I have been reading the news, like many of you and have seen the big three scramble to fill the market with small compact and sub-compact vehicles.  This has been especially hard, since they are not accustomed to a slowdown of trucks and SUV’s.  In my opinion it will take a few years for this change to take effect.  It is widely known, that Ford loses money on every Focus it sells, but then again it loses money on every Mustang as well.

The F-150, which has been the single best selling automobile for 16 years in a row is experiencing double digit declines in sales.  This is due to high gas prices and a weak economy.  I expect the sub-compacts and compacts, which have been successful in Europe will start making their way over here soon.  I also expect some smaller makes to gain territory into the North American marketplace soon.  This may end the dominance of larger type vehicles, with so many people making their buying decisions based on fuel efficiency.

I expect Chrysler, Ford and GM to continue to lose money in the coming years.  Probably 3-4 years at the least, until they can produce a turnaround plan, which effectively combats the current economic and environmental conditions we are faced with today.

As of recently, oil prices have hit $130 per barrel.  This is especially important to you if you drive to work.  Or if you drive anywhere for that matter. Gas prices have been in the neighbourhood of $1.30 per liter in the Toronto area.  This is for regular, so it’s not even premium or supreme.

CAFE stands for Corporate Average Fuel Economy.  It’s set in the United States in order to curb gas guzzling vehicles. When you see the popular term gas guzzler tax, thats what it is.  The manufacturer is kind enough to pass it onto the end consumer, who in turn says… darn government surcharges.

In fact, it’s not even the government, that charges you for these things. It’s the inefficiency of the car manufacturer of your choice that makes you pay in the end.  Not only by producing vehicles that are above the CAFE standards, but by passing on the CAFE fines to you.

CAFE fines the manufacturer $5.5 for every 0.1mpg that the vehicle fails it’s specific class for.  This is what adds up to those thousands of dollars on the Hummers.  By 2011 all vehicles must have a fuel efficiency rating of 30mpg or more in order not to be fined in the states.

When you buy a Porsche or Ferrari, you don’t care if the car is a couple of grand extra.  But when you grab a Ford Taurus or a Dodge Charger and they tack a few grand extra onto your invoice you start caring.

It’s now up to the car manufacturers to clean up their act and recognize their shortcomings with all these high performance, high horsepower vehicles that they’ve been spewing out.  I am shocked myself when I say this, but it’s about time they start worrying about the environment.

Still can’t believe I said that…