Dec 22 2008
Cars, credit and the Auto Industry.
Last summer during a youth softball game, I got to sit down with the wife of a local car dealer. We’d been happy with the Park Avenue we had purchased from them, thought the price was fair and the gas mileage is over 3o, so we were satisfied. She, on the other hand, had a hybrid Toyota. She was getting way more miles to the gallon than we were, but we hadn’t paid nearly what she did for her car.
“I got it before they got hot,” she said. “We were lucky because now you can’t find one anywhere.”
Oh, what a difference six months can make. Today, thanks to the credit crunch, hybrids are sitting on the lot. Toyota, in case you hadn’t heard, posted its first loss in 70 years. With few exceptions, vehicles are simply not moving off the car lots anywhere in the world.
It would be a huge mistake for the auto industry to take this to mean that people do not want a hybrid. A fool would think that since gasoline has gotten cheap again that therefore people aren’t willing to buy a hybrid. Not true. Lots of people would like to buy them. However, without credit to buy the cars, a lot of people can’t even pick up any car. And since the unemployment numbers are going up, and people are nervous about losing their job, few feel secure enough to take on more debt.
Hopefully the auto industry does not take a dim view of hybrids. People may not be willing to pay extra for any car right now, but most of that has to do with factors other than desire for the vehicle. Hopefully Detroit, if it makes it beyond the rough days today, will invest in better fuel efficiency for our future.
