In an article recently published on Automotive News, Keith Crain analyses the increase of gasoline prices in the States and the impact for American manufacturers.

Oil prices not only affect drivers but has a deep impact in the economy: everything is transported with fuel and oil is a cost material for lots of products. He affirms that the country can cope with higher prices and won't enter recession. Drivers, he says, are already adjusting "nicely" to the higher price of fuel, as everybody gets used to the higher fuel prices and figures out how to budget accordingly.

Crain also compares prices with Europe, where consumers are already paying double, mostly because of the high taxes used as a deterant for fuel consumption (did you know that in some places a part of that tax goes into the Public Health services?). "Our leaders have not yet figured out how to do that without committing political suicide", said Crain.

[Source: Automotive News, sub. req.]

Therefore, it's getting tougher for manufacturers to figure out what products to design and engineer and tougher for dealers to figure out what to buy and stock. Customers want the same vehicles with a 20 percent improvement in fuel economy. He affirmst that it's very easy to say for the government and for the consumer, but it will be very difficult for manufacturers.

So do we really agree with him when that manufacturers can't make more efficient cars overnight?

Incidentally, it was announced today that some automakers are close to calling for fuel economy standards as high as 36 mpg for cars (in 2022) and 30 mpg for light trucks (in 2030). The proposal would be offered as an alternative to a fuel economy measure scheduled to be considered by the full Senate the week of June 11.

Share This Photo X