| |||||||||||
| |||||||||||
 A funny thing has happened on the drive to a greener automotive industry: Gas prices have retreated to levels where perhaps fuel efficiency suddenly isn't as important as it used to be, prompting troubled auto maker Chrysler LLC, according to Bloomberg, to kill
its only gasoline-electric hybrid model. The hybrid versions of the Dodge Durango and
Chrysler Aspen SUVs, which only went on sale this month, are produced
at a Newark, Del., factory that Chrysler announced last week it will
shut down by Dec. 31.
While the pullback seems tied to Chrysler's decision to shutter the Delaware facility, it does offer a glimpse into the difficulty automakers might have selling greener vehicles with fuel prices back down below $3 per gallon. The Durango hybrid offers just 19 miles per gallon in the city, compared to 13 miles per gallon for its all-gas cousin, but the hybrid's sticker price is over $5,000 more than a similarly equipped all-gas model. Chrysler has decided, according to a spokesman quoted by Bloomberg, that Durango hybrid sales were unlikely to be sufficient to justify keeping the plant open or moving hybrid production to another facility. Perhaps the move will prove to be an isolated incident, or maybe it is simple housekeeping prior to a potential Chrysler merger with General Motors Corp., its hybrid system supplier. But auto industry observers are watching to see how committed the companies are to green technologies now that gas prices are retreating. Though domestic automakers loudly declared they had found religion and pledged to concentrate more on fuel efficiency this summer as gasoline prices soared to more than $4 per gallon, there will surely be temptation to revert to prior year practices of relying on SUV sales should consumers prove to have a short memory and begin buying gas guzzlers again. In a worse case scenario, an uptick in SUV sales could lead automakers to further delay much-needed restructurings, setting the industry up for more hard times post-slowdown should oil prices move up again. Automakers of course say they have learned their lessons. But given Detroit's terrible recent history of short-sighted decision making, there seems ample reason for concern. - Lou Whiteman See Bloomberg story on the plant closing Lou Whiteman is The Deal's senior automotive reporter CategoriesPrivate capital video
Categories
Blog roll
Archives
| |||||||||||
|
|
|
|
|
