Ram: diesel prices not affecting EcoDiesel demand, yet

4374 Views 11 Replies 8 Participants Last post by Diesel Washington, Jan 6, 2015

NothingToItButToDoIt

Discussion Starter · Dec 31, 2014

Do you think sales will begin to cool if low gasoline prices are sustained?

http://www.autonews.com/article/201...els-premium-grows-shuffling-fuel-economy-math

Bob Hegbloom, head of the Ram brand, said that the widening diesel-gasoline price gap hasn't softened demand for the brand's hot-selling light-duty diesel pickup.

"We're still seeing fantastic sales numbers," Hegbloom said.

But he conceded: "It's a tough time to ask that question. December is the largest month of the year for truck sales."

Hegbloom said consumers have waited so long for a light-duty diesel that there's probably some pent-up demand that Ram is working through. In September, the brand said it was increasing the EcoDiesel production mix to 20 percent of all Ram 1500s.

Gutierrez said the fuel price gap mostly affects the car market, in which buyers are more likely to base their math on fuel savings. At current prices, that math doesn't work in diesel's favor.

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Matty is right, they can't stay low. Once rig count falls and jobs start to be lost we'll start to see it climb back up.

What I find really interesting actually is not the effect of low prices on sales, but that pickups are a well worn badge in the shale fields/oil patch. What will the drop off in rigs and jobs do to the sales of pickups as a whole?

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Accused

· #6 · Jan 2, 2015

Panther Dash said:
Why is there going to be a decrease in the amount of rigs and jobs? Is this something imminent or are you just saying when this inevitably happens some time in the future?

Because shale/oil patch needs oil up at $90-100 to produce at a profit. Below that CapEx dries up and layoffs begin. No new rigs=superfluous workers=workforce inefficiencies= layoffs...

Some companies (American Eagle Energy) have decided to stop drilling entirely until the price rebounds, others have already made severe work force cuts (Haliburton) This is real and its happening now...

Look at the disparity, quite a way down to 'normal'

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Accused

· #11 · Jan 6, 2015

Diesel Washington said:
I guess its all just supply and demand. Right now there is far more supply which means that the price goes down. Ultimately this will even out to some type of equilibrium between supply and demand. I think that gas was overpriced a few years ago. Right now its under price, but eventually it should end up somewhere in the middle.

Saying that does a GREAT disservice to the complexities of the global energy industry. I'm no expert but am an active/avid follower. Hydrocarbions are considerably baked into each and every aspect of our lives, IMO its important to understand the hows and whys...

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