Autos in 2009 - Cheaper Gas to Hurt Hybrid Sales

In an economic climate as unsettled as this, even the bravest Nostradamus wannabes tend to get cautious. Very few saw this automotive meltdown coming six months ago and you can bet anyone with a reliable view into the future would be in high demand in Detroit, Tokyo and Munich. Thus, it is probably more determination than actual prognostication that sees me peering into 2009’s crystal ball.

Like almost everyone, I don’t expect the current low gas prices to last long. However, I do expect them to endure through next year and, considering most US consumers have short memories, I suspect that sales of trucks will rebound.
Actually, this one isn’t much of a stretch. Lost in all this talk of a paradigm shift in the form of a new automotive consumer is the fact that Ford’s F150 and Chevy’s Silverado are selling well. In fact, though their total sales are diminished, they are still the two best sellers south of the 49th parallel.

Gas-guzzling SUVs, on the other hand, will not fare so well. The “need” for a cargo hauling pickup is easily justified, but there are plenty of vehicles that can ferry the kidlets to grade school better than a Lincoln Navigator. The first autojournalist tests of the Chevrolet Volt will be successful.

Much of the skepticism surrounding GMs Electric Extended Range Vehicle involves its lithium ion batteries, which, no less an automotive authority than Honda has said are not ready for prime time. Nonetheless, the Chevrolet will shock the world with the first foray into this game changing technology.

GM will, however, be sweating bullets over the previous prediction as the fuel sipping sedan with an approximately $7,500 premium for its electronic gadgetry is a tough sell when gasoline is hovering between 70 and 80 cents a litre. In a perfect world, The General is probably hoping for a continuation of this cheap gasoline for all of 2009 so it can squeeze out as many pickup sales as possible and then betting on a gradual uptick in crude oil pricing as the Volt is being unveiled to the public.

It’s definitely wishful thinking, but it is in the realm of possibility. Honda will once again become a significant competitor to Toyota in the hybrid market . Not as high-tech as the Prius, its new Insight will be inexpensive, a huge boon in an economic climate as clouded as this. However, thanks to the glut of cheap oil swirling about, the Insight will take some time before hitting the 200,000 units Honda predicts it can sell in a year.

As for Nissan CEO Carlos Ghosn’s prediction of purely electric cars becoming 10% of the global automotive market. Hybrids have been around for almost a decade now and, despite the headlines they generate, they still account for only about 2% of the market. There will be pomp and circumstance every time someone introduces a new electric car, but sales of the battery-only-powered automobile will remain low for quite some time.