You can't have both -- or can you?
 | Keith Crain is editor-in-chief of Automotive News. |
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For some reason that only oil tycoons understand, gasoline prices are heading for the roof , and many people are predicting $5-a-gallon gasoline by summer.
Great timing for the Detroit 3, which are all launching or about to launch new trucks. Ram will offer a diesel engine in its bread-and-butter pickups for the first time since 1978. Some believe truck buyers want V-8 engines and nothing else. Ford is offering smaller turbocharged engines with higher power and fuel economy.
But they are all trucks, and they are all driving headlong into one more fuel economy swamp.
Once again, the automobile dealer and manufacturer face the problem of reading customers' minds. Will customers want greater fuel economy in the face of constantly rising gasoline prices? Or will they simply ignore the chaos until it all settles down into something that approaches normality?
Of course, everyone figures that buyers will want better fuel economy. But the question remains: Are they willing to give up traditional vehicles and make substantial moves down into smaller vehicles?
It's anybody's guess whether fuel prices will skyrocket or stabilize or perhaps even decrease. If you talk to 10 well-informed automobile executives, you'll get at least eight different answers. It's not easy.
One thing etched in concrete is stricter fuel economy regulation that is making everyone scramble. All the world's auto companies are spending billions of dollars developing vehicles that will meet future standards.
Whether they do it by regulating CO2 emissions or applying corporate average fuel economy standards, governments all want higher fuel economy.
So we'll continue to see diesel and electric vehicles if for no other reason than they'll be needed in the mix to achieve CAFE standards.
Meanwhile, as fuel prices rise and fall like a roller coaster, companies still have to build vehicles that customers want to buy, regardless of government standards. And dealers will have to order vehicles that will be bought out of inventory by customers who don't give a hoot about CAFE. The consumer is buying one car at a time and doesn't understand the big picture.
It is going to stay confusing for the near future -- perhaps for the long term as well.
You can reach Keith Crain at kcrain@crain.com.
