Petrol prices to be catalyst for green cars
ABC Online, Posted Wed Jun 4, 2008 1:14pm AEST
Updated Wed Jun 4, 2008 1:32pm AEST
Cars with high petrol consumption are set to be sidelined as oil prices continue to climb. (ABC News: Giulio Saggin)
As you drive your car and stare at the petrol gauge, you can take heart that you are not the only one hurting from rising fuel prices.
It has affected the car industry itself in a way that may see the end of cars as we know them.
The change is making its presence felt in America, where people have always embraced the big petrol engine. But it seems its days are numbered.
One of the world's biggest car manufacturers, General Motors, has announced it is closing four of its plants because of the increasing price of fuel.
The company says it will close four factories in the US, Canada and Mexico, and launch a new series of environmentally friendly cars.
It expects to have an all-electric vehicle in showrooms by 2010.
GM's chairman and chief executive Rick Wagoner has told shareholders the changes, which will lead to the loss of 10,000 jobs, are difficult but necessary.
He says the greatest concern is the unprecedented rise in oil prices.
"These higher gasoline prices are changing consumer behaviour, and rapidly," he said.
"We at GM don't think this is a spike or a temporary shift, we believe that it is by and large permanent."
GM says the structural changes will save its North American operations more than $1 billion over two years.
James Shugg, a senior economist with the Westpac Bank in London, says US car figures for the month of May are exceptionally weak.
"For the first month ever, the Honda Civic looks like being the best-selling car in the United States after years of the S-Series truck - a pick-up that Ford makes - being the top-selling car," he said.
The situation has led General Motors to consider selling its trademark Hummer brand.
Mr Wagoner says consumer demand for petrol-guzzling vehicles is drying up and there is a growing push for fuel-efficient cars.
"Going forward, our focus on cars and crossovers will accelerate," he said.
"In fact, 18 of our next new 19 product launches in the US will be cars or crossovers."
Motoring analyst John Mellor is the publisher of GoAuto media, and he says the days of low-cost fuel are over and GM's decision is hardly surprising.
"General Motors and indeed Ford and Chrysler in America have been hooked on selling very, very large pick-up trucks for many, many years and those pick-up trucks are very thirsty," he said.
"In fact, they are very old-fashioned and they have just been very fortunate for having the low price of petrol for so long."
General Motors says it expects to have an electric car in showrooms by 2010, which will be called the Chevrolet Vault.
Mr Mellor refers to the proposed vehicle as a "clever car".
"Instead of being an electric car that you simply charge from the mains at home or at the office, it also has a small petrol engine in it," he said.
"Rather than driving the vehicle like it does in a hybrid, this little petrol motor simply keeps charging the batteries so it gets a range of about 600 kilometres and its acceleration and performance should actually be quite good."
Adapted from an AM report by Lindy Kerin.
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