Rising fuel prices a thorny issue as launch of GM's next-gen SUVs nears
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Rising fuel prices a thorny issue as launch of GM's next-gen SUVs nears
Bad Timing? Rising fuel prices a thorny issue as launch of GM's next-gen SUVs nears - - By JASON STEIN | Automotive News - - Source: Autoweek
General Motors' high-profit, next-generation SUVs could face a significant hurdle when they debut next year: bad timing.
If gasoline prices hit $3 a gallon, filling up a 26-gallon Cadillac Escalade SUV would cost $78.
CEO Rick Wagoner said there's not much GM can do about it.
"Obviously, it's not ideal," Wagoner said in an interview with Automotive News. But, he added, "I chuckle when I read people saying, 'Gee, why would you bring out your full-sized pickups when gas prices are up?'
"These decisions are made a few years in advance. And this has been our most profitable product for a decade."
GM's analysis of fuel availability suggests oil prices should level off at "$40 or $50 a barrel," Wagoner said. "And all of our research says, at that level, people are going to go buy a lot of large utilities. I think that's a pretty good bet to make."
GM says its next-generation SUVs and pickups will show significant fuel economy improvements with cylinder deactivation and hybrid systems.
"What we're trying to do is mitigate the problem of higher fuel prices by improving fuel economy," he said.
Wagoner also maintained that buyers of full-sized SUVs are not affected as much by high fuel prices as some other buyers because "they tend to be a little less income-sensitive."
It's not the first time GM's leaders have felt confident about that position.
At a Morgan Stanley event last month in New York, GM Vice Chairman Robert Lutz told analysts and investors the large SUV segment is strong.
"It's a large and steady market with more than 650,000 affluent, attractive customers," Lutz said.
Lutz also said the continuing strength of the segment is attracting attention with new entries from Toyota, Honda and Nissan.
They're "all looking to be players in this segment," Lutz said. "So, with all of that competitive activity, it doesn't sound like a dying segment to me."
If gasoline prices hit $3 a gallon, filling up a 26-gallon Cadillac Escalade SUV would cost $78.
CEO Rick Wagoner said there's not much GM can do about it.
"Obviously, it's not ideal," Wagoner said in an interview with Automotive News. But, he added, "I chuckle when I read people saying, 'Gee, why would you bring out your full-sized pickups when gas prices are up?'
"These decisions are made a few years in advance. And this has been our most profitable product for a decade."
GM's analysis of fuel availability suggests oil prices should level off at "$40 or $50 a barrel," Wagoner said. "And all of our research says, at that level, people are going to go buy a lot of large utilities. I think that's a pretty good bet to make."
GM says its next-generation SUVs and pickups will show significant fuel economy improvements with cylinder deactivation and hybrid systems.
"What we're trying to do is mitigate the problem of higher fuel prices by improving fuel economy," he said.
Wagoner also maintained that buyers of full-sized SUVs are not affected as much by high fuel prices as some other buyers because "they tend to be a little less income-sensitive."
It's not the first time GM's leaders have felt confident about that position.
At a Morgan Stanley event last month in New York, GM Vice Chairman Robert Lutz told analysts and investors the large SUV segment is strong.
"It's a large and steady market with more than 650,000 affluent, attractive customers," Lutz said.
Lutz also said the continuing strength of the segment is attracting attention with new entries from Toyota, Honda and Nissan.
They're "all looking to be players in this segment," Lutz said. "So, with all of that competitive activity, it doesn't sound like a dying segment to me."
#4
6G TLX-S
Not just SUV's. I'm also seeing less big displacement V8 cars on the roads these days.
#5
The sizzle in the Steak
"Obviously, it's not ideal," Wagoner said in an interview with Automotive News. But, he added, "I chuckle when I read people saying, 'Gee, why would you bring out your full-sized pickups when gas prices are up?'
"These decisions are made a few years in advance. And this has been our most profitable product for a decade."
"These decisions are made a few years in advance. And this has been our most profitable product for a decade."
#6
GEEZER
:gheylaugh:
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