Lutz: Used cars will become more valuable when fuel economy standards take effect

Predicts customers will not want to pay the $5-6K hike for 35mpg+ new cars.

[xfloat=left]http://www.cleanmpg.com/photos/data/501/lutz.jpg[/xfloat]Nathan Bomey - Ann Arbor Business Review - Jan 16, 2008

Seem like more of "The sky is falling" rheortic - Ed

The market for used cars not subject to new congressional fuel economy standards will intensify as the 2020 deadline approaches, a top General Motors Corp. executive suggested.

Bob Lutz, GM's vice president for global product development, said consumers will begin to demand high-quality used cars when the new fuel economy standards enacted by Congress last year take effect in 2020.

Lutz said the average new vehicle would cost an additional $5,000 to $6,000 more than it does today - a direct result of the cost of new technology needed to meet the 35-miles-per-gallon standard levied on cars.

As those price changes start to take effect - which is likely to happen over time rather than all at once - consumers will begin to demand high-quality used cars, Lutz said…[rm]http://www.mlive.com/naias/index.ssf/2008/01/lutz_used_cars_will_become_mor.html[/rm]

 

My perception may be skewed but I don't recall ever witnessing a company that whines as much as GM does. In my lifetime alone they've fought against FE increases twice, emissions regulations two or three times, seat belts, airbags, and others.

They're like a spoiled child who doesn't like being told what to do, even when it's in their best interest or in the best interest of the household.

 

Ahem. SCO Unix.

Mostly, I agree though. GM's claim of massive increases in price for pitifully small FE gains are nothing short of ludicrous. They need to just stop with the complaints and get the Volt platform out -- with plenty of body variations so that there is a wide lineup of efficient vehicles available for public consumption.

 

If I was a reporter, I'd ask Mr. Lutz if the other reaction is GM Silverado buyers would get a Toyota Tundra instead?

 

My old cars more valuable?? WooHooo!! And my Wife says I waste money on old/weird cars. "Honestly, it's an investment Honey"

 

Set the WAYBAC machine Sherman.

Boston Globe reporter John R. White asked GM Chairman Roger B Smith what his company offered that could compete with Japanese imports.

"Why, our answer to that is a two-year old Buick."

-mr. bill

 

That's great Mr. Lutz, but when Toyota and Honda get their 35MPG cars out with little to no premium you can start preparing for bankruptcy...Lutz is just blowing smoke, GM will get it done alot cheaper, they have to...right?

 

Now I get it: The higher fuel prices climb, the more valuable the 12 mpg fleet becomes...

There are still profits to be made in buggy whips and saddlery, too, but those companies are not competing with Toyota.

 

That is an AWESOME analogy!!! LOL!

 

Luddite Lutz is even more of an idiot than I thought.

"If I can't buy an oversized gas-hog new, I'll buy one used..."

Yeah, right.

The man is delusional.

Harry

 

A high quality GM used CAR? Now that’s an oxymoron. He is right it is going to take mega bucks to put a big enough battery pack in a tahoe to get the numbers he needs. You just can not help but wonder if they really are serious about the Volt.

 

Have you driven a 3-5 year old GM product? Toyota & Honda will be winning in the late model used department as well.

 

trade off? you don't buy a more fuel efficient car, you will probably pay just as much in gas as the premium......which doesn't negate the fact that the major auto companies just don't get it.

 

Please someone correct me, but when did Mr. Lutz say anything that was right or relevant in the industry he represents?

If anything, he's shot himself in the foot more times than I care to count... and it is simply amazing that he continues to get any press time.

Cheers;

MSantos

 

Ford's turnaround strategy is black paint and capless.
Chrysler has something to do with cows.
And GM is used-cars, again.

But no worries. Mitt will meet with them.

-mr. bill

 

I'm trying to remember the old quotes about the amount of energy it takes to produce a new car. Maybe the old cars have horible mileage, but wringing another year or two out of them would be all the better for most people. Do we really need to upgrade every few years?

 

I don't get the problem.

We had cheap cars that got more than 35 MPG 20 years ago (see 1988 Honda Civic CRX hatchback).

It reminds me of record companies - they fought TV, , they fought radio, they fought VCR tapes, now they're fighting file sharing.

 

Waaaah-dee-waah-waah-waah. What a whiner. C'mon Bob, it's compete or die. Looks like GM is willing to choose the latter option way too easily.

One thing I know for sure: if demand for "quality" used cars is going to go up, the demand will certainly not be for used GM cars. Other brands' resale values will probably go up while GMs' remain flat, further depressing demand for their new cars.

$5k-6k per car to make them more efficient? Please. Everyone here knows the price premium for hybrid is no more than $2-3k, and the cost premium is certainly lower. A 6cyl diesel for light duty fullsize pickups -- or a clean diesel for the passenger cars -- should cost about the same or possibly a bit less. GDI is probably similar. DSG transmissions that can match MTs' fuel economy while appealing to lazy Americans' demands should be cheaper than that.

And some things reduce cost: smaller cars and smaller engines, for instance. Not every car needs to be able to do 0-60 in 6 seconds! Of course smaller engines and smaller cars also make for smaller profits ... but somehow Honda and Toyota have always managed to make profits on small cars while putting out a superior product.

Of course one of the main reasons the Big 3 have a tough time competing is the massive share of their overhead going to healthcare, something that automakers in other countries don't have to pay for. But I don't expect this to change anytime soon. Looks like GM needs to shift more of their production to Canada to stay competitive.

 

Having thought about this thread for a while now. It almost seems like GM is priming us for it’s next big move…….. Bankruptcy.

 

Or (on the Pollyanna side) are they setting expectations extra low to keep the competition from getting too worried? So that they can just overwhelm us with Volt like vehicles?