The month of July is a festive time in America. July is a time to relax, celebrate America’s independence, and partake on the Great American Summer Road Trip. Sadly, amidst America’s drawn out economic hardship the Great American Summer Road Trip has come to an end. July 2011 has listed the lowest gas sales for the month of July in a decade.
America’s gasoline production in July dropped 2.3% from one year earlier as a result of a lack of demand for gas. Analyst point their finger a at the, one ton elephant in the room, the poor American economy as well as the alternative fuel vehicle auto market. Chief Economist John Felmy of the American Petroleum Institute said,
Consumers aren’t spending, and jobless claims have increased, so it isn’t surprising gasoline demand was down and overall demand slipped a bit.
The month of July boasted an unemployment rate of about 9% while the U.S. gross domestic product (GDP) has been grinding to a halt for some time now– a GDP slowdown of 0.4% during the first quarter of 2011, a slowdown of 1.3% during the second quarter, and a slowdown of more than 2% during the last half of 2010.
There is quite likely decreased demand for driving vacations and other non-essential driving due to higher gas prices since late February and due to still weak economic conditions.
Along with the vanishing Great America Summer Road Trip seems to the vanishing of large gas guzzling cars and SUVs. There has been a surge of increased purchases in 4 cylinder and subcompact cars. In July the Chevrolet Cruze made up 10% of GM sales, the Ford Focus increased sales by 7.3%. All in all, the subcompact class of car accounted for 4.7% of U.S. auto sales during the first seven months of the year. Subcompact cars are uselessly priced under $20,000 and most can get close to 30 miles per gallon (mpg) under city driving conditions.
Subcompact cars do share the road with alternative fuel vehicles, a class of car with many models that can get well over 30 mpg. Yet, the alternative fuel vehicle market is not growing fast at all. While it is true that nearly all car manufactures are scrambling to make alternative fuel vehicles; and alternative fuel enthusiasts are buying this class of car, mainstream average consumers are not.
The major factor for middle class Americas looking to buy the next family car right now is the price of the vehicle and mpg. The Chevrolet Volt gets amazing mpg but has a high price tag, around $40,000. Meanwhile, the Chevrolet Cruze has decent mpg, close to 30 mpg under city driving conditions, and a price tag of under $20,000. Given the shakiness of the job market and increased price of necessities like food and cloths, the family buys the Cruze.
Who knows, with vehicles getting smaller, the evolving alternative fuel market, and high mpg becoming a key selling feature, in a few years the Great American Summer Road Trip might just be back on.
Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail.