It's Funny How Times Change.

joker

From The Dark Knight, 2008. Warner Bros.

 

Not funny “ha ha”, more funny as in “interesting”. I wrote an article for no one but myself in July of 2008 that is funny when I look back on it now, and I think you’ll agree. At the time, gas prices were exorbitant and people were fearful or $2.00/L gas. As a result, sales of small cars were up and truck/SUV sales plummeted, at least that’s what I heard from the news. Alberta seemed oddly immune. The situation everywhere but Alberta undoubtedly compounded the impact of the worsening economy on the Domestic 3, who were and are reliant on truck/SUV sales for a significant portion of their revenue.

This having been said, no one could have predicted the failure of so many banks, insurance companies, newspapers, and automobile manufacturers even just 6 months ago. Take a walk with me in my time machine back to July, 2008. My how times have changed.

 

 

The changing landscape as a result of $1.35/litre ($US 5.01/US gallon) regular grade gasoline in “Truck Country” Alberta, North America’s hottest economy.


North America (usually referred to as the United States of America, but actually includes Canada and Mexico) is in the midst of a perfect storm of macroeconomic factors that are drastically changing the automotive landscape. The Credit Crunch, the weak American Dollar, the soft housing market, and soaring fuel prices are some of the commonly listed culprits that automotive manufacturers rightly use to explain their slumping sales results. But these factors are not only effecting the automotive market, it is just that we as followers of the industry notice it here first. But it is not just impassioned car-loving zealots who are taking notice now; because a car or truck is the second largest purchase people make (after their house) and the industry employs so many people, the Market As A Whole, has woken up to the not-so-rosy reality.

And then there is Alberta, Canada; the oil-producing center of North America, with non-conventional oil reserves estimated to equal the conventional reserves of the rest of the world, or 1.6 trillion barrels. For as long as I have been aware of what kinds of vehicles are on our roads, I have observed that the majority of vehicles here have been trucks and SUVs. This was likely due to the relatively low price of gasoline and the inexplicable theory here that a man is not a man without the preposterous posterity of a truck. With so much oil industry-related revenue flowing into the province and ludicrously high paying jobs available to all in the Northern reaches of the province, it was not uncommon to see 20 year-olds with $80,000 trucks hooning around the city. This was all well and good when the price of a litre of gas was $0.40, $0.50, even $0.80/litre…


So Alberta sounds a lot like Dubai, or Abu Dhabi, or any of the other fantastically wealthy Emirates of the United variety, no? Not entirely. Gas is heavily subsidized in the Emirates and drivers there pay only about $0.35/litre. In Alberta right now, one can expect to pay closer to (gulp) $1.35/litre. Suddenly, something that gets 6 mpg and costs $150 to fill up every second day doesn’t seem so attractive here, even to cash-flush young hoons. So one would expect people to start looking for an alternative to the gas-guzzling monsters sitting on their drive-ways. Well the reality is that while many people are looking for more fuel-efficient vehicles, trucks and SUVs are still selling well; perhaps not as well as in the past 10 years, but the fact that such environmental insults are driving off the car lots at all is concerning. So while the automotive landscape might be changing, it is not as drastic here as it is in other parts of North America.


One of the problems seems to be that Albertans have an idea of a lifestyle that they would like to pursue and that idea persists despite fuel prices. The lifestyle I am referring to involves a cabin or cottage at least 300 miles from where one lives. This lifestyle also requires towing of quads, skidoos, seadoos, etc. with a truck large enough to tow a Navy Battlecruiser. It does not require an overactive imagination to realize that pursuing such a lifestyle requires nauseating amounts of fuel. The really odd thing is that people do not factor in the price of gas when they conjure up the “perfect getaway”, instead they simply absorb the price every time they fill up. Sure people might whine about the price of gas, but they whine about the weather too, and they whine about anything that is salient and superficial. But what good is whining if people are not changing their driving habits and purchasing decisions?


Another, more ironic, problem is that people here in Alberta do not feel “safe” unless they are four feet off the ground in a lifted truck that has blind spots large enough render midsize sedans invisible. The irony is that these “safe” vehicles are more prone to roll-overs in accidents than smaller vehicles with lower COGs. Until people here in Alberta come to terms with the reality of automobile safety, smaller, more fuel efficient vehicles will struggle with widespread adoption, even at current gas prices. It would likely take gas price parity with Europe (~$2.00/litre) to initiate a seismic shift to smaller cars. That is how strong the contorted mental image of safety and pride is here. And how much money people are making here.

Another issue is that of “choice”. Even if a shift to smaller vehicles were poised to take place, what would people buy? Where are the small car choices European consumers are presented with? Canada has maybe 10 viable choices in the small car arena, with each boasting a single engine option. Look across the pond and you will see over 100 viable choices, each with at least four engine options, two gas and two diesel. Perhaps it is time for automakers such as Fiat to make a resurgence back into the North American market and make small cars cool again, Mini can only do so much on its own! Ford also has huge potential with its Fiesta and Ka that are currently not available for the North American market. If we can get past the absurd idea that driving a truck, and only a truck, is cool, maybe we can mitigate our environmental impact and keep some money in our pockets when we go to fill up.

All of these ideas and statements are purely blasphemous in a province that is funded and governed by oil corporations. But I know that I am not the only one who thinks this, I am just one of the few who decided to criticize “Truck Country” in writing. Will you be brave enough to say something where you live?

One thought on “It's Funny How Times Change.

  1. LD says:

    I like truck
    I from Alberta

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