Gasoline demand in the United States hit an all-time high in 2006, and ever since then has been on the decline. Aided by rising prices, more efficient vehicles, and a slowing population growth, the United States as a whole is not only using less gas than before the recession, but we as a country have entered into a continued trend of decreased gasoline demand, which government officials and industry executives believe will be a permanent trend from this point forward. While current usage is about 8% less than the 2006 peak, experts expect to see as much as a 20% reduction in gasoline use by 2030.
It’s been a few weeks since Harley-Davidson announced the immediate closure of its subsidiary Buell, where dealers began slashing prices both to liquidate stock and to cash-in on Harley’s $5,000 sale incentive. Basic economics dictates that any time a price is raised or lowered it has repercussions to the product’s resale value, and in the case of Buell’s sudden price drop and dumping of basically new bikes into the market, the consequences for current Buell owners seem dreary. Or are they?
In order to find an answer to that question, we asked Joshua Minix, former government think-tank Economist, and current John M. Olin Fellow in Law and Economics at Harvard Law School, to wade through the implications of Buell’s closure, and how it affects the used Buell motorcycle market.