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With gas prices so low, will anyone buy a Volt?
Cheap fuel could complicate Cruze launch, too

Chevy Volt Forum - Talk about an awkward position: General Motors, under pressure to be profitable and start selling stock again, is benefiting from relatively cheap gasoline.

But in a few weeks, the Detroit automaker launches the 40-m.p.g. Chevrolet Cruze, then this fall the electric Chevrolet Volt -- of which ultimate success could easily hinge on high gas prices.

"That's perverse," Joseph Phillippi, a longtime industry consultant, said of the small car situation. "I say perverse in the sense that we want gasoline prices to go up so we can be successful selling a car that we make maybe 25% of the variable gross profit that you make on the Tahoe."

Such a concern has long stalked the executive suites at GM headquarters in Detroit. It's something that GM executives acknowledge in private and public conversations as a concern.

Bob Lutz, who retired from GM this spring, was sounding the alarm at last year's Detroit auto show with warnings about low gas prices and suggested that U.S. consumers need more incentive -- such as higher fuel taxes -- to drive fuel-efficient cars.

"If gasoline stays cheap, then the American public says, 'I'm not interested in that; I will keep my Tahoe longer.' It puts us in the industry in a position where we are at war with the customer," Lutz said at the time.

The current average price of regular unleaded gasoline across the nation is $2.76, according to AAA. That's up slightly from $2.67 a year ago but nowhere near the $4.11 national average in July 2008, the highest recorded.

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