US Automakers continue to transition as quickly as possible to deal with an overall decline in sales including an unanticipated decline from the higher income market as well.  Automakers are feeling the pressure to accomodate the needs of higher income families whether for necessity, the environment or their image.

General Motors (GM) recently rolled out its latest version of the well known, high end, Cadillac Escalade in a hybrid version.  Ford on the other hand has canceled its production of the Lincoln Mark LT Truck.  Instead, Ford will be shifting its focus to smaller, more fuel efficient automobiles.

I think it is safe to expect foreign manufacturors such as Toyota, Honda, Hyundai, and others to continue their focus on smaller more fuel efficient autos.  Even foreign luxory autos such as Lexus are starting to roll out hybrid versions of their popular models.  For different reasons, individuals across the financial spectrum are looking to drive more fuel efficient vehicles.  Obviously lower income families are looking to save at the pump.  Middle and high income families may also feel the squeeze and look to reduce spending, however, it might also be a social or environmental decision.

Oil prices close at $114.65 a barrel today, the lowest closing price since May 1st. Record high oil prices aren’t bad news for everyone, especially companies in the business of building infrastructure to help support the growing demand for natural gas and nuclear projects.

Fluor Corporation, a leading contractor in energy infrastructure development, saw its second quarter net income double. Every sector of the company grew last quarter, but industrial-and-infrastructure grew 500%. The company is benefiting from high oil prices as consumers and politicians plan for alternatives such as increased use of nuclear power.

The Wall Street Journal reports that as long as crude oil prices remain above $70 a barrel, Fluor will have room to continue investing in capital projects in the energy sector.

One of the biggest factors that goes into purchasing a car these days is a vehicle’s fuel economy. Many consumers however are still on the market for cars that perform equally as well on the track as they do for your wallet. Road and Track published an article in its August 2008 issue titled “The Fast & The Frugal“. The story reviewed the top 10 most fuel efficient performance vehicles and concluded that the Chevy Cobalt SS was the best balance of fuel economy and performance.

With a 0-60 time of 5.5 seconds and an average fuel economy rating of 26 MPG, the Chevy Cobalt is an affordable solution for those who crave performance.

We thought it would be a bit more interesting to create a measurable value that could be used to compare car models on cost of performance. Here is what we came up with:

(Car Price * 0-60 time) / MPG

This formula only takes three pieces of data into account. Car price, 0-60 time in seconds, and MPG. The lower the number the better. We want an inexpensive, high performance, fuel efficient car. We applied this formula to every car tested by Road & Track in their article. The results are below.

1. Chevy Cobalt SS - ($23,490 x 5.5 seconds) / 26 MPG = 4,969
2. Mini Cooper S - ($28,850 x 6.4 seconds) / 30 MPG = 6,155
3. Pontiac Solstice GXP - ($30,299 x 5.5 seconds) / 23.5 MPG = 7,091
4. Mazda MX-5 - ($27,000 x 6.5 seconds) / 24.5 MPG = 7,163
5. Honda S2000CR - ($37,000 x 5.3 seconds) / 21.5 MPG = 9,120
6. Nissan Nismo 350Z - ($38,070 x 5.3 seconds) / 21.5 MPG = 9,348
7. BMW 135i - ($43,670 x 4.8 seconds) / 21 MPG = 9,981
8. Lotus Elise SC - ($54,000 x 4.6 seconds) / 23 MPG = 10,800
9. Audi 3.2 Quattro - ($45,620 x 5.1 seconds) / 20.5 MPG =11,349
10. Chevy Corvette Z51 - ($56,185 x 4.3 seconds) / 21 MPG = 11,504

So it appears we agree that the Cobalt SS is the best bang for the buck. The next 5 results are different. Road & Track took many more data points into account with their assessment, with less emphasis on cost compared to performance and efficiency.

General Motors is considering introducing the Chevrolet Beat to the US market within a year. The move is driven by a decline in SUV and truck sales as consumers look for more fuel efficient options. Additionally, GM is feeling pressure from foreign competitors such as Honda and Toyota who already offer fuel efficiency in the Fit and Yaris.

The Chevy Beat is a three door, front wheel drive hatchback and powered by a 1.2 liter turbocharged engine. Gas mileage is estimated at 36 mpg. In addition to good gas mileage is a rock bottom starting price of ten thousand dollars ($10,000).

If oil and gas prices continue to grow, which we suspect they will, this should be a winner for Chevy. It is also an important defensive move to retain market share in a highly competitive market where consumers will have no choice but to buy based on fuel efficiency.

High gas prices are helping reduce congestion on the streets of NYC while pushing more people to take advantage of mass transit. The MTA in New York City reports that traffic through bridges and tunnels has dropped 4.7% in June, 2008, compared to June, 2007. It is suspected this decrease is directly related to rising fuel prices.

During the same time, ridership of NYC subways and buses increased by 4.6% between April and June. So, with more ridership on mass transit, the fuel efficiency of these public transportation systems should increase dramatically.

Can we actually benefit from increasing gas prices in metropolitan areas with highly tuned, fuel efficient public transportation systems? In the immediate future it seems we can. With high gas prices forcing people out of their cars and into mass transit, we not only reduce automobile emissions into the air but potentially help force down the price of gas because of reduced demand.

What’s really interesting here is that in metropolitan areas with alternate transportation systems in place, gas prices may peek sooner than other areas, finding a ceiling based on reduced demand created by a true alternative to driving; mass transit.