by Calculated Risk on 9/12/2005 01:11:00 AM

My latest post on Angry Bear is up: Gasoline: A Time for Caution.

And here is an interesting follow on article: Could Katrina kill the SUV?

Even before Hurricane Katrina tore through the southern United States, hampering a big chunk of the US oil industry, consumers were having second thoughts about gas-guzzling sport utility vehicles.

Katrina could now hasten the demise of the SUV, at least in its current guise, after years in which it has ruled the roost over the world's biggest auto market, analysts believe.
...
"Potentially, Katrina could signal the death knell of the SUV in as much as consumers are going to find themselves once burned, twice shy to buy such vehicles," Wachovia economist Jason Schenker said.

"High gas prices and the perceived fragility of the US energy sector are all likely to weigh on consumers' choices for years," he said.

Sales of big SUVs dropped dramatically in August, hurting both American and Japanese manufacturers, which have been trying to edge into the segment over the past five years

The headline is an exaggeration, but the automobile industry was in trouble before the hurricane and it is very possible that consumer preferences will change in response to higher gas prices (just like in the early '80s). The consequences for the automobile manufacturers and the US economy might be significant.

Best to all.