marketplace is rarely a good thing for anyone.

However, I will also be very disappointed if people just return to their wasteful ways. If that happens, we will have more oil shocks down the road.

 

Gas prices aren't going down as much as the oil futures price--which has corrected about 15-20% the past few weeks. Gas prices are down about 5%. But they will shoot up very quickly if oil prices suddenly rise due to somebody coughing in the Middle East.
The oil futures price has become too speculative and volatile, and something needs to be done about it. Oil affects too many markets. It's about time both Obama and McCain came clean on the subject--along with that do-nothing Congress.

 

Totally true. Even if gas came down to $1.50 tomorrow, I wouldn't cancel my order for the Prius because I know no matter what, if such a thing happened, it would just be temporary. Since we're keeping our SUV for the occasional haul, tow, etc, if gas got that cheap again, I might be more inclined to use the SUV more often, but once it's old enough and used enough to be retired, it's out of there and not being replaced with another SUV...unless we have extended range EV only SUV's that can go 500+ miles on a charge but I don't expect that to happen for 20 years, and not ever should we go into an extended dark ages/post industrial/mad max civilization.

 

More like pathetic. Whether or not we have an influence on climate change has absolutely nothing to do with SMOG. More oil drilling without more SULEV/PZEV rated cars (like Prius!) will contribute to dirtier air.

Oil consumption needs to be reduced, period.

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That's what I was thinking. Also, there have been a couple of articles on that people are buying other high MPG vehicles since they can't get a Prius.

 

Folks, more oil drilling is an economic issue rather than an environmental one. More US production simply means that more of the US dollars spent on consumption remain in the US rather than going overseas to support and expand foreign economies. More US production doesn't mean lower prices in the US than current levels, just that the prices will be lower than without the additional supply. Smog production is directly related to vehicle miles traveled (VMT) and the percentage of low emission vehicles on the road, higher prices result in lower VMT and a greater emphasis on purchasing fuel efficient cars, which are also generally lower emission. The point is to buy time to change over supply infrastructure to support CNG, electric, etc. This takes time and isn't going to be done overnight.

Hybrids, such as the Prius, are the perfect crossover vehicle since they are capable of unlimited travel without major interruption (i.e., you don't have to recharge overnight for the next 40 miles) and the ICE can be converted to CNG if we get an adequate distribution system in place. I don't see any reason that the demand for the Prius, or similar hybrids will decline anytime soon. What is likely to happen; however, is VMT will increase as more and more people get rid of their 15 mpg vehicles and replace them with 45 mpg vehicles. That makes a $4.00 per gallon gas price effectively $1.33 in terms of perspective and total dollar expended.

 

Cars have turned us into crack addicts, that crack is the fuel we think we need to survive in this world. The price per barrel is not even an exact science and is merely only an estimate based on how much we will need in the future, lets say 5- 10 years, or really the time till next election. Don't look to far into gas prices, whether they dip or soar, historically they are rising and doing so at an unbelievable pace. Probably because we are draining a natural resource that belongs inside our little ecosystem called earth, and instead of remaining there we are pumping it out into our atmosphere, but it doesnt escape it lies there dormant contributing to increased anounts of carbon there and keeping more and more gases in our ecosystem, defeating the natureal co2 cycle...sorry for the science lesson, its important that we know the facts.