Report project 4% shrinkage of US vehicle fleet in face of $7/gal gasoline by 2021

(from Green Car Congress):

 Photos Uncategorized 2008 06 26 Rubin1CIBC World Markets Managing Director/Chief Economist and Chief Strategist Jeff Rubin is projecting a shrinkage in the US vehicle fleet of 10 million vehicles in light of projected $7/gallon gasoline by 2012. A decline on that order would represent approximately a 4% reduction in the overall fleet—the largest such adjustment yet.

In the 26 June 2008 issue of the StrategEcon newsletter, Rubin lifts CIBC’s target for West Texas Intermediate by $20 per barrel to an average price of $150 in 2009 and by $50 per barrel to an average price of $200 per barrel by 2010. “Under prevailing refinery margins” he writes, “that should translate into a near-$7 per gallon pump price within two years, a 70% increase from today’s already record levels.”

This is really bad news for Detroit. But it goes in the category of consequences that should have been clearly foreseen for a long time…

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