The good old days are back: U.S. average gasoline price at 1970 levels
As the 2015 North American International Auto Show opened to the public last Saturday in Detroit, crude oil prices were 50% lower than in the summer of 2014 and the U.S. average for a gallon of regular gasoline was $2.08 (HT GasBuddy.com.)
Millennials are in for a treat.
For the first time in their young driving lives, the price of gas is down for reasons other than a crashing economy.
Better yet, they no longer have to listen to Boomers brag about the good old days, because the good old days are here again. Adjusting for inflation, $2.08 is the equivalent of 34¢ in 1970 money – a penny cheaper than the actual average reported for that year by the U.S. Department of Energy (DOE.)
Perhaps next year Cobo Hall will look the way it did in 1970, when the auto industry actually courted Boomer business – a habit it has gotten out of lately.
And maybe we’ll be talking about muscle cars, full size coupes larger than most Manhattan apartments, 9 passenger family station wagons, a domestic nameplate market share at 85% and Volkswagen sales above half a million once again. Far out!
Boomers and the gasoline price roller coaster
The current fall in gasoline prices is a timely reminder of the immutable laws of supply and demand. It illustrates the lessons we Boomers learned along the way to becoming America’s most adaptable generation. When it comes to the gasoline price roller coaster, we’ve been there, done that.
From the time we were tiny tots until when many of us were driving ourselves, pump prices were orderly – never varying by more than a penny per gallon a year up or down, and morphing slowly from 27¢ in 1950 to 36¢ in 1973. Too bad that glacial rate of increase didn’t hold through 2012 … the price would have been around 51¢ a gallon instead of an all-time record high of $3.64 (DOE.)
But for leading edge Boomers who first drove in 1970, the lifetime gasoline price jump was – steel yourself – more than ten times the 34¢ they paid back then. Yes, we know we’re cheating by not including inflation, but Boomers still have those old prices hidden away as distant reference points.
Since 1970, while we Boomers have weathered painful spikes – due to “energy crises” #1 and #2, oil cartel shenanigans, geopolitical crises and soaring global demand – there were also years when prices stayed flat or even declined.
Still, one way or the other, Boomers remain adaptable, juggling gyrating fuel prices and the steady creep of inflation, just as we have all our lives. Just how adaptable is illustrated by the chart below comparing the average U.S. retail price for a gallon of regular gasoline in dollars of the day – current dollars – with the equivalent in 2014 dollars.
Mainstream auto brand advertisers still stuck in 1970 thinking
Since 1970, Boomers have learned lifelong adaptability skills. Some in adland, however, have become increasingly rigid. Convinced that Americans aged 50+ are unwilling or unable to change buying patterns, many mainstream brands no longer actively target us.
That retro notion lingers on at automaker ad agencies. Although the new car buyer median age is 52 (IHS Automotive), older Americans are seldom featured in advertising.
Ignoring a bigger new car market than Germany and the UK combined means a mind-boggling opportunity loss.
Consider us boggled: we might as well be invisible.
Gas prices may be back in the 1970s, but that doesn’t mean Madison Avenue should live there as well. It’s time to engage the Boomer-Plus Generation™ (born 1940-1945 + 1946-1964) and its 4 million new members – Gen Xers who celebrate their 50th birthday in 2015.
Controlling over 70% of U.S. household net worth, and with 93 million members, as a country the Boomer-Plus generation would be the world’s third largest economy – bigger and more affluent than Japan or any EU market, and far bigger than Canada plus Australia.
Honk if you like increased sales, higher ROI and fatter bonuses.