Gas prices dropping - will the demand wane?

[Tom.from.PA]

Throwing this out there -

Prices are dropping around here, been close to .20 per gallon since its high back in the early summer, and its expected to drop further as the traveling season comes to a close.

Now personally, I'm hoping this happens but not for the gas savings, but for the reason that I may be able to finally get a Prius without the long wait. I'd like to think that a majority of people will now see the gas prices dropping, and the very inexpensive SUV's that are out there now will appeal to their instant gratification urge.

At least thats what I'm hoping, because I would love to get myself in a Prius before the years end.

Thoughts on this scenario?

[Zythryn]

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.

[emeticmedic]

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!

[TonyPSchaefer]

Nerfer usually whips out charts showing the direct correlation of gas prices and hybrid sales.

[john1701a]

Originally Posted by Zythryn

I fear you are correct

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.

.

[jammin012]

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.

[kcpistol]

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

[sorka]

Originally Posted by john1701a

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.

.

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.

[Tech_Guy]

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

[HomeandRanch]

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.