|Why did people turn to four-cylinder cars in the 1970s, only to shift back to six- and eight cylinder cars in the 1990s?
Amy Higgins, Undergraduate economics major, The University of Akron, September 10, 2007
During the 1970’s automotive makers began to change the way cars were manufactured. This change consisted of creating the four-cylinder automobile. Then during the 1990’s car manufactures switched back to creating six and eight cylinder automotives. The focus of this paper is to explain what caused this shift from four cylinder cars back to six and eight cylinder cars.
On April 22, 1970 the first Earth Day was celebrated. This environmental movement spurred Americans to question their consumption habits due to the fact that America was beginning to be in the middle of an energy crisis. In the early 1970’s United States oil consumption was high; however U.S. oil production was declining. In 1970 only 22% of American energy consumption was in foreign oil, this dependency greatly increased by 1973 when foreign oil consumption rose to 36%. This dependency on foreign oil had a potentially crippling effect on the U.S. economy due to the fact of the Arab oil embargo of 1973.1
On October 17, 1973 members of the Organization of Arab Petroleum Exporting Countries (OAPEC), which consisted of the Arab members of the Organization of the Petroleum Exporting Countries (OPEC) plus Egypt and Syria, declared that they would no longer supply countries that supported Israel during the Yom Kippur war with petroleum. At the same time OPEC decided to raise the price of oil. This act was termed as the Arab oil embargo of 1973. The oil embargo caused the price of crude oil to double, this price increase intensified the already on going recession and it led to a global recession through 1974.2 During the embargo oil imports to the U.S. dropped from six million in September of 1973 to five million in later months. Two months after the start of the embargo, the price per barrel of oil rose 130%. Due to these uneasy facts the federal government started to look into ways for conserving fuel, gas guzzling cars become undesirable while smaller more gas efficient cars became more popular.3 One immediate act that the government imposed in hopes to curb consumption was a national maximum speed limit of 55mph.4
The Arab Oil Embargo lasted for six months; it ended on March 18 1974. However America was still involved in an overall energy crisis due to its high consumption of energy, therefore conservation was still the key.5 After the oil embargo fuel conservation came to the forefront. In 1967 the average car would get 14.8 miles per gallon (mpg) however by 1974 the average car would only get 12.9 mpg. In order to attempt to solve this problem The Energy Policy Conservation Act established the corporate average fuel economy (CAFE) standards.6 The CAFE regulations were first passed by congress in 1975. These regulations were intended to help conserve fuel by improving the average fuel economy of cars, and light duty trucks.7 The goals of the new regulations were to increase the average fuel economy to 18 mpg by 1978 and to 27.5 mpg by mid year of 1985.8 Light trucks were not subjected to the same fuel economy regulations as cars because the federal government wanted to give farmers a break during the 1970’s energy crisis, these breaks remained in place long after the 1970’s.9 After these regulations were enacted the top three automotive companies of the U.S., which were Chevrolet, Ford and Chrysler, decided to down size there automobiles by creating cars that ran on a four-cylinder engine compared to the six and eight cylinder engines. rear wheel drive cars were becoming a thing of the past as while small and compact front wheel drive cars were becoming part of America’s future.10 These technological innovations to the automobile gave way to a better fuel economy.
For the first decade that the CAFE standards were issued the overall fuel economy was continuously improving, however by the mid 1980’s improvements became stagnant, and from 1990 to 2005 the average fuel economy of both cars and trucks declined.11
The Following graph shows the fuel economy from 1975-2005. It can be seen that from 1985-2000 there was virtually no change in the fuel economy and in fact some years the fuel economy decreased.
In 1985 OPEC started to loosen its hold on gas prices, and the price per barrel began to decrease. Tensions within OPEC began to grow as Saudi Arabia increased its production of oil in hopes to gain market share, this increase in production drove the overall price of gas down. Also oil prices fell due to the fact that other sources of energy was being explored and used such as nuclear power and natural gas.12 Due to the decline in gas prices from the mid 1980’s through most of the 1990’s smaller more fuel efficient cars were not in demand. Consumers began to want automobiles that had high ownership values. Even when gas prices briefly spiked during the Gulf war, it was still apparent that American drivers were not going to sacrifice performance for fuel efficiency. Therefore since smaller cars were not in high demand, automotive makers began to switch back to automobiles with six and eight cylinder engines. During the 1990’s sport utility vehicles (SUV) became in high demand for the American consumers. By 1996 the Department of Transportation found that consumers value their SUV’s because of their size, versatility, four wheel drive, and overall performance. In 1999 there was a refocus on the original CAFE regulations due to the fact that crude oil and gas prices quickly rose along with American dependency on oil. In 1982 gasoline consumption was 6.5 million barrels per day and then increased to 8.4 mbd in 1999.13 Due to this potential problem there has been a movement to create more fuel efficient SUV’s such as hybrids and those that run on alternative fuels such as ethanol.
In order to curb economic hardships governmental regulations and new innovative technologies are often used. This can be seen during the energy crisis of the 1970’s when demand for energy supplies such as oil was high and supply was low. When needed, people will for go their wants for more practical options, for example, during the mid 1970’s consumers no longer purchased high horse power cars, but instead purchased smaller more fuel efficient cars. However when given the chance consumers will always try to purse their wants. For example when gas prices were low in the 1990’s consumers no longer had a need to worry about fuel efficiency automobiles, they were able to place values on automotives of large size and versatility. Nevertheless, starting in 1999 to present day the focus is back on innovative technologies to create a more efficient and desirable automotive due to the rising gas prices.
"1973 Oil Crisis." Wikipedia. 8 Sept. 2007 .
Bamberger, Robert. "Automobile and Light Truck Fuel Economy: the CAFE Standards." Almanac of Policy Issues. 25 Sept. 2002. Congressional Research Service. 8 Sept. 2007 .
"Corporate Average Fuel Economy." Wikipedia. 08 Sept. 2007 .
Shogren, Elizabeth. "Automakers: Gas-Smart Cars Could Hurt Sales." National Public Radio. 19 June 2007. 8 Sept. 2007 .
"The 1970's Energy Crisis." 8 Sept. 2007 .