> 2. While oil has a high elasticity of demand (people need to drive to work and heat their houses), I've never bought the argument that cheap oil has a signifi

> 2. While oil has a high elasticity of demand (people need to drive to work and heat their houses), I've never bought the argument that cheap oil has a significant effect on car sales, especially in saturated developed markets. Who decides to make a $20k, 5-10 year investment based on something as volatile as oil prices? Car sales are driven mainly by income growth, marketing, and social pressures. Oil generally is considered to have a low elasticity of demand, or better said, is relatively inelastic, especially in the short term. You appear to be using the concept backwards. And while you may not have bought the argument that oil prices affect car sales, that fact continues to be true without your consent and is borne out by economic research.