I don't know about the rest of you guys, but gas prices are still going up here in NC a full week AFTER Memorial day (which is usually our big weekend for price gouging due to beach trips, mountain trips, and summer vacations because school is out). Rumor has it that prices are going to keep inching up too.

I would like to hear you guys' opinions on TWO ISSUES, closely related...

1) How high do you think prices will go in the near future and why.
2) What impact are these prices going to have on performance vehicles offered for sale in the US?

Allow me to start us off...
1) I think we will see gas prices hit $2.40-$2.50 average before the election this fall. My feelings are based on the current administration and their lack of interest in doing anything to stop the price moving. I mean, they are not even asking for a congressional investigation into current pricing to look for inefficiencies, mixture problems, refining capacity issues, or just plain old price-fixing... nothing. There is currently a blind-eye being cast on this issue by the entire government. Funny, since this is the same government that is subsidizing gas prices in Iraq, paying $1.65 for it in Turkey and Kuwait, shipping it into iraq, and selling it there at $.05/gallon - paid for with our tax money too BTW.

There are other issues at play like the relations with Venezuela, unrest in the middle east, the issue with Saudi Arabia and their refining/export issues with terrorists creating them grief. I know our admin is not 100% of the problem, but they are not breaking their necks to stop it either.

Do you guys really think that specific blends and mixtures is creating capacity issues at refineries? Just wonder what the public opinion is there.

2)I DEFINITELY think we are about to see a tanking of "sports cars" as we know them. You are going to see some high-perf models "die on the vine" soon, kinda like the Marauder and even the GTO sales have been. It's not going to be the government or insurance companies that kill them either IMO, it will be the operating costs. When it costs $50 to fill-up a car, and it only goes 300 miles, that breaks down to $.17/mile for gas alone! I think the market is going to go away, leaving all the manufacturers to drop their persuit of huge horsepower engines. In my opinion, we are on the cusp of a mass-movement towards alternative fuels and hybrids, and that ain't where the 500hp ponycars are at right now.

FYI - check out this article (which spurred me to start this thread BTW)... Iraqis Paying 5 Cents a Gallon for Gas
"While Americans are shelling out record prices for fuel, Iraqis pay only about 5 cents a gallon for gasoline — a benefit of hundreds of millions of dollars subsidies bankrolled by American taxpayers. "
"In Britain, by contrast, gasoline prices hit $5.79 per gallon last week — $127 for a [average] tankful. "

With LS2 GTO's coming, SSR's, new Cobra's, Shelby's, Magnum's, 300C's and the like, I really fear for the future of these types of cars due to market erosion more than CAFE or insurance rates. Oh they will make a few cars like that, and somebody will always buy a few, but the market segment itself is sure to shrink considerably if you ask me.

So what do y'all think?

 

I think DoD will play a big part in keeping performance and gas mileage.

 

Seems to me that you can buy a 400hp car that knocks down 30mpg.

Where's the problem?

Trucks and SUVs will forever get bad mileage, simply because of weight.

The most we'll see out of this is some curtailing of that market.

Although I can tell you that it hurts to fill up my motorcycles, since both need premium.

The SS is still in pieces, so no issue there, and the Spaztek and Crapalier both take regular unleaded.

 

A 400HP 6 speed Vette or Camaro gets better milage than a 220HP Mazda 6

 

Isn't the LS2 supposed to improve on gas mileage compared to the LS1?

 

Yeah, as long as you drive it like an escort. Maybe thats why I never see guys with vettes drive fast.

 

I haven't heard much about 400hp cars hitting 30mpg steady yet...
I know the Cobra is getting 13-18 which ain't great IMO, and it's choking down a guzzler tax at the sale too.
Isn't GTO getting bitten with a guzzler tax?

Anyways, the "PROBLEM" as I see it is not that powerful cars don't get good mileage - I know they do. Heck, my '89 5.0 has all the power I need for daily duties and it gets 28 or so on average. But honestly, we were getting 30mpg or better with cars back in the '60's... so where have we gone from there mileage-wise?

The problem is that the "non-enthusiast" is going to start shopping for the economical alternative IMO. I just had a sales guy take me out for lunch last month in his new VW that was a turbo-D and he said it was getting over 45mpg average, not highway. The car was really nice inside too - I was impressed. He specifically stated that mileage was why he opted for that car over an Impala or Taurus (he had been previously driving a Taurus and his lease was up - time for a new sales-buggy). So there's one hit already... how many more will do the same, and when will that mentality spill over into consumer sales of sporty coupes?

If gas hits $2.50/g , how many folks are still gonna clamor to buy a Mustang or Camaro with a V6 that chokes on 30 mpg when they can buy hybrids or turbo-D's that get 50mpg for the same $ or less? And without the V6 sales to provide the sales volume, I don't think the SE's and top-dog cars will be cost-justified.

I mean, I agree with you in part - there will always be some sales of pony cars and SE's, but the landscape is BOUND to change IMO. The question is - How Much?

 

1. How high do I think gas prices will go in the future?

I'd say $4 to $5 per gallon within the next 12-18 months. At the risk of looking like I'm drifting into politics, We are now finding out here in California that Enron manipulated the price of energy here when California deregulated, and purposely created shortages, closed down power plants for "maintenence" (which turned out to be unnecessary or under false pretenses), and that not only was our vice president taking advice from these guys on energy policy, the administration rebuffed California's attempts to get a government investigation.

Well, at least, if we pay $4-5 per gallon for gas, it's going towards making individuals rich instead of fixing roads and eliminating that soon to be recession causing deficit.

2. What impact on performance vehicles? The rise in fuel prices alone won't do anything to performance vehicles. Over half of new vehicle sales are SUVs & Trucks. If anything, the big winner in all this is crossovers and vehicles like the Dodge Magnum. For the fuel concious, there's going to be cars like the Colbalt SS, Ion Redline, & Neon SRT-4. With LS2s running about 30 mpg, and all other V8 performance cars running in the upper 20s, and the fact that only 10% or less of the car market relates to "performance" vehicles, I'd say fuel prices alone will have zero effect on performance cars.

But, a high deficit will be far more damaging because this drives up intrest rates, and effects everything bought on credit. That alone is enough to cause a recession, since a slight rise in Fed rates mean banks will treat it as a green light to jack their rates even more. An economic recession will effect all buying. cars and trucks will be the 1st and hardest hit because in most all cases, they fall under "nice to have", not "NEED to have.

I can easily run with gas at $3 per gallon before I start walking to close destinations instead of driving, and probally $4 before I break out the bike once in a while. But I'm still going to get what I want if I get a new car. Right now that's GTO, the new Mustang GT, or even a Dodge Charger if they look good, run like the dickens, and doesn't have those retarted autolights my Camaro does.

However, if intrest rates go up past 10-12%, I'll simply keep the Thunderbird & Camaro and forgo a new car purchase completely till I need a new one (or a slightly used one).

 

What the heck were you driving? A Fiat 500? Even the VW Beetle got fairly lousy MPG by today's economy car standards.

Actually, $3.00/gallon is a real possibility in some states. Will it be the end of the world? Probably not, but it might mean some people rethink the idea of using 1/2 ton pickups as nothing more than commuter vehicles.

 

Holy sh1+ that's scary!
I could see us going into a full-blown recession again - quick.

Never mind the gasoline for cars and trucks...
Do you realize what that will do to heating and fuel oil costs?
What about fuel-fire industries like glass-makers and steel mills?

And we haven't even begun to mention the trucking industry yet?!?!

That's why I thought $5.79/gal in Britain was worthy of quoting.
Man, this whole thing is gonna get huge if we see that kind pricing here in the next 18 months.

PS - interesting that you noted the admin's reluctance to initiate any investigations or charges related to the energy scandal yet. I hold Duke Power stock, and watched it take lumps during that whole episode too, but at least we saw some changing of the guard inside Duke Power after the charges started to come in!

 

I've personally knocked down over 30 mpg in my SS.


What your analysis fails to take into account is hundreds and hundreds of pounds added to a car by Federal legislation. Structure has been added to the front and rear of cars, to the doors, catalytic converters have been added (along with a slew of other emissions equipment), seat structures are FAR more robust, cars now categorically come with shoulder belts in the rear seating positions, etc...

 

Drive an Escort like a Camaro and you won't see 30 mpg either....

 

I will eat my own excrement if gas goes to $5 in the US in the next 1.5 years.

Its going to stabilize around $2-$2.50 and stay there, probably for 5-10 years IMO.

Supplies are tight my friends. OPEC is already pumping at capacity.....Demand in China is growing faster than here, even though we use more in total numbers. Plus OPEC Member Venezuela's communist-leaning Castro protoge Hugo Chavez's generally loathing of the U.S. and therefore reluctance to increase production has slowed OPEC's reaction to the supply problem. But basically OPEC is at max production and until some capital gets infused into production capacity its not going to get any better.

Add to that the refineries who have doubled or tripled their margins over the last few years vs. 10 yrs ago....

If it starts to head toward $3/gal, you will see government intervention. I am talking about congressional inquiries and such. You will see states roll back gas taxes on a temporary basis, pressure on oil companies to reduce their margins, etc. All this will be in an effort to help the consumer, business which depend on transportation (are there any that don't) and generally protect our burgeoning economic boom from forces of inflation.

If you check this page daily http://www.bloomberg.com/energy/ you will note crude oil has dropped back to the $38/barrel range from a high of $42 last week. There are some price relief factors working to stabilize the price, but I expect it to continue to fluctuate up and down in the $2-$2.50 range nationally over the next decade.

I agree with GuionM to the extent the interest rate is going to go up, but only enough to stave off inflationary pressures. I expect to see .5 to .75 added to the prime rate by year's end. I don't see 10-12% rates anytime in the near future. Those are 1979-stagflation style rates, or 2004-My-Credit-is-Really Bad-rates.

I'd like to see us revisit drilling in Alaska to relieve the supply pressures to some extent. I don't want the US to burn up all its natural reserves but I also DO NOT agree with the calls to release oil from the Strategic Reserve. That oil is there to run our military and essential services in the even global oil supplies are disrupted in a massive way. $2/gal is an inconvenience, some will say a burden, but it would be short sighted to used up the SPR now and simply hope for the best.

Besides, any release from the SPR would provide only temporary relief as the effect on supply would be so small as to be merely symbolic.

 

That's rather a sweeping and ignorant statement.

The secret is the LS1/LS6 makes gobs of usable torque everywherein the RPM range and the vette has a low drag coefficient. Couple that to an M6 tranny and you can cruise at 70 mph with the engine barely revving above 1200 rpm.

Course, no-one drives like that all the time and I'm not adverse to laying it into it hard/ On average I see around 24-25 mpg during mixed city and highway drving in moderate to heavy traffic (commute) and 30+ pure highway.

 

But in reaction to the question at hand I don't see the sports car market suffering that significantly.

Those who can afford these cars can generally afford the gas, and like was said a V8 car gets far better mileage than a V8 SUV or truck. Large truck and SUV sales are down and will continue to be sluggish.

There may be some hit on fast cars, but as long as we have tall overdrive gears and DOD technologies hitting the market we'll be able to get decent HWY mpg out of performance cars.

The slowing demand for SUVs may actually help the coupe market some...