Saturday, April 07, 2012

Fuel Economy Index for New Cars Sets Record


Wards Auto -- "U.S. new light vehicles achieved record fuel-efficiency for the third month in a row in March, according to the WardsAuto Fuel-Economy Index (see chart above).  Cars and light trucks sold in the month had a combined 24.1 mpg rating, a 1% improvement on the previous record set in February. It was the first time the index has risen above 24 mpg.

The new benchmark represents a 15% increase in fuel efficiency over the index’s base rating of 20.9 mpg, established in fourth-quarter 2007. March light vehicle sales signified a continued movement toward smaller fuel-efficient vehicles that dominated the first quarter.

Car companies have rolled out an increasingly large selection of small and midsize vehicles, including a growing number of hybrid and alternate-power vehicles that provide consumers interested in fuel economy greater choice than ever. Indeed, vehicles rated higher than 30 mpg on the index accounted for 11.8% of sales in March, up from 4.3% year-ago. The 270% increase was made possible, in part, by the increasing number of vehicles available in that category."

MP: Every time I think I'm aware of all of the economic indexes available, I find a new one like this. 

Perhaps this is a consumer response to higher gasoline prices?  Replacing a used vehicle getting 20 mpg with a new vehicle getting 24 mpg would completely offset an increase in the price of gas going from $3.33 per gallon to $4 per gallon, on an annual basis. 

105 Comments:

At 4/07/2012 10:12 AM, Blogger john_d said...

Mostly a response to CAFE standards, no?

 
At 4/07/2012 10:18 AM, Blogger Jon Murphy said...

Mostly a response to CAFE standards, no?

No. This index only looks at cars sold whereas the CAFE looks at fleet averages. This index shows customers moving towards more fuel efficient vehicles, which confirms a report earlier regarding increasing sales of fuel efficient vehicles, including record sales of the Prius and a 60% gain in Ford sales of vehicles with mpg rating +30.

 
At 4/07/2012 10:31 AM, Blogger Buddy R Pacifico said...

Automakers are working on incorporating vehicle sound systems to enhance mileage. Huh?

Ford and BMW are using the car sound system to enhance the engine noise of new three cylindar engines. U.S. consumers like the sound of a bigger engine, but will like the mileage of the three bangers.

BTW, 47% of 2011 new car sales in the U.S. were for four cylindar engines cars.

 
At 4/07/2012 11:07 AM, Blogger FloridaSteve said...

Believe it or not I think there has been a greater effect on the index from the gas guzzling truck segment than from the +30 mpg segment. Stay with me fore a moment.

I just bought a full sized, 4 door Ford F-150 truck with an "Eco-boost" engine. In days gone by my choices would have been either an anemic V6 (that would have been overtaxed by the weight of this truck thus loosing efficiency) or a traditional gas guzzling V8. As a modern option, Ford has developed an extremely efficient turbocharged V6 that gets fantastic mileage (I get 23 highway for real world use as opposed to the high tees of the past) and it performs just as well as the old V8.

I've read that ford will be going fleetwide with this concept. A v8 will become a turbo V6. A V6 will become a lighter turbo V4. And there's even a turbo 3 cylinder engine in the future to replace the traditional 4 cylinder.

All this without burning former bondholders or taking on the Federal Government as a partner. Go figure.

My larger point is that there is no Moors law for cars. We are reaching the limits of efficiency at the high MPG vehicles. But there is an immense amount of improvement yet to be realized in the heavy vehicle segments where the majority of us still live.

 
At 4/07/2012 11:08 AM, Blogger FloridaSteve said...

sorry for all the spelling errors up there... I'm not too sharp this morning.

 
At 4/07/2012 11:29 AM, Blogger Jon Murphy said...

Interesting though, FloridaSteve.

 
At 4/07/2012 11:50 AM, Blogger Rufus II said...

It only takes a few years of sales of more efficient autos to start making a difference.

About half of all miles-driven are from cars six years old, and newer.

 
At 4/07/2012 11:54 AM, Blogger PeakTrader said...

The U.S. has a comparative advantage in larger vehicles, which tend to be more profitable (U.S. automakers have been much less successful producing competitive smaller vehicles).

Here's an example:

2012 Truck of the Year Winner: Ford F-150

"It seems as though Ford's big marketing push with the EcoBoost is centered on fuel economy.
During our testing, the EcoBoost turned in almost identical numbers to the 5.0-liter V-8. Most consumers will look at that and think there isn't really an advantage to buying the slightly more expensive twin-turbo V-6 if the efficiency benefits prove negligible. Were the performance between the two the same, we'd agree, but the smaller engine's performance is closer to the 6.2-liter V-8's.

It's the combination of advancement in design, engineering excellence, efficiency, safety, value, and the performance of intended function that has earned the Ford F-150 the title of Motor Trend's Truck of the Year."

 
At 4/07/2012 12:01 PM, Blogger AIG said...

Every time I think I'm aware of all of the economic indexes available, a new one like this appears!

This has been available for a long time from the US gov (can't recall which agency has it). Their version has a lot more detail as well.

 
At 4/07/2012 12:11 PM, Blogger Mark J. Perry said...

Sure the government publishes
average fuel efficiency data but: a) it gets updated with a long lag (only available now for 2009), b) it's only available annually and not monthly, and c) it's not based on the new vehicles people are actually buying, only for the entire "fleet."

 
At 4/07/2012 12:11 PM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 4/07/2012 12:12 PM, Blogger PeakTrader said...

If a larger percentage of Americans can afford a 2012 Ford F-150 (or a similar vehicle) today than a new Ford Pinto in 1980, what does that really say about inflation (and interest rates) or real income?

 
At 4/07/2012 12:26 PM, Blogger Rufus II said...

Eventually, they'll wake up, and reduce the size of that engine by about 20%, and optimize it for ethanol (E85.)

That would deliver approx the same mpg, and power as they're getting now, but with a fuel that wholesales for over a dollar a gallon less.

 
At 4/07/2012 12:28 PM, Blogger Rufus II said...

Such a vehicle would likely sell like hotcakes in a state like Minnesota, where about one sixth of all gas stations sell the High Ethanol Blend.

 
At 4/07/2012 12:31 PM, Blogger Rufus II said...

I'm thinking of a "limited edition, optional" engine, of course - one that would be offered in those states with a robust ethanol infrastructure - kind of like what Honda does with their natural gas-powered Civic.

 
At 4/07/2012 12:41 PM, Blogger NormanB said...

Maybe someone can normalize the MPG improvement with vehicle cost. If a lot of this improvement comes from subsidies from the government then we are taking from Peter to pay Paul.

 
At 4/07/2012 1:07 PM, Blogger AIG said...

Sure the government publishes
average fuel efficiency data but: a) it gets updated with a long lag (only available now for 2009), b) it's only available annually and not monthly, and c) it's not based on the new vehicles people are actually buying, only for the entire "fleet."


There is another source which breaks it down into much greater detail, but I can't remember where I found it! I was looking at it just a few days ago too...but now I can't remember where.

When I find it, I'll forward it to you.

 
At 4/07/2012 1:16 PM, Blogger AIG said...

Found it. http://www.epa.gov/otaq/fetrends.htm

The "fleet vs sales" isn't really different. "Fleets" are the production numbers from manufacturers, which are directly related to sales.

 
At 4/07/2012 1:17 PM, Blogger morganovich said...

2 thoughts:

1. this notion "Perhaps this is a consumer response to higher gasoline prices? Replacing a used vehicle getting 20 mpg with a new vehicle getting 24 mpg would completely offset an increase in the price of gas going from $3.33 per gallon to $4 per gallon, on an annual basis."

has some flaws in it. buying a new car costs 30k. that's a big expense to save on gas. you wind up breaking even on gas (higher price, lower consumption) but paying 30k to do it. that's a lot of money to pay to stand still, no?

2. i am not sure to what extent they are shifting the whole average, but the way that mileage is calculated or hybrids electrics, etc is very different from the way it is calculated for gasoline only engines. this skews their epa reported mpg much higher that will really be experienced driving them. this is unquestionably skewing overall mpg for new cars higher, though i have no idea to what extent or even if the effect is material. anyone looked at that data?

 
At 4/07/2012 1:31 PM, Blogger jorod said...

I'll run right down and buy one of those overpriced tin cans. And what is the fatality number doing?

 
At 4/07/2012 1:59 PM, Blogger Benjamin said...

Florida Steve-

I like your comments, but I think higher mpgs yet are on the way for everybody.

If the price signal tells people to use less, they will use less.

The PHEV, or CNG and LPG cars could cut gasoline use sharply as well.

I actually think the Chevy Volt is technical genius, but perhaps too early for commercialization. Also, I don't understand why GM introduced the Volt in the mid-priced segment, rather than in the luxury group (where they used to into new technologies).

A Cadillac that allows you to snub smelly gasoline stations. The extra cost of the battery is about the same as a leather seat option ($5k) and fancy sound system.

Sheesh, there are $70k BMWs selling everywhere in L.A.

If the USA ever starts to tax gasoline, look for mpgs to go over 50 mpgs. Ford's luxury Lincoln MKZ gets more than 40 mpg already.

Plenty of technically possible solutions out there as we speak, and many are working commercializing higher mpgs. There is only good news ahead on this front.

 
At 4/07/2012 3:20 PM, Blogger OBloodyHell said...

>>> Replacing a used vehicle getting 20 mpg with a new vehicle getting 24 mpg would completely offset an increase in the price of gas going from $3.33 per gallon to $4 per gallon, on an annual basis.

Doc, unless you are ALREADY in need of a replacement car, this is totally defective reasoning.

It's really not hard to calculate fuel savings for the car in question.

The typical driver drives somewhere between 10k and 12k miles a year. The typical car owner owns their car for 5.5 years, as of the last time I checked -- let's assume with a down economy we extend that to 7 years.

So, the driver is going to drive 70k to 84k miles in that time frame.

@ 20mpg, that's 3500 gallons to 4200 gallons.

@ 24mpg, that's 2916 gallons to 3500 gallons.

Let's use the higher figure for both, just to err on the maximum side of things. That's a savings of 700 gallons.

Let's also assume the price of gas hasn't topped out, and that it goes all the way to US$5 per gallon.

So they just spent, what, US $12,000 to US$30,000 (thanks to cash for clunkers, vaguely decent used cars aren't cheap) for a used car, or for something new (a Kia Forte, with 23/31 mpg, is $19500), in return for a savings over seven years of $3500, or about $500 a year

The price of gas simply does not justify, economically, replacing a car under ANY circumstances -- seriously. Even with US$10/gallon european prices, your savings in the spec'd case would only be $1000 a year. Even if you vastly improve your fuel economy, going from a 20mpg car to a 40mpg car, WITH the $10/gallon price, you're saving only $20k, which is at best the cost of the car. And that's with a LOT of ifs -- IF the price was $10 for the ENTIRE enhanced 7y term of ownership, IF a 40mpg car can suit your transportation needs (cargo, people carried, and so forth).

Q.E.D. -- This is basic numbers -- if you're one of those people who puts 50k miles a year on your car, then things might be different, but for the vast majority of car owners/users, gas prices should have little to do with the decision to replace a car, though they can certainly affect your choice of what to replace it with.

 
At 4/07/2012 3:25 PM, Blogger OBloodyHell said...

Note that I'm not claiming that people aren't buying cars in response to higher gas prices, only that it's based on economically defective reasoning.

One can see the number of idiots still having faith in collectivist government to know how many peoplea re capable of economically defective reasoning.

I pointed out the above numbers to someone who likes to go to the trouble to convert waste oil to fuel, and has modified his car to run it. His response was that a Prius owner is making a statement. My reply was, "If you want to make a statement, buy a freaking billboard. Cars are for transportation."

;-)

 
At 4/07/2012 3:32 PM, Blogger AIG said...

We're talking about the margins here; gas prices affect car choices at the margins. People upgrade cars for many reasons, and one reason that certainly is taken into consideration is the fuel economy of the car. You're assuming that fuel economy is the only, and primary, reason for upgrading a car. Of course its not, but no one is claiming it is.

 
At 4/07/2012 5:40 PM, Blogger Jon Murphy said...

OBloddyHell-

I think you may be misunderstanding what's being said here: The statement being made by Dr. Perry is not that people are buying new vehicles because of gas prices, but gas prices are affecting the types of new cars people buy.

 
At 4/07/2012 6:59 PM, Blogger kmg said...

nd what is the fatality number doing?

It is going down even faster than fuel efficiency is rising.

Good news all around.

$4 gas is actually a net cost saver, since it prices out teenagers and other marginal drivers, who are a disproportionate contributor to accidents. Each major accident probably costs $2M in police, hospital, court, etc. costs.

Automobile deaths have plummeted.

 
At 4/07/2012 7:00 PM, Blogger kmg said...

Back in the early 90s, even sports cars like Firebirds and Camaros had just 140 hp off a V6 engine.

Today, even many V4s are that much. And new sportscars (Camaro, again) have 330 hp or more from a V6.

The sportscars of even 20 years ago had pathetic horsepower compared to even family sedans of today.

 
At 4/07/2012 8:46 PM, Blogger Glenn Jericho said...

"Cars and light trucks sold in the month had a combined 24.1 mpg rating..."

Or roughly the same mileage as a Ford Model T.

 
At 4/07/2012 8:50 PM, Blogger Jon Murphy said...

Or roughly the same mileage as a Ford Model T.

But with many more features. Now that's what I call progress.

 
At 4/07/2012 11:05 PM, Blogger PeakTrader said...

Glenn Jericho says: "24.1 mpg...Or roughly the same mileage as a Ford Model T."

"The Model T had a 177-cubic-inch (2.9 L) four-cylinder engine producing 20 hp for a top speed of 40–45 mph... had fuel economy on the order of 13–21 mpg."

How to start a Model T: "The crank handle was cupped in the palm, rather than grabbed with the thumb under the top of the handle, so that if the engine did kick back, the rapid reverse motion of the crank would throw the hand away from the handle, rather than violently twisting the wrist or breaking the thumb."

"A Model T could not climb a steep hill when the fuel level was low. The immediate solution was to climb steep hills in reverse."

 
At 4/08/2012 2:12 AM, Blogger Ron H. said...

"Eventually, they'll wake up, and reduce the size of that engine by about 20%, and optimize it for ethanol (E85.)

That would deliver approx the same mpg, and power as they're getting now, but with a fuel that wholesales for over a dollar a gallon less.
"

Don't you ever get tired of posting this nonsense?

 
At 4/08/2012 3:18 AM, Blogger Jet Beagle said...

peak trader: "The U.S. has a comparative advantage in larger vehicles"

You used the Ford 150 as an example. If the U.S. had a comparative advantage in light trucks, then Germany, France, Japan, and the rest of the world should be importing light trucks manufactured in the U.S. I don't think that is happening in any large numbers.

The U.S. slaps a 25% tariff on imported light trucks - a tariff in place since 1964. Do you think that tariff might explain why the U.S. hasn't imported many pickups, vans, and SUVs? and might exp[lain why those light trucks have been so profitable for U.S. automakers?

 
At 4/08/2012 8:07 AM, Blogger VangelV said...

March light vehicle sales signified a continued movement toward smaller fuel-efficient vehicles that dominated the first quarter.

A few thoughts.

First, smaller cars are much cheaper to purchase in addition to being more fuel efficient. Given the fact that Main Street is feeling the effects of the economic contraction far more than is being reported it would not surprise me that ordinary families who can afford to buy a new car or can finance a purchase are trying to save money.

Second, the data is being corrupted by the way that hybrid and plug in electric vehicle mileage is calculated. That should also not be a surprise because the government is good at manipulating data to serve a political narrative no matter which party is in office.

Third, there is a simpler answer. All the companies have to do is to adopt the use of diesel engines, which are far more efficient. The reason for less reliance on diesel in the US has primarily been due to regulations.

 
At 4/08/2012 8:20 AM, Blogger rjs said...

room for improvement:

http://grist.org/list/four-cars-built-by-teenagers-that-get-over-1000-miles-per-gallon/?postpost=v2

 
At 4/08/2012 8:30 AM, Blogger VangelV said...

room for improvement:

http://grist.org/list/four-cars-built-by-teenagers-that-get-over-1000-miles-per-gallon/?postpost=v2


The discussion is about cars that are useful for families and protect their drivers, not gimmicks.

 
At 4/08/2012 8:30 AM, Blogger Jon Murphy said...

First, smaller cars are much cheaper to purchase in addition to being more fuel efficient. Given the fact that Main Street is feeling the effects of the economic contraction far more than is being reported it would not surprise me that ordinary families who can afford to buy a new car or can finance a purchase are trying to save money.

Second, the data is being corrupted by the way that hybrid and plug in electric vehicle mileage is calculated. That should also not be a surprise because the government is good at manipulating data to serve a political narrative no matter which party is in office.

Third, there is a simpler answer. All the companies have to do is to adopt the use of diesel engines, which are far more efficient. The reason for less reliance on diesel in the US has primarily been due to regulations


The average transaction price of light vehicles rose to an all-time high and the incentives have fallen to near record lows, so I don't think this is an income substitution issue.

This data is coming from Wards, an industry group, not the government. Additionally, electric and hybrid cars represent a very small amount of vehicles sold in America. Their affect on the average are very minuscule.

Diesel gasoline is much more expensive here in the States then elsewhere. If we were to adopt diesel, even with its increased efficiency, the cost of fuel would still increase, thus why diesel is not widely used here in the States.

 
At 4/08/2012 8:35 AM, Blogger juandos said...

"then Germany, France, Japan, and the rest of the world should be importing light trucks manufactured in the U.S"...

Well you know jet beagle this is purely anecdotal on my part but in countries like Germany, Italy, France, and Norway I have seen how larger vehicles have a very hard time in the cities, especially the older parts of those cities...

I also saw similer problems in Japan, again in the older parts of Tokyo and Hokaido...

There was just to little space to park them and in some case even to drive them...

 
At 4/08/2012 8:36 AM, Blogger VangelV said...

The average transaction price of light vehicles rose to an all-time high and the incentives have fallen to near record lows, so I don't think this is an income substitution issue.

We are talking about substantially lower prices for small vehicles. People who have lower incomes are likely to buy the cheaper cars.

This data is coming from Wards, an industry group, not the government. Additionally, electric and hybrid cars represent a very small amount of vehicles sold in America. Their affect on the average are very minuscule.

Wards uses the EPA data and the EPA mileage calculations are obviously incorrect for both hybrids driven under normal conditions and for electric vehicles.

Diesel gasoline is much more expensive here in the States then elsewhere. If we were to adopt diesel, even with its increased efficiency, the cost of fuel would still increase, thus why diesel is not widely used here in the States.

Why would it be more expensive? All you have to do is to import the engines as you import many other parts and products. While your other point is true it is not the reason why diesel is not being used extensively in the US. It comes down to the regulatory environment.

 
At 4/08/2012 8:57 AM, Blogger Rufus II said...

Diesel isn't the answer. You only get twelve to thirteen gallons of diesel (as opposed to approx 22 gallons of gasoline) from a barrel of Crude. And, That is from a barrel of light sweet. You get considerably less from the Heavy oil that is increasingly replacing the L/S grades.

If the U.S. went on a "diesel car" binge the cost of diesel fuel would surely rise even faster than that of "gas."

The answer will be to "phase out" our total dependence of All fossil fuels.

 
At 4/08/2012 9:30 AM, Blogger PeakTrader said...

Jet Beagle, I agree with Juandos, and add that in Germany, France, and Japan, incomes are lower and gasoline is higher.

More full size Japanese pick-ups (e.g. the Toyota Tundra) may be sold in the U.S. than in Japan.

There are many differences between the U.S. and other countries:

Why U.S. Automakers Don’t Sell Cars in Japan
Dec 21, 2009

"Owning a car in Japan is very expensive. Between expensive mandatory inspections (known as shaken), high gas prices, exorbitant parking fees, and registration costs, many Japanese consumers rely upon public transportation.

The Japanese consumers who do buy vehicles try to limit their costs. In other words Japanese consumers favor very small, inexpensive cars. The best-selling car in Japan in 2008 was the Suzuki Wagon, a 2,100 lb “minivehicle” with a 92 hp 1.3L motor."

 
At 4/08/2012 12:49 PM, Blogger AIG said...

Additionally, electric and hybrid cars represent a very small amount of vehicles sold in America. Their affect on the average are very minuscule.

Now now. VangeIV is trying very very hard to show why this is all a government lie, as usual. Don't burst his bubble. He thinks the 3,000 electric cars sold this year are what affects this number. (PS: The way hybrids are calculated isn't an issue, since they work exactly like every other car in that they have only 1 source of potential energy; the gas pump)

All you have to do is to import the engines as you import many other parts and products. While your other point is true it is not the reason why diesel is not being used extensively in the US. It comes down to the regulatory environment.

That's not true (as usual). There's plenty of diesel engines in the US; all trucks have diesel. There are many reasons why diesel engines have not penetrated the US car market, ranging from them being more expensive, to them being uncompetitive in terms of performance up until very recently. There's plenty of diesel cars available in the US; people just don't buy them as much.

The point being that there are LOTS of real-world reasons why things happen, that don't require a ridiculously stupid 1 dimensional explanation from Mises dot com, which is always "the government did it!"

Wards uses the EPA data and the EPA mileage calculations are obviously incorrect

Rock solid argument there, as usual.

 
At 4/08/2012 1:58 PM, Blogger Don Culo said...

I will not let Obama and his socialist regime dictate my driving habits !!!

I will keep driving my 1975 Ford truck with the 390cu/in engine and it's four barrel holly
carburetor !!!! (Of course I still fly my confederate flag)

Fuel injection is for liberal democrats, socialist and communists !!!!

I love the smell of a fuel rich Holly four barrel in the morning.

Those new vehicles with computers and sensors are Un-American and should only exist on cheaply made rice burning Japanese vehicles.

My exhaust system with NO catalytic converter sounds great, without a foreign built sound system.

My truck was built by the best workers in the world, The United Auto Workers of America !!!

UAW...UAW......UAW.....UAW

 
At 4/08/2012 6:28 PM, Blogger VangelV said...

Now now. VangeIV is trying very very hard to show why this is all a government lie, as usual. Don't burst his bubble. He thinks the 3,000 electric cars sold this year are what affects this number. (PS: The way hybrids are calculated isn't an issue, since they work exactly like every other car in that they have only 1 source of potential energy; the gas pump)

You are missing the point. The government claims are way off. First, while the electric vehicle market is small the true mileage is probably less than one third of the reported figure. Second, the hybrid data is not as bad but is still terrible. If we use the Prius as an example, Consumer Reports shows that the real world mileage is around 44 miles a gallon rather than the 55 mpg that the government is reporting. Third, diesel is still the better option. A VW Jetta gives you around 50 mpg in real world conditions. That is better than the Prius. If you want a luxury vehicle you can still get a E320 BLUETEC sedan that will give you around 30 mpg in typical driving conditions.

The bottom line is that the numbers are not very good and that diesel is still a better and more economical option than hybrids or electric vehicles.

That's not true (as usual). There's plenty of diesel engines in the US; all trucks have diesel.

But it is true. Diesel engines are not more expensive in the US than they are in other countries. The slightly higher price over gasoline engines can easily be paid for by the savings from getting better mileage within a year or two. Trucks use diesel engines because they are more economical.

There are many reasons why diesel engines have not penetrated the US car market, ranging from them being more expensive, to them being uncompetitive in terms of performance up until very recently. There's plenty of diesel cars available in the US; people just don't buy them as much.

No, if you talk to the car companies they will tell you that they would have loved to bring in diesel vehicles in the US. But they couldn't because the emission standards in the US were tougher than those in Japan, Europe, and elsewhere. Because of the regulatory environment they stuck with gasoline powered vehicles.

The point being that there are LOTS of real-world reasons why things happen, that don't require a ridiculously stupid 1 dimensional explanation from Mises dot com, which is always "the government did it!"

Mises dot com? I was thinking more of the arguments made by Epstein or Yandle as well as the well documented analysis in the automobile magazines, popular mechanics, etc. I suggest that you actually do some reading because what you think you know is actually wrong.

 
At 4/08/2012 8:56 PM, Blogger Jet Beagle said...

peak trader and juandos,

Do either of you understand what I was arguing? Peak Trader said that the U.S. has a comparative advantage in producing large vehicles. Assuming that Peak is using the economic definition of "comparative advantage" that implies that the U.S. would be able to exchange its pickup trucks and other large vehicles for goods produced by other nations.

Of course, I really didn't think Peak was using the economic definition of the term. I was hoping he would explain what he meant when he used the words "comparative advantage".

In any case, the U.S. really has no advantage, absolute or comparative, in the production of pickup trucks. The reason such trucks are not imported into the U.S. in large numbers is simple government intervention in the free market - the 25% tariff on imported light trucks.

Other nations most definitely produce and consume light trucks. Some historians believe it was the threat of Germany's Volkswagen light trucks and vans to the UAW which caused LBJ to initiate the light truck tariff in 1964.

 
At 4/08/2012 9:18 PM, Blogger AIG said...

First, while the electric vehicle market is small the true mileage is probably less than one third of the reported figure. Second, the hybrid data is not as bad but is still terrible. If we use the Prius as an example, Consumer Reports shows that the real world mileage is around 44 miles a gallon rather than the 55 mpg that the government is reporting. Third, diesel is still the better option. A VW Jetta gives you around 50 mpg in real world conditions. That is better than the Prius. If you want a luxury vehicle you can still get a E320 BLUETEC sedan that will give you around 30 mpg in typical driving conditions.


So you accuse me of "missing the point", yet you go off on a completely unrelated ramble. Lets analyze your dribble point by point:

1) The electric car mileage is quite irrelevant, since they represent a tiny fraction.
2) You are clearly incapable of comprehending how a comparison is made: assumptions go into every comparison, and all products are compared based on the same assumptions. Those assumptions are clearly laid out for you to read, whether you are capable of or not. Hybrid cars are compared based on some assumption of use...not your "real world" performance. That doesn't mean the comparison is lacking. Not at all.
3) Whether diesel is a better option or not is quite irrelevant to the figures. What does that have to do with your ridiculous rambling of "the government is lying"? A VW Jetta may indeed easily get 50 mpg in "real world" conditions, but the same goes for dozens of other gasoline cars of today as well

So, the conclusion is, learn to READ the assumptions of a comparison, first, before accusing someone of "lying". If you are incapable of doing so, then please go away.

The bottom line is that the numbers are not very good and that diesel is still a better and more economical option than hybrids or electric vehicles.

That's great. You're a genius. Not only are you the greatest economic mind in the world, you are also an astonishing automotive engineer, AND, car critic. Mises dot org must be lucky to have you as a regular contributor.

But it is true. Diesel engines are not more expensive in the US than they are in other countries. The slightly higher price over gasoline engines can easily be paid for by the savings from getting better mileage within a year or two. Trucks use diesel engines because they are more economical.

Again, listen to me. You're NOT smart enough to understand how engines work. Listen to me. You're NOT smart enough.

Diesel engines, for the most part, become more economical only under certain circumstances, like driving 400 miles a day. That is why trucks use diesel, while commuter cars do not. They are not more economical for cars which do not require the performance of a diesel. Diesel engines are catching up in this category, but the developments have only been very recent. Diesel engines for cars only provide marginal better mpg performance; you may gain 5-6 mpg over the same baseline car model and use patter. However, you also lose 30-40hp and a more expensive engine.

Again, you have to understand that "things" have advantages AND disadvantages. Depending on your use pattern, one outweights the other. For example, if I drove a Prius at max speed, I would get worst mpg than a BMW M5. Now, HOW do you think people make ECONOMIC decisions based on their "real world" needs, and reach conclusions different from yours? I know that in your Mises dot org universe, decisions are 1 dimensional, and always reach the conclusion of "its the government's fault!"...but do you THINK that people in the market can, and do, make economic decisions based on their actual use patterns, and reach the conclusion that their gasoline-powered cars are better for their needs than a diesel-powered car?

 
At 4/08/2012 9:20 PM, Blogger AIG said...

No, if you talk to the car companies they will tell you that they would have loved to bring in diesel vehicles in the US. But they couldn't because the emission standards in the US were tougher than those in Japan, Europe, and elsewhere. Because of the regulatory environment they stuck with gasoline powered vehicles.

Well of course they would have loved to. There's more money to be made. But again you are making up a BS version of reality. Diesel-engined cars are available in the US. There's plenty of models to chose from. Yet people don't buy them. You're not comprehending that this IS a market decision.

Mises dot com? I was thinking more of the arguments made by Epstein or Yandle as well as the well documented analysis in the automobile magazines, popular mechanics, etc. I suggest that you actually do some reading because what you think you know is actually wrong.

Last time I checked, Mr. Epstein wasn't an automotive engineer. He is a lawyer. So his opinion, as important as it may be on other subjects, is quite irrelevant here (besides, isn't Epstein the DEVIL himself for you? I mean, he calls your brand of "libertarianism" delusional)

Second, you're stuck in 1975. But then what's new. All the arguments of why diesel didn't come to America bla bla bla all date back to the 1970s, and are just a cliche. Decades have passed since then, countless diesel models are available in the US market, and countless times automotive companies and others make the claim that they are better and should be bought over gasoline. Yet CONSUMERS continue to chose gasoline version of the same cars which are also available in diesel...and all you can say is "well back in 1975 the US regulations were stringer than in Europe, that's why!".

Lets take the VW Jetta. I can buy a diesel Jetta, or a gasoline Jetta, in the US, anytime I want. Which do consumers prefer? Simple question, with a simple answer, which has nothing to do with US regulations from 1975.

 
At 4/08/2012 10:04 PM, Blogger juandos said...

"Do either of you understand what I was arguing? Peak Trader said that the U.S. has a comparative advantage in producing large vehicles. Assuming that Peak is using the economic definition of "comparative advantage" that implies that the U.S. would be able to exchange its pickup trucks and other large vehicles for goods produced by other nations"...

Well jet beagle maybe your original statement threw me for a bit but my own observations still stand regardless of whether US light trucks are at an advantage wether the reason is economic or a better engineered vehicle produced at a lower price regardless of the tariff nonsense...

Again this is merely anecdotal but some people I know who've been in the NGO racket for a long time in the African countries of Kenya, Uganda, and Tanzania tell me that Suburbans hold up better and longer than Toyota pick-ups or Brit built Rovers...

The Suburbans cost somewhat less than either the Toyota pick-up or the Rover over there in Africa but the cost of the bribe makes the importation of Suburban generally prohibitive unless there's direct government to government intervention...

 
At 4/09/2012 1:23 AM, Blogger PeakTrader said...

Jet Beagle, so, you don't believe the U.S. has a comparative advantage producing large vehicles, while other countries have a comparative advantage producing small vehicles?

 
At 4/09/2012 2:12 AM, Blogger Ron H. said...

"The Suburbans cost somewhat less than either the Toyota pick-up or the Rover over there in Africa but the cost of the bribe makes the importation of Suburban generally prohibitive unless there's direct government to government intervention."

And that bribe - I mean tariff - required to import a truck or SUV into the US is why US made trucks have an advantage.

 
At 4/09/2012 5:08 AM, Blogger Jet Beagle said...

peak trader: "Jet Beagle, so, you don't believe the U.S. has a comparative advantage producing large vehicles, while other countries have a comparative advantage producing small vehicles?"

Absolutely not. The U.S. tariff on imported pickup trucks is the only reason such vehicles are produced in the U.S. And that tariff is exactly why Japanese automakers built truck and SUV assembly plants in the U.S. in the first place.

The UAW understands this issue very well:

"Thailand, with low labor costs and a central Asian location, has become the world’s second-leading producer of pickups, after the United States. If the truck tariff — equal to 25 percent of a vehicle’s price — is eliminated, the UAW fears automakers will dump pickups built in Thailand in the U.S. market.

Toyota Motor Co.p., Mazda Motor Co., General Motors Corp., Isuzu Motors Ltd. and other automakers have consolidated Asian pickup production in Thailand and export trucks to Japan, China and India."

 
At 4/09/2012 5:52 AM, Blogger Jet Beagle said...

juandos,

The quality of engineering makes no difference to the discussion of where vehicles are produced. Japanese and American electronics companies engineer products in their home countries but mnanufacture them in low labor cost nations. If not for U.S. protectionism, pickups and SUVs - including the Suburban - would likewise be manufactured in low labor cost nations. And American consumers would pay less for them.

The U.S. does not have an advantage - absolute or comparative - in producing pickups and SUVs. And that's exactly why the 25% light truck tariff remains so important to the UAW.

 
At 4/09/2012 7:50 AM, Blogger VangelV said...

Well of course they would have loved to. There's more money to be made. But again you are making up a BS version of reality. Diesel-engined cars are available in the US. There's plenty of models to chose from. Yet people don't buy them. You're not comprehending that this IS a market decision.

Your inability to actually look things up is your problem, not mine. The primary issue is taxes and regulations. And then there's another challenge for diesels--stricter U.S. emission regulations. The 50-state light-duty vehicle limit for emissions of nitrogen oxides is 0.07 grams per mile. In Western Europe, the limit is 0.29. Reducing NOx to nitrogen and oxygen is much harder with a diesel engine because the exhaust is typically cooler and contains less oxygen compared to a gas engine. To meet U.S. regulations, diesel engines are required to use complicated--and expensive--high-pressure fuel injection and after-treatment systems that in some cases inject an aqueous urea solution to handle the NOx. The added expense of course means an even longer payback period for the consumer.

Last time I checked, Mr. Epstein wasn't an automotive engineer. He is a lawyer. So his opinion, as important as it may be on other subjects, is quite irrelevant here (besides, isn't Epstein the DEVIL himself for you? I mean, he calls your brand of "libertarianism" delusional)

Lawyers and economists tend to understand how regulations effect markets.

Second, you're stuck in 1975. But then what's new. All the arguments of why diesel didn't come to America bla bla bla all date back to the 1970s, and are just a cliche. Decades have passed since then, countless diesel models are available in the US market, and countless times automotive companies and others make the claim that they are better and should be bought over gasoline. Yet CONSUMERS continue to chose gasoline version of the same cars which are also available in diesel...and all you can say is "well back in 1975 the US regulations were stringer than in Europe, that's why!".

Ahh, the penny drops and you are trying to change the argument. I am not stuck in 1975. I point out how the effects have made diesel cars more difficult to obtain and why gasoline powered engines have a larger share than they would in a free market. Ironically, the EPA diesel regulations that impacted refineries have undone some of the damage done by previous legislation and we are likely to see a major increase in fuel efficient diesel cars over the next few years as expensive hybrids and electrics are further marginalised.

 
At 4/09/2012 7:57 AM, Blogger VangelV said...

Lets take the VW Jetta. I can buy a diesel Jetta, or a gasoline Jetta, in the US, anytime I want. Which do consumers prefer? Simple question, with a simple answer, which has nothing to do with US regulations from 1975.

When it comes to sales trends the diesel Jetta is leading the pack. The sale of diesel vehicles in the US was up 38% last year. Where a model offers a choice about one third of the sales are diesel. If diesel were taxed at the same rate as gasoline and if refineries adjust to the trend the numbers would go even higher.

It is clear that your critical thinking skills are still lacking. I suggest that you take a look at the actual trends, sales data and read up on taxation and regulation. You might learn something.

 
At 4/09/2012 8:38 AM, Blogger juandos said...

jet beagle says: "The quality of engineering makes no difference to the discussion of where vehicles are produced"...

Hmmm, there seems to be something counterintutive about that comment but I'll be damned if I can put my finger on it...

"If not for U.S. protectionism, pickups and SUVs - including the Suburban - would likewise be manufactured in low labor cost nations. And American consumers would pay less for them"...

Ahhh, not exactly true but then again jet this is anecdotal but Ford produces the similer type of F-250 and F-350 in Mexico near Monterrey and Mexico city...

The initial major visual difference is the lack of a lot of the pollution control crapola...

Well it seems there are also quite few other differences also and that's why Mexican made Ford pick-ups aren't stolen nearly as much as American made pick-ups are...

 
At 4/09/2012 9:15 AM, Blogger Jet Beagle said...

juandos,

As I understand it, Mexico and Canada are not subject to the tariff on light trucks. And Mexico's lower cost of labor is likely the reason Ford builds some trucks there. But Mexico's labor costs are not as low as labor costs in Asian countries such as Thailand.

 
At 4/09/2012 9:21 AM, Blogger Jet Beagle said...

juandos,

Do you think we might not be having the same argument? Peak said that the U.S. has a com-parative advantage in producing larger vehicles, citing a pickup truck as an example. You keep referring to American manufacturers. When Peak used the terms "comparative advantage" and "U.S." he had to be referring to U.S.-based manufacturing operations. That's not the same thing as U.S.-based corporations.

Ford could engineer its trucks in Michigan, and produce them in Thailand or some other low labor cost location. But the 25% tariff on light trucks prevents them from doing so. Not a U.S. comparative advantage in production. A tariff.

 
At 4/09/2012 9:27 AM, Blogger AIG said...

The sale of diesel vehicles in the US was up 38% last year.

So this is how ridiculous you are:

First you claim the EPA is lying bla bla bla, because diesel is better (one doesn't follow the other)

Second, you claim there are no diesel available in the US because the government makes it impossible for such vehicles to compete.

Third, you say that diesel vehicle sales are up 38% over the last year :)

Do you understand why you are silly?

-------------

My argument was always that there are circumstances where diesel is better, and circumstances where it is not. And as I said, diesel has made progress in the market for small cars only relatively recently.

The NOx regulations are a TINY TINY fraction of the reasons. So are taxes (4 CENTS greater per gallon for Diesel). So, as usual, you ignore the possibility that the MARKET makes rational decisions based on people's priorities, and instead attribute ALL market outcomes, to government regulations.

If you had read the article you yourself linked to, you'd have read where the REAL cost differences between diesel and gasoline engines lie:

"Americans haven't been clamoring for diesels because our fuel is so comparatively inexpensive--and diesel engines cost so much more to manufacture. Diesel engines cost more because they require added equipment such as a turbocharger to make power levels close to a gas engine. They also need heavier-duty internal components to stand up to higher compression ratios. The time it takes to "pay back" the $1500 to $3000 cost premium of a diesel engine with fill-ups at the pump, is very long at current U.S. fuel prices."

You don't seem to understand that there are actual engineering differences between the two, and actual market reasons to buy one over another.

Which is why people like you are NOT serious human beings. Your type of "libertarians" are jokes. You are only interested in conspiracy theories and in creating a fantasy version of reality that fits with your conspiracy theories. You are not interested in market, not as long as they don't produce the results you want.

 
At 4/09/2012 9:38 AM, Blogger juandos said...

Are we having the same argument jet?

Well in all honesty I don't know...

You say: "Ford could engineer its trucks in Michigan, and produce them in Thailand or some other low labor cost location. But the 25% tariff on light trucks prevents them from doing so. Not a U.S. comparative advantage in production. A tariff"...

I'm not arguing any of what you say per se but and I know that the Mexican made Fords are designed here in this country so it still begs the question, "why is the discriminating auto thief stealing American when Mexican trucks are more conviently located?"...

I think/guess that there is a real qualitative difference in assemblies...

 
At 4/09/2012 10:06 AM, Blogger Jet Beagle said...

juandos: '"why is the discriminating auto thief stealing American when Mexican trucks are more conviently located?"..."

I don't know, and that argument seems unrelated to the issue of comparative advantage. But here's some possible reasons:

1. American consumers are much wealthier than Mexican consumers, and own many, many more desirable pickups.

2. Because Mexican consumers regularly experience more crime, they protect their valuable trucks more than Americans.

But that's just guesses. In any case, Peak argued that the U.S. has a comaprative advantage in production of pickup trucks. That Mexico and Thailand also produce pickup trucks is evidence that the U.S. really does not have such a comparative advantage.

 
At 4/09/2012 10:25 AM, Blogger juandos said...

Gee jet but both your reasons/guesses are wrong especially when it comes to pick-ups...

For some reason I can't figure out you apparently don't think there's much if any qualitative difference in vehicle assembly and why it shouldn't make a difference...

I mean you could be totally correct and maybe I'm relying on the old saying, "you get what you pay for' to much...

None the less you've given me something to think about...

 
At 4/09/2012 11:07 AM, Blogger Jet Beagle said...

juandos: "you apparently don't think there's much if any qualitative difference in vehicle assembly and why it shouldn't make a difference..."

If markets were free, foreign plants would produce and sell the quality of vehicle which American consumers desire. Asian producers have proven they can produce the quality which American consumers desire in every other industry. Why is the market for pickups any different? Only because the 25% tariff on pickups is a huge barrier to entry.

American consumers have been paying way too much for vehicles for decades. Why? Because our damned elected officals accept bribes in order to protect unskilled auto workers.

 
At 4/09/2012 11:39 AM, Blogger Hydra said...

that mileage is calculated or hybrids electrics, etc is very different from the way it is calculated for gasoline only engines. this skews their epa reported mpg much higher that will really be experienced driving them.

===============================

How does that work? Isn't miles per gallon prettymuch the number of miles per gallon?

(My Prius routinely knocks back 51-52 mpg, actual, in routine driving. If I drive more aggressively it can drop to 47 -48).




As for the higher mileage enumbers being a response to higher gas prices, I have not owned a personal vehicle that got less than 25 mpg since 1975. Where has everybody been?

If people eventually choose jobs closer to home or homes closer to work, total milage may drop, yet fuel consumption could still go up, since the short trips are not as efficient on fuel.

 
At 4/09/2012 11:48 AM, Blogger Hydra said...

Diesels are better for slogging power, as in boats and heavy trucks, but auto drivers want fast accelseration.

In days past, diesel was much cheaper, and still is for off road use, so the pay back was not that long, especially since maintenance on diesels was nil compared to gas engines. But with gas engines having similar long preventive maintenance schedule, that difference is less.

Also, US drivers have been subjected to some terrible diesel cars. A possible option is the small constant velocity diesel with electric drive, similar to the Volt. if that thing wasn't already prohibitively expensive a diesel might have made sense.

 
At 4/09/2012 11:55 AM, Blogger Hydra said...

When it comes to sales trends the diesel Jetta is leading the pack.
==================================

The Jetta diesel is a HUGE improvement over the old Rabbit diesel I once owned. the Reabbit was economical and reliable (175,000 miles before the first minor engine repair, clogged fuel filter), but that thing was a DOG.

 
At 4/09/2012 12:00 PM, Blogger Hydra said...

Diesel isn't the answer. You only get twelve to thirteen gallons of diesel (as opposed to approx 22 gallons of gasoline) from a barrel of Crude. And, That is from a barrel of light sweet. You get considerably less from the Heavy oil that is increasingly replacing the L/S grades.

If the U.S. went on a "diesel car" binge the cost of diesel fuel would surely rise even faster than that of "gas."

================================

Isn't one reason for that ratio the best cost split for the refiner? You use more of the heavier grades as energy to split them into lighter grades. If there were more demand for diesel vs gas, wouldn't the refiners respond by producing more diesel and less gass per barrel?

I don't think that ratio of diesel per barrel is fixed.

 
At 4/09/2012 12:08 PM, Blogger Hydra said...

For example, if I drove a Prius at max speed, I would get worst mpg than a BMW M5.
=================================

I have heard that before but I don't believe it. At 80 and 85 MPH my Prius still gets good mileage in the real world.


Maybe MAX spped in the Prius is 100 or something 110, and max speed. in the M5 is 165 (?). It might be true that under THOSE conditions the M5 would do better (though I doubt it).

But who would make a real world decision based on that criteria?

 
At 4/09/2012 12:12 PM, Blogger Hydra said...

Ford's luxury Lincoln MKZ gets more than 40 mpg already.

===============================

Hard to believe. Combined? Average in the real world?

I once avereged 59MPG for over 350 miles in my Prius, but I would not report that as its MPG in ususal driving.

 
At 4/09/2012 12:31 PM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 4/09/2012 12:37 PM, Blogger AIG said...

How does that work? Isn't miles per gallon prettymuch the number of miles per gallon?

Don't pay much attention to that. The calculation of mileage for hybrids is exactly as valid as that for any other car with an internal combustion engine; miles drive/gallons used.

His "complaint" is that the EPA use assumptions are not to some people's liking. IE, if the EPA assumes 55% city driving and 45% highway driving, the hybrids will have an edge over the regular cars because of their better performance in city driving.

Well, that is all irrelevant. It's just a baseline for comparison.

I have heard that before but I don't believe it. At 80 and 85 MPH my Prius still gets good mileage in the real world.

They did it on Top Gear :) It was M3 actually, I got it wrong (skip to 3:30 if you want):
http://www.youtube.com/watch?v=JmxUsGiGp3w

But who would make a real world decision based on that criteria?

No one, of course. But that's the point. VangeIV doesn't understand that people make decisions on which cars to buy based in their individual use patterns. If you're not driving 400 miles a day, a diesel car is probably NOT going to be a better choice for you over a gasoline car. He has a 1 dimensional model in mind (as do most "libertarians" of his type), where there is only 1 possible outcome based on only 1 possible benefit, and if the market somehow chooses to go the other way, it MUST be because of the government.

For example, the fact that most Americans spend most of their driving time on the highway, means that their gasoline cars already get relatively good mpg which would only be a few mpg short of a comparative diesel car, while also having better highway performance than a diesel car. In Europe, on the other hand, where most driving is city driving, the situation is flipped. So it is absolutely rational for Americans to prefer gasoline over diesel cars given their use patterns, regardless of the potential benefits of diesel in other circumstances, and especially considering the higher costs of a diesel engine (which are due to the laws of physics, and not the laws of government).

He (and his type of "libertarians"...ie Ron Paul wackos) does not concern himself as to the WHY people and markets make the decisions they do. He already has a conclusion as to how the market SHOULD behave, and if it doesn't, it must be because of government.

If you're hammer, everything is a nail.

 
At 4/09/2012 12:38 PM, Blogger AIG said...

Just saying.

You're right, of course. But its just so easy!

 
At 4/09/2012 12:55 PM, Blogger VangelV said...

First you claim the EPA is lying bla bla bla, because diesel is better (one doesn't follow the other)

No. I said that the hybrid and electric numbers are way off and that the same tricks are probably used in other segments. I prefer the information from independent sources who look at real world driving conditions. Consumer Reports and the Automotive Magazines tend to be much better on that front.

Second, you claim there are no diesel available in the US because the government makes it impossible for such vehicles to compete.

I never said that. I said that the regulations discouraged diesel because of the much more stringent NOx regulations, something that others have pointed out on a number of occasions. This meant that vehicles sold in Europe could not meet the regulatory requirements in the US and were kept off the market regardless of demand. I also pointed out that the US government taxes diesel fuel at a higher rate than gasoline. And that without the new regulations, which mandated ultra-clean diesel even for trucks it would have been hard for automobile manufacturers to make inroads into the American market. Given the fact that the refiners are now making ultra-clean diesel there is plenty of fuel. In fact, diesel makes up a chunk of the petroleum exports that Mark has been bringing up on this site.

Third, you say that diesel vehicle sales are up 38% over the last year :)

I report the headline. Obviously the regulations that forced refineries to get rid of their old diesel formulation allow the European automobile companies to sell existing models in the US and is driving the American car companies to introduce diesel models in the coming years. If you look at the export numbers you will find that there is plenty of clean diesel around to support further market share gains.

My argument was always that there are circumstances where diesel is better, and circumstances where it is not. And as I said, diesel has made progress in the market for small cars only relatively recently.

Because of the regulations. Ford and GM could not bring their European models to the US because of the NOx problem.

The NOx regulations are a TINY TINY fraction of the reasons.

Really? If you don't meet the requirements you can't sell the cars. End of story. None of the Ford and GM European models could be sold in this market. That explains why they were sold in the market. The fact that you have a problem understanding logic and economics is your problem. I suggest that you work on it.

If you had read the article you yourself linked to, you'd have read where the REAL cost differences between diesel and gasoline engines lie:

"Americans haven't been clamoring for diesels because our fuel is so comparatively inexpensive--and diesel engines cost so much more to manufacture. Diesel engines cost more because they require added equipment such as a turbocharger to make power levels close to a gas engine. They also need heavier-duty internal components to stand up to higher compression ratios. The time it takes to "pay back" the $1500 to $3000 cost premium of a diesel engine with fill-ups at the pump, is very long at current U.S. fuel prices."


I did read the article. Two to three years is not a long time at all. Paying $1,500 more for a more fuel efficient engine that is easier and cheaper to keep running and lasts 35% longer is not an issue. As I wrote, given the NOx regulations there was no way to bring the existing models to the US. Given the barriers put up by the government the car companies were content to sell gasoline powered cars. If you look at the rest of the world you will find a preference for diesel because diesel engines are easier to keep running and much more durable over the long run. If the regulations in the US were the same as in the EU diesel would have made a much higher proportion of sales.

 
At 4/09/2012 12:58 PM, Blogger VangelV said...

You don't seem to understand that there are actual engineering differences between the two, and actual market reasons to buy one over another.

I already pointed out that the engineering is superior for diesel engines. They last a lot longer and the diesel acts as a lubricant, which means that friction is lessened. There are many advantages in addition to the better mileage.

Which is why people like you are NOT serious human beings.


LOL...Your bias is showing again.

Your type of "libertarians" are jokes. You are only interested in conspiracy theories and in creating a fantasy version of reality that fits with your conspiracy theories. You are not interested in market, not as long as they don't produce the results you want.

Again you seem to have a problem with reality. The NOx regulations make it impossible to sell perfectly good European market cars in the US. As such diesel cars could not make inroads.

 
At 4/09/2012 1:08 PM, Blogger Ron H. said...

juandos: "why is the discriminating auto thief stealing American when Mexican trucks are more conviently located?"

Do you know that Mexican made trucks are more conveniently located?

I don't have any idea how many Mexican made trucks are actually sold in Mexico. It was my impression that Mexican made trucks were sold elsewhere, mostly in the US, so that the availability of Mexican made trucks near Nuevo Laredo is really low, but that's just a guess.

"For some reason I can't figure out you apparently don't think there's much if any qualitative difference in vehicle assembly and why it shouldn't make a difference..."

I'm not sure it makes nearly as much difference as availability, and we haven't seen any indication that there IS a quality difference.

Besides Don't smugglers have Auto Club? :)

 
At 4/09/2012 1:14 PM, Blogger AIG said...

I already pointed out that the engineering is superior for diesel engines

??? They cost a lot more.

Again you seem to have a problem with reality. The NOx regulations make it impossible to sell perfectly good European market cars in the US. As such diesel cars could not make inroads.

But there's plenty of them! You just said their sales had gone up 39%! How can they be impossible to sell, but be 39% up in a year? And they cost more! The costs of them having to meet US emission standards is insignificant compared to the actual great costs of producing a diesel engine

And Ron H thinks I shouldn't make fun of you :) How can I not?

 
At 4/09/2012 1:17 PM, Blogger AIG said...

LOL...Your bias is showing again.

I make no secret of my bias towards people like you. I think you are more detrimental to "freedom" than any leftist.

-------

Now, on a lighter note, here's a car that gets 100 mpg. Would you trade in your Prius for this Hydra?

http://www.youtube.com/watch?v=dJfSS0ZXYdo&feature=endscreen&NR=1

 
At 4/09/2012 1:56 PM, Blogger Ron H. said...

"You're right, of course. But its just so easy!"

Actually, I deleted that comment to avoid being accused of pot calling kettle black, but I will repost it as your references to it may confuse others.

I don't believe there is anyone who visits this blog regularly, who is unaware of your opinion of Vangel, and you are certainly entitled to it, but the constant reminders become tedious, and may cause readers to miss actual worthwhile content in your comments.

Here's my original comment again:

Aig,

"Do you understand why you are silly?"

And do YOU understand that your apparently obsessive need to Bash Vangel is keeping other readers from taking your comments seriously?

While your comments in general are informative, your responses to Vangel are mostly just annoying, and I, for one, usually just skip to the next one.

Just saying.

 
At 4/09/2012 2:32 PM, Blogger VangelV said...

His "complaint" is that the EPA use assumptions are not to some people's liking. IE, if the EPA assumes 55% city driving and 45% highway driving, the hybrids will have an edge over the regular cars because of their better performance in city driving.

It isn't just that. Cars should be tested under real world conditions. That means using the A/C even though it would drain the batteries faster. Consumer Reports reported a significant difference between their real world tests and the EPA figures. From what I saw there was a discrepancy for most vehicles but the hybrid difference was significantly larger.

 
At 4/09/2012 2:44 PM, Blogger Hydra said...

Would you trade in your Prius for this Hydra?

================================

Nah, I don't think so. Can't tell without knowing the price, and anyway, I doubt the 100 mpg claim is real.

My measure of utility is something like total cost/mile (after 250k miles) / average weight of passengers and cargo moved.

If I hauled a lot of kids and boats then a larger vehicle makes sense. The Jetta and Passat diesels are nice cars, but my last Jetta was such a hangar queen that I swore off VWs.

If I was single, there might be other considerations.

 
At 4/09/2012 3:10 PM, Blogger Hydra said...

I already pointed out that the engineering is superior for diesel engines. They last a lot longer and the diesel acts as a lubricant, which means that friction is lessened. There are many advantages in addition to the better mileage.

Which is why people like you are NOT serious human beings.

=================================

He is correct that they last longer and have many advantages. you are corrct that Americans don't like them.

Diesels take longer to warm up, so it matters haow long they are running as much as whether it is city miles or not. I am not sure you are correct that most miles are highway miles or that the most time in operation is highway miles.

The average commute is only 27 minutes, and even if it is highway, much of that is stop and go. For short trips it is hard to beat gas (unlss they are really short, and suitable for electric, maybe), but diesel gets ahead for really long hauls or constant operation like taxis or delivery trucks, it makes more sense.

I do believe the new diesel emission rules are sufficiently strict that they negate many of the diesels other advantages.

NOX is a byproduct of lean burning and high compression, so it makes litttle sense in either gas or diesel to penalize a byproduct that otherwise indicates efficiency of operation.

 
At 4/09/2012 3:24 PM, Blogger Hydra said...

His "complaint" is that the EPA use assumptions are not to some people's liking.

=================================

Like GDP calculations or CPI it matters more if they are consistent than right. I thought his claim that hybrids are calculated differently was just spurious.



++++++++++++++++++++++++++++++++++

He has a 1 dimensional model in mind (as do most "libertarians" of his type), where there is only 1 possible outcome based on only 1 possible benefit, and if the market somehow chooses to go the other way, it MUST be because of the government.


================================

Ah, yes. The selection of vehicle is dependent on the mission.

The single benefit problem is the one I bring up with the equation
TC = PC + EC + GC.

Looking at any single benefit or cost on the right side doesn't necessarily get you the lowest cost on the left side.

 
At 4/09/2012 5:12 PM, Blogger VangelV said...

I have heard that before but I don't believe it. At 80 and 85 MPH my Prius still gets good mileage in the real world.

They did it on Top Gear :) It was M3 actually, I got it wrong (skip to 3:30 if you want):
http://www.youtube.com/watch?v=JmxUsGiGp3w


That was an interesting video. The Prius used more gas than the M3. That is the problem with many of the claims about hybrids; the claims may be valid if you don't use the radio, don't try to use the A/C, drove under temperatures that were ideal for the battery packs, etc. But for the average driver, who drives as most of us do under real world conditions the hybrids are not as good as claimed. In fact, most of them perform worse than diesels that are heavier and perform much better.

VangeIV doesn't understand that people make decisions on which cars to buy based in their individual use patterns. If you're not driving 400 miles a day, a diesel car is probably NOT going to be a better choice for you over a gasoline car.

What nonsense. You don't need to drive 400 miles per day to justify diesel over gasoline. The extra $1500 gets paid back within two or three years and that does not even account for the lower maintenance costs for diesel engines.

He has a 1 dimensional model in mind (as do most "libertarians" of his type), where there is only 1 possible outcome based on only 1 possible benefit, and if the market somehow chooses to go the other way, it MUST be because of the government.

It clearly was the NOx regulations that kept the car companies from introducing models that they sold in Europe, Japan and elsewhere around the word. And it was the regulations that forced refiners to produce ultra-clean diesel that made it possible for many of the diesel vehicles to be introduced to our markets today. This was why the sale of diesel vehicles has exploded and is growing faster than the sales of gasoline vehicles.

For example, the fact that most Americans spend most of their driving time on the highway, means that their gasoline cars already get relatively good mpg which would only be a few mpg short of a comparative diesel car, while also having better highway performance than a diesel car. In Europe, on the other hand, where most driving is city driving, the situation is flipped. So it is absolutely rational for Americans to prefer gasoline over diesel cars given their use patterns, regardless of the potential benefits of diesel in other circumstances, and especially considering the higher costs of a diesel engine (which are due to the laws of physics, and not the laws of government).

How can Americans choose to buy diesel cars when the NOx regulations did not allow them to be sold? You have to stop making up narratives to support your views and start to look at the actual facts first.

 
At 4/09/2012 5:20 PM, Blogger Ron H. said...

"NOX is a byproduct of lean burning and high compression, so it makes litttle sense in either gas or diesel to penalize a byproduct that otherwise indicates efficiency of operation."

You probably meant to write "high temperature" instead of "high compression", although the latter contributes to the former.

As I'm sure you're aware, oxides of nitrogen are serious contributors to air polution and photochemical smog, so their reduction in motor vehicle exhaust is important.

The method used in gasoline engines - recycling exhaust gas to lower cylinder temperature below that required to burn nitrogen - is not possible in diesel engines. In addition, lowering cylinder temperatures in diesel engines allows the formation of more particulates in the exhaust.

 
At 4/09/2012 5:37 PM, Blogger VangelV said...

??? They cost a lot more.

They do not cost a lot more. Thanks to the better efficiency the $1,500 to $2,500 difference usually has a payback of around two to three years. But there are also significant savings in maintenance since diesel engines are much easier to keep running. Keep in mind that diesel engines are built to be stronger than gas engines because of the higher compression ratio. They wear out slower because there is less friction. Because diesel engines do not have complex ignition systems they do not have to be tuned up. Even the exhaust systems last longer because the exhaust from diesel is less corrosive than the exhaust from gasoline engines. It is not surprising to see diesel engines that have lasted more than 500,000 miles. That means that the cost of the engine is amortized over a much longer vehicle life and that you are paying far less per mile driven than for a gasoline powered vehicle.

If you pay attention to the trends you will find that diesel vehicles are taking market share because of the better economics. Of course, if you paid attention you would not be writing most of the material that you post on this board.

 
At 4/09/2012 5:40 PM, Blogger VangelV said...

But there's plenty of them! You just said their sales had gone up 39%! How can they be impossible to sell, but be 39% up in a year? And they cost more! The costs of them having to meet US emission standards is insignificant compared to the actual great costs of producing a diesel engine

That was made possible by a change in regulations that made the fuel that the new diesel cars need available. Had the EPA not forced refineries to produce ultra-clean diesel there would be fewer choices available. You really should take a look at the issue before you post. Popular Mechanics and the Automobile magazines have been writing about this issue for quite some time so I do not understand why you missed it.

And Ron H thinks I shouldn't make fun of you :) How can I not?

 
At 4/09/2012 5:42 PM, Blogger VangelV said...

I make no secret of my bias towards people like you. I think you are more detrimental to "freedom" than any leftist.

You have no problem with the state regulating most of the economic and social activities in your daily life as long as it is 'your side' that is in power. The irony is that there is no difference between big government conservatives like you and big government liberals like Larry or Benny.

 
At 4/09/2012 6:35 PM, Blogger PeakTrader said...

Jet Beagle, an example of comparative advantage is the U.S. is better at producing larger vehicles than smaller vehicles, while Japan is better at producing smaller vehicles than larger vehicles.

So, the U.S. specializes in larger vehicles, while Japan specializes in smaller vehicles.

If the U.S. can consume all the larger vehicles and smaller vehicles, that's a different advantage.

 
At 4/09/2012 9:15 PM, Blogger AIG said...

It isn't just that. Cars should be tested under real world conditions. That means using the A/C even though it would drain the batteries faster. Consumer Reports reported a significant difference between their real world tests and the EPA figures.

Again, you don't understand the concept of establishing a baseline. EVERY real world drive is going to give you a different result from the EPA. That's not a problem. Its only a problem if you haven't read the ASSUMPTIONS the EPA uses :) Well, if you can't read the assumptions, then you shouldn't be talking about it.

What nonsense. You don't need to drive 400 miles per day to justify diesel over gasoline. The extra $1500 gets paid back within two or three years and that does not even account for the lower maintenance costs for diesel engines.

Again, YOU don't get to make that decision for other people. Other people get to make that decision for themselves. And they have. You're just crying because it's not to your liking. Very strange...for a "libertarian".

t clearly was the NOx regulations that kept the car companies from introducing models that they sold in Europe, Japan and elsewhere around the word. And it was the regulations that forced refiners to produce ultra-clean diesel that made it possible for many of the diesel vehicles to be introduced to our markets today. This was why the sale of diesel vehicles has exploded and is growing faster than the sales of gasoline vehicle

Which part of...the engines cost more money...do you not understand?

How can Americans choose to buy diesel cars when the NOx regulations did not allow them to be sold?

Lol...that's completely ridiculous. There's lots of diesel cars available for sale.

 
At 4/09/2012 9:19 PM, Blogger AIG said...

They do not cost a lot more. Thanks to the better efficiency the $1,500 to $2,500 difference usually has a payback of around two to three years.

Your own source lists the difference as ranging from $1,500 to $3,000, not $2,500 :)

Either way, YOU do not get to make the calculation of whether it is more economical for ME. I get to make that decision, as does everyone else in the market. And they have, not to your liking.

I don't understand what it is you are arguing about, other than your obsession with blaming everything and their mother on the "government". Diesels are available, and people buy diesels for certain reasons and certain uses. They don't for others. People make rational decisions based on their economic utility. You're complaining...that their decisions are not to your liking.

Ron H will have to forgive me, but this I'm going to have to say that this is why your type of "libertarianism" is a JOKE.

If you pay attention to the trends you will find that diesel vehicles are taking market share because of the better economics

Then WHAT the hell are you complaining about? :) Jeeze you're thick

 
At 4/09/2012 9:20 PM, Blogger AIG said...

You have no problem with the state regulating most of the economic and social activities in your daily life as long as it is 'your side' that is in power

I have lots of problems with that. I also have a lot of problems with conspiracy theory dogmatic nutjobs like you

 
At 4/09/2012 9:23 PM, Blogger AIG said...

That was made possible by a change in regulations that made the fuel that the new diesel cars need available. Had the EPA not forced refineries to produce ultra-clean diesel there would be fewer choices available. You really should take a look at the issue before you post. Popular Mechanics and the Automobile magazines have been writing about this issue for quite some time so I do not understand why you missed it.

There have been plenty of diesel models available for sale in the US for decades. Trucks are diesel. A lot of pickups are diesel.

The reason diesel CARS are becoming more popular now, is because they are actually becoming better PERFORMERS now, given technological improvements in diesel engines.

It appears you don't seem to understand what a car and a truck are, either.

 
At 4/09/2012 9:25 PM, Blogger AIG said...

As I'm sure you're aware, oxides of nitrogen are serious contributors to air polution and photochemical smog, so their reduction in motor vehicle exhaust is important.

Ron, that's government mumbo jumbo. EPA lies. Why don't you do some research before you post? :p /jk

 
At 4/09/2012 9:42 PM, Blogger Ron H. said...

Peak,

"Jet Beagle, an example of comparative advantage is the U.S. is better at producing larger vehicles than smaller vehicles, while Japan is better at producing smaller vehicles than larger vehicles."

That is an example of absolute advantage for the US in building larger vehicles, and an absolute advantage for Japan in building smaller cars.

An example of comparative advantage would be if the US was better at making both large cars AND small cars, but was 3 times better at making large cars than japan, and only 2 times better at making small cars.

The best outcome for both would be for the US to make large cars, and for Japan to make small cars.

For the same reason a doctor will almost always do doctoring full time and hire an office manager, even though he/she is better at managing the office than the person that's hired. The most valuable use of a doctors time is doctoring, not managing an office.

 
At 4/09/2012 11:37 PM, Blogger Don Culo said...

Some people have way to much time to waste. Guess who they are.....

 
At 4/10/2012 12:58 AM, Blogger Ron H. said...

"Some people have way to much time to waste. Guess who they are....."

I wonder what the right amount is?

 
At 4/10/2012 12:59 AM, Blogger Jet Beagle said...

peak trader: "Jet Beagle, an example of comparative advantage is the U.S. is better at producing larger vehicles than smaller vehicles, while Japan is better at producing smaller vehicles than larger vehicles."

As Ron H pointed out, these are examples - if true - of absolute advantages, not comparative advantages.

Of course, you have not provided anything to support your claim that the U.S. is "better" at producing large vehicles. You simply stated this as fact.

I think I can say with confidence that Thailand produces pickup trucks at lower cost than does the U.S. That's why Japanese companies produce pickup trucks in Thailand and not the U.S. for export to Japan. The shipping transport costs from the U.S. would be slightly higher (5500 miles vs 3000 miles). But the labor cost for Thailand is much, much less.

 
At 4/10/2012 2:52 AM, Blogger PeakTrader said...

Ron and Jet Beagle, I don't know how you concluded my statement has anything to do with absolute advantage.

My statement says nothing about the U.S. being better than Japan at producing one or both or vice versa.

So, you don't believe the U.S. is better at producing larger vehicles than smaller vehicles, and Japan is better at producing smaller vehicles than larger vehicles?

 
At 4/10/2012 4:06 AM, Blogger Ron H. said...

Peak,

"Ron and Jet Beagle, I don't know how you concluded my statement has anything to do with absolute advantage."

Huh? Your statement gave two examples of absolute advantage. I suppose that's how.

"My statement says nothing about the U.S. being better than Japan at producing one or both or vice versa."

Yes it did, you wrote:

"Jet Beagle, an example of comparative advantage is the U.S. is better at producing larger vehicles than smaller vehicles, while Japan is better at producing smaller vehicles than larger vehicles."

"So, you don't believe the U.S. is better at producing larger vehicles than smaller vehicles, and Japan is better at producing smaller vehicles than larger vehicles?"

No.

 
At 4/10/2012 10:34 AM, Blogger Jet Beagle said...

peak trader: "So, you don't believe the U.S. is better at producing larger vehicles than smaller vehicles, and Japan is better at producing smaller vehicles than larger vehicles?"

Of course not. There is almost no difference in the production techniques for the large and small vehicles which are purchased by households.

There is a simple reason why U.S.-based corporations have a large share of the U.S. market for vehicles built on light truck platforms. That's because the U.S. market for those vehicles have been protected for 48 years by the 25% tax on imported light trucks. Of course, Japan-based corporations have been eroding that share as they slowly built up their investment in U.S. factories. Were it not for continued government intervention, U.S.-based corporations would have lost market share even faster. Or, perhaps, they would have been forced to abandon the ridiculous labor contracts which unnecessarily burden U.S. consumers.

 
At 4/10/2012 2:22 PM, Blogger VangelV said...

Would you trade in your Prius for this Hydra?

From the latest data on the subject only a third of hybrid buyers would purchase another hybrid. That means that few of them would purchase something that is a lot less useful.

 
At 4/10/2012 2:31 PM, Blogger VangelV said...

He is correct that they last longer and have many advantages. you are corrct that Americans don't like them.

It is easy not to like something that has not been on sale because regulations prohibited it.

Diesels take longer to warm up, so it matters haow long they are running as much as whether it is city miles or not. I am not sure you are correct that most miles are highway miles or that the most time in operation is highway miles.

This is not exactly true. Diesel users in Texas, Alabama, or Florida do not worry about their vehicles warming up and even in the colder northern states the use of winter blends and block heaters deal with the issue effectively. Just for the record, if you want a small engine car in the northern states you better have a block heater if you want to start it in the morning. I know that my old Jetta, which was gasoline powered because no diesels were available at the time, needed a block heater.

The average commute is only 27 minutes, and even if it is highway, much of that is stop and go. For short trips it is hard to beat gas (unlss they are really short, and suitable for electric, maybe), but diesel gets ahead for really long hauls or constant operation like taxis or delivery trucks, it makes more sense.

Diesel gets better mileage both in the city and on the highway. Even if you drive as little as 15K miles per year a diesel vehicle can pay for itself within five years. Of course the engine will last a lot longer so when you amortize the costs you will find a much lower cost per mile driven over the lifetime of the vehicle.

Consumers understand this. It is the reason why diesel sales have exploded recently and why even the US manufacturers are introducing diesel models next year. Ironically, it took one stupid regulation to undo the damage caused by another stupid regulation. By forcing refineries to produce ultra-clean diesel it is easier and cheaper for manufacturers to meet the EPA NOx emission regulations that are far more stringent than in the EU and Japan.

 
At 4/10/2012 2:56 PM, Blogger VangelV said...


Again, you don't understand the concept of establishing a baseline. EVERY real world drive is going to give you a different result from the EPA. That's not a problem. Its only a problem if you haven't read the ASSUMPTIONS the EPA uses :) Well, if you can't read the assumptions, then you shouldn't be talking about it.


I agree that every real world drive is going to give you a different result from the EPA. The problem is that the EPA results for hybrids and electrics are so far removed from the average driver that they do not make any sense and are not useful. This would not be an issue if the EPA made exactly the same type of error and was off by the same amount for diesel or gasoline vehicles but that isn't the case.

The bottom line is that the numbers are a tweaked narrative designed to meet a political end, not to reflect reality. This is the reason why only around a third of hybrid owners would ever consider buying another hybrid vehicle. I suspect that the numbers for electric vehicles will be even worse.

 
At 4/10/2012 3:02 PM, Blogger VangelV said...

Again, YOU don't get to make that decision for other people. Other people get to make that decision for themselves. And they have. You're just crying because it's not to your liking. Very strange...for a "libertarian".

That is funny. The regulations for NOx meant that the people never had a choice in the first place. I thought that you big-government conservatives did not like regulations.

Which part of...the engines cost more money...do you not understand?

Which part of the cost per mile driven is lower don't you understand?

Lol...that's completely ridiculous. There's lots of diesel cars available for sale.

But they weren't available before. As Popular Mechanics, the auto magazines, and plenty of lawyers pointed out, the NOx regulations kept European and Japanese models off the US market. (Even those sold by GM and Ford.) They only had a 'choice' in your Orwellian meaning of the term.

 
At 4/10/2012 3:25 PM, Blogger VangelV said...

Your own source lists the difference as ranging from $1,500 to $3,000, not $2,500 :)

The difference for a diesel engine on a Passat is only $2,600 but even the $3,000 figure is fine because if we use real world prices for everything we get a much better payback period. This is the primary reason for the huge increase in diesel sales. Once given the choice knowledgeable consumers chose the better engines and the lower cost per mile. I suspect that once the American car companies introduce their own models next year the numbers will improve further. And as more and more people choose diesel the need for fuel will drop even if the number of miles driven remains constant.

Either way, YOU do not get to make the calculation of whether it is more economical for ME. I get to make that decision, as does everyone else in the market. And they have, not to your liking.

I have never claimed that I want to make the calculation for anyone. I have only argued for more choice by reducing unnecessary regulations and stop trying to use the tax system to regulate economic behaviour. The government is incompetent and as such is not to be trusted with planning economic activity for us. I would have thought that someone who claimed to be fiscally conservative would see the merit of such arguments. But for some reason you still tend to favour bigger and bigger government even as you claim to be a fiscal conservative. While I have my suspicions only you can try to figure out what that is.

I don't understand what it is you are arguing about, other than your obsession with blaming everything and their mother on the "government". Diesels are available, and people buy diesels for certain reasons and certain uses. They don't for others. People make rational decisions based on their economic utility. You're complaining...that their decisions are not to your liking.

You don't understand? I thought that it was very simple.

1. Perfectly good vehicles were kept off the American market by unnecessary regulations. This meant that, contrary to your claim, diesel choices were very limited in the US and consumers had fewer choices.

2. The fuel taxes were different for gasoline and diesel. This meant that consumers had to pay more to the government in taxes for their fuel. And the last time any one of us looked incentives mattered.

My argument is that since the new regulations have made many more models available the consumers have voted with their wallets and have made the diesel segment grow much faster. In fact, demand has caught the automakers by surprise and if you pay attention to their incentives you see far more being offered for gasoline vehicles than for diesel as the inventories (in days of sales) are not nearly in balance.

Clearly the American car companies have noticed the trend because they will introduce their own diesel models for the next model year as they try to catch up to the inroads made by VW.

 
At 4/10/2012 3:25 PM, Blogger VangelV said...


Like GDP calculations or CPI it matters more if they are consistent than right. I thought his claim that hybrids are calculated differently was just spurious.


Consumers Report did not think that they were spurious. It caught on early in the game and reported, "its Toyota Prius hybrid test car got 44 miles a gallon in real world driving, not the city/highway rating of 55 mpg that the government reports."

Of course the EPA does not seem to have learned from its mistakes. Warren Myer at Forbes caught on to this and pointed out that the DOE methodology provides very different results:

"The end result is startling. Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z."

The bottom line is that the government data and methodology is very suspect and if you want a better idea of what is going on it helps to look at independent sources paid by end users.

 
At 4/10/2012 3:31 PM, Blogger VangelV said...

I have lots of problems with that. I also have a lot of problems with conspiracy theory dogmatic nutjobs like you

You certainly have many blind spots. Not only have you ignored the regulations that kept choices lower you made excuses for the way that the EPA has been playing around with the mileage rating system. That is not what someone who is a proponent of a free market and economic liberty would do.

Of course, I do not believe that the evidence shows that you want free markets or liberty. You have been supporting the expansion of government power and the limiting of individual liberty for a very long time. Clearly there is no consistency between what you claim to be and what you seem to be.

 

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