DETROIT -- Although slumping oil prices have not changed General Motors' product development plans, the plunge is affecting consumers’ purchase decisions, says Dan Nicholson, GM’s powertrain chief.
The price of oil crashed to as low as $29.93 per barrel on Tuesday, a 13-year low. That’s down 19 percent this year and a whopping 72 percent from its high of $108 in June 2014, CNN reported.
The drop in oil prices "causes us to be more pessimistic about customer willingness to pay for fuel-saving technologies,” said Nicholson.
“We were hopeful when oil was $100 and even $60 per barrel. The customer will do the math and see their way through if there is a payback,” Nicholson said on the sidelines of the Detroit auto show on Tuesday.
GM is using the Detroit show to spotlight the Chevrolet Bolt, an electric vehicle that is expected to be priced around $30,000, after a one-time $7,500 federal tax credit, and deliver a range of 200 miles on a charge. The company plans to begin building the Bolt this year.
GM, Nicholson said, has not changed its product development plans and will continue to roll out more fuel-efficient vehicles and powertrains.
Under consideration, he said, is a diesel engine for the Cruze hatchback, a car that, if built, would be aimed straight at struggling Volkswagen.
Because of diesel emissions violations that have dogged VW for months, the German brand can’t sell the diesel-powered Golf, Jetta and other vehicles in the U.S.
GM has said a new 1.6-liter turbodiesel four-cylinder, dubbed the “whisper diesel,” will be offered in the new Cruze sedan. GM officials stopped short of confirming that engine for the hatchback on Tuesday.
It’s unclear if the low price of oil will affect GM’s decision to engineer and equip the hatchback with the 1.6-liter diesel engine.
Nicholson said there is not a version of the Cruze hatchback in production in other markets with the 1.6-liter diesel and the selective catalytic reduction, or SCR, system needed to control emissions. So GM would have to engineer the diesel system for the hatchback, a cost it might be unwilling to shoulder if consumers are reluctant to pay for the technology.
But Nicholson said two more fuel-saving automatic transmissions, a nine-speed for front-wheel-drive cars and a 10-speed for rear-wheel-drive trucks and SUVs, are on schedule and on budget.
Both gearboxes are being developed with Ford Motor Co. Ford plans to launch the 10-speed this year in the Raptor pickup, while GM likely will launch the nine-speed late this fall or early next year.