The Future Of Things To Come

As of May 8th, oil just hit a record $124+ per barrel. The president of OPEC and Goldman Sachs both see oil reaching $200 within the next two years, placing a gallon of gas at $5.00. Sadly, I do not think they will disappoint on that claim. In the 1st quarter of 2008, SUV sales plummeted 28% and sales of small cars increased 32%. Dealers are offering much less for SUVs as trade-ins, and some will not even consider them. The figures for the second quarter will be even more extreme.

Since 1997, Toyota has sold over 1,000,000 Prius's. The Prius also enjoyed a 1st quarter sales increase of 26%, and Toyota says they are keeping up.

CY 2009 may be an interesting year for hybrid and fuel efficient cars. Toyota is likely leaning toward a 1.8 liter hybrid for its 2010 model, with more horsepower and better fuel economy. Li-ion batteries are still an issue that may prevent it from being used just yet, but they are not far away...


Possible 2010 (MY) Toyota Prius from Popular Mechanics


Honda announced it will enter a new small hybrid car into the market for next year, which for a while has been dubbed the 'Prius-Killer'. At first, rumors said this would be a hybrid Honda Fit. However, Honda decided against this because of the Fit's already good fuel economy, and the popular appeal of a dedicated hybrid model like the Prius.

Honda mentioned the possibility of releasing the CR-Z concept hybrid, but likely will use the FCX Clarity, already set to release in limited numbers this year as a natural gas vehicle.


Honda CR-Z concept hybrid


Honda FCX Clarity


The release of such vehicles will pressure Toyota to appeal to consumers through either greater fuel efficiency, or vehicle affordability. While other hybrid models are available, none are a dedicated hybrid model like the Prius, and none have enjoyed the popularity of the Prius as well. The Honda Insight hybrid was the first to enter the market, but its small size was not practical for everyone.


Toyota is also testing a car that may compete with the Smart ForTwo. The Toyota IQ concept car received a lot of attention in Geneva, and Toyota is already planning to introduce it to the Japanese market for CY 2009. It received a 5-star Euro Crash Test Safety Rating. Whether it will be introduced in the United States depends on how well it performs in our rigorous safety tests, which includes a 35-mph side impact from a large SUV.

The IQ will be affordable, will seat 3 people and a child, and will get 'like-or-better' fuel economy as the Toyota Prius if the production model uses a motorcycle engine.


Toyota IQ


Either way, the only thing that is certain about the future is that gas will be hilacious. It seems the entire auto industry is finally realizing the market potential of economical cars.

Sources
fuelzilla.com/tags/toyota-prius/
Honda Global Subcompact Hybrid | Hybrid Cars
Honda CR-Z | Hybrid Cars
2009 Toyota iQ revealed (updated)

 

I did not elaborate that this was for the US market in particular. You are correct!

I respect your opinion as that could be a possibility. Perhaps I stepped out of place by saying gas prices 'for certain' will be hilacious. A better way to have stated this would be 'if trends continue, gas prices will be hilacious'. The US could start drilling in the ANWR, the US government could subsidize the cost of gas, maybe talk OPEC into increasing production, or many, many other possibilities. It is not a requirement for me that oil increases to fulfill a personal agenda, it is just that in my opinion the cost of oil will increase changing the US auto market to focus on smaller and more fuel efficient vehicles.

I also read the article that gasoline prices could drop 50 cents per gallon by spring. That is a major possibility, but $3.25-$3.50/gal instead of $3.75-$4.25 to me still isn't cheap.

My prediction that prices will increase (I could be wrong) is based on this: China's and India's economies are emerging and therefore the demand for oil is increasing as supplies hold steady. More and more people from around the world are buying cars, and as a result the supply of oil is being stretched thin. The current state of the US economy is a factor as well, but even a year ago when the economy was well, gas prices were still on the rise at an average rate of 50 cents/year.

Also from my own observation, the price of the barrel increases sharply, then recedes a little only to settle at a cost higher than it was before. Over a long period of time, the average cost of the barrel has only increased. I can't think of any time when the cost of the barrel rapidly declined, and then held at that price (although I could be wrong). There have been events in the past that have influenced the cost of oil to decline, but the oil market adjusts for itself and prices return to normal.

I think oil companies will act in their best interests, even at the expense of others across the world. Do I want gas to cost more? Absolutely not! I am driving a Pontiac GTO right now and I am paying $60 to fill up the tank! Of course I don't want to pay more. But I am also not an optimist, and therefore I do not see this problem of high gasoline prices going away.

The only hope I see to this is to reduce the amount of gasoline I consume. When the time comes for another car (and gas costs what it does now, or more), I will be trading in my GTO for a Toyota Prius or a Honda hybrid. I am hoping auto manufacturers can build me a car to mitigate what I'm paying for gas!!!