Auto Industry idiocy: Manufacture more gas guzzling vehicles
Brent crude hit $80 a barrel. Prices at the gas pump are hitting four-year highs. And now, with the U.S. exiting the Iranian nuclear deal, putting heavier sanctions on that nation, with Venezuela oil output at 30-year lows and tensions escalating in the Middle East, the prospects for $100-a-barrel oil in the near future are greatly enhanced.
It is estimated that when gas prices hit $3 a gallon in the U.S., it will siphon off some $30 billion of consumer spending that would have gone into the retail, restaurant and entertainment sectors.
With wages stagnant and core expenses increasing – and with almost half of American households unable to afford basics like rent and food – they don’t have money to burn on gas … and neither do average consumers worldwide.
And, with interest rates already rising, cars sales in the first quarter of 2018 vs. first quarter of 2017 were down 10.8 percent. These are all clear signs of an auto industry slowdown.
So how does an auto industry that has a historic track record over the past several decades of being off-trend and out of style respond to the core dynamics shaping the future?
No better example than the Ford “Edsel” Motor Company. By the year 2020, "Almost 90 percent of the Ford portfolio in North America will be trucks, utility and commercial vehicles," the company proudly proclaimed in their quest to build bigger gas guzzlers.
TRENDPOST: As our trend tracking analysis has shown over the years, the auto industry continues to baffle, with one mega off-trend strategic decision after another. While truck and SUV sales increase, as economic conditions deteriorate, as gas prices rise higher, the automobile OnTrendpreneurs™ will find a profitable future in filling the market gap of low-tech, high-efficiency, collision-durable vehicles that are anathema in today’s auto-world.