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Thursday, December 30, 2010

Runnin' On Empty

Runnin’ on Empty
The good ole days, remember them? Jumping in the V-8 coupe, and with Steppenwolf’s Born to Be Wild in the background, you got your motor runnin’ as you headed out on the highway. It was Saturday night. Gas was 35 cents a gallon. Your car was the center point of entertainment.

But this is now. 2010. Gas is pushing $3.25 in the hardest hit economic areas of the United States. Places like Upstate New York and my hometown of Detroit are injured again by the continuing rise in gas prices. And it is at $3.00 or more across the rest of the country. Is it artificially priced? I certainly believe so. Speculation and the increase of fuel usage in both India and China have created this current increase in oil prices and that has pushed our local prices pump prices way up. Speculation pushed prices up in 2008 as well. Remember those days?

This is very big country. According to Payscale.com, the average commute to work is 37.5 minutes. Americans naturally need larger, safer vehicles to drive coast to coast. This is not England or for that matter the rest of Europe. Look at this year’s sales increase in large SUV’s. Up 41% as announced today on CBS Radio; the most interestingly overlooked fact is that the small SUV is down 2.1% during that same time. This is not rocket science. We need bigger and more comfortable. We have families and extended families, business trips, vacations, kid’s baseball practice, and work. Try stuffing all that in a Prius.

We must remember that when the U.S. fell off the economic cliff in September, 2008, it was $4.00 gas that shoved the hardest. Confidence died and America stopped spending on anything. Our economy to this very day is still a big ugly rock. It will not move unless we push it with consumer confidence, lower bills and renewed spending. But that is just not happening, especially now. With gasoline hitting that “mental” mark of three bucks, we again start brown bagging more and we increase our visits to the grocery store. Most importantly, we stop spending on virtually anything else. This is again at the expense of a multitude of small businesses that include coffee shops and mid-priced restaurants. Small businesses suffer. And they are the ones who employ the majority of the workers. They are the heartbeat of America.

Now, I heard today that the reason the price of gas is skyrocketing is because of the stronger economy; the stronger the economy, the higher the gas prices.
If the economy is such a simple math game then why is that not adding up when we look at daily reality. What are these economists thinking?

Now, we are indeed at the cusp of an economic turnaround, but the rising price of gas will be the principal ingredient to keeping us where we are. This is a BIG deal. We drive less now. We drive less than we ever have before. Consumption is down. We combine trips and we carpool. Why? Because gas price increases come directly out of our wallet and our budgets. And the increases happen with real money in real time, more this week than last.

Gas prices are the biggest villain in the current hampering of the local economy. It is not about the big car or the SUV. It is not the car business this time. Drop gas back to $2.50 and the market will take off like a rocket making 2011 the “Year of the Comeback!”

As you pump that next tank and as you use your credit card because you do not have an extra 60 bucks in your pocket, remember it is because of the that stronger economy!


Jim Vogel is the owner and founder of VTR Consulting LLC; VTR is a motivational sales training company located in Apex, NC. Jim spent over three decades in the car business; first with Ford Motor Company, and then with Hendrick Automotive Group, before launching his small business to help make organizations more successful.
Visit www.vtrconsulting.com
http://twitter.com/salestherapist

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