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Petrol too cheap, says GM boss

Fuel conundrum: Bob Lutz - unveiling the Cadillac Converj in Detroit - says cheap fuel encourages V8 buyers.

Lutz urges government to raise petrol taxes to promote fuel-miser cars

13 Jan 2009

By BYRON MATHIOUDAKIS in DETROIT

GENERAL Motors’ global product development chief Bob Lutz has called for governments to help make greener cars more attractive to consumers as the US auto giant struggles to meet the huge investment required for future Corporate Average Fuel Economy (CAFE) regulations.

Like every other vehicle manufacturer selling cars in America, GM must invest heavily to have their ‘fleet’ achieve a fuel consumption average of 6.72L/100km (35mpg) by 2020.

Currently, the CAFE for passenger cars is 8.6L/100km (27.5mpg) and 10.6L/100km (22.2mpg) for combined cars and light trucks/SUVs.

Speaking at the North American International Auto Show in Detroit this week, the man known as GM’s ‘car tsar’ surprised the Australian media when he suggested that governments may even have to resort to increasing taxation on fuel during times when the price of oil has fallen dramatically in order to encourage spending on more environmentally efficient vehicles.

Mr Lutz said he feared that buyers – particularly in the US, where petrol is close to a third of its price of just six months ago due to the global economic crash – will overlook green cars in lieu of larger and thirstier V8 models.

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“In truth, if the US was serious about conserving fuel, we would have an energy policy that would gradually increase the price of motor fuels and we would discourage the purchase of V8 engines,” Mr Lutz said.

“What the US government has not yet grasped is that you cannot force people into buying very expensive four-cylinder cars with a lot of advanced fuel-saving technology and at the same time have gasoline at $US1.50.

“You can’t have the world’s most efficient car fleet at the same time you have the world’s cheapest fuel, because – as I like to say – it is like the US government trying to combat obesity not by making food more expensive but forcing the clothing manufacturers to only manufacture small sizes. They’re regulating the wrong thing.

“And as long as fuel remains inexpensive, we are not going to be able prevent Americans from buying V8 Camaros. Because we have regulations to meet, we are hoping that people are buying V6 Camaros ... but I think Americans are going to buy the V8.

“We have governments mandating 35mpg for city and highway, and technologically – without resorting to very expensive hybrid systems – we don’t know how to do that, and neither does anybody else, by the way.

“As I always point out to the few members of government that actually listen, vehicles are actually going to get considerably more expensive.

“And if that is not coupled with some sort of incentive to the public – and now it could be a positive incentive where you reward people with a $5000 tax credit for buying a more fuel efficient car, or it can be a negative incentive in that ‘Okay, if you insist on buying a big V8, you are going to have to foot a very large gasoline bill’ – then something has to happen ... because government legislation is going to force us to build cars that, at current fuel prices, nobody is going to want.”

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