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So you think you’re paying high gasoline prices? Consider in the Netherlands the average price for a gallon is $10.05 and we don’t hear the Dutch crying about it. In every European country the bottom line is more than $7, even Ireland, which pumps its own oil.
The point is Europeans are used to paying well over $5 for gas, largely because of taxes that make the surcharges John McCain wants to remove look penny ante. In Belgium, for example, $5.27 of the $9.23 price at the pump is taxes.
OK, now if you want the other extreme, consider Venezuelans (swimming in oil) pay only 25 cents a gallon with no taxes at all. Iranians pay 41 cents, and Saudis 50 cents. Even the Iraqis, whose oil industry has been mightily disrupted by the war, still pay a subsidized $1.74. The Middle East may, in fact, be a good export market for North America’s increasingly unwanted Hummers.
High gas prices are shaking the foundations of already-weakened General Motors. All 74,000 U.S. hourly workers represented by the United Auto Workers have been offered buyouts. Last week the world’s largest industrial corporation announced it will consider eliminating some of its brands, everything other than bedrock Chevrolet and Cadillac. Oldsmobile has already disappeared and that means venerable Pontiac and Buick are up for consideration, as well as upstart Saturn and Sweden-based Saab, which could easily be spun off. The company will definitely get rid of Hummer, either by selling the brand or just closing it.
Ford is taking a serious look at the Mercury division. "An ageing fleet, dying sales and lack of image is causing the Blue Oval’s middle brand to slowly wither away," Motor Authority reports. Lincoln is temporarily safe because its sales are better. Chrysler, very tentative these days, has eliminated much of its "badge engineering" (similar competing nameplates on the same platform). The company has already killed the PT Cruiser convertible, the Pacifica, the Crossfire and the Dodge Magnum.
The European carmakers will go through similar paroxysms, especially because gas prices are only going up and labor costs are so high.
BMW announced a 17 percent drop in profits last April, with worldwide sales down 5.4 percent in March. Luxury cars are having a hard time in the current market. I’m heartened by the BMW 128 and growing concern for the bottom end of the market, but where’s BMW’s hybrid?
My tester this week is a 335xi with lots of rah-rah features, including a three-liter, six-cylinder turbocharged engine producing 300 horsepower, all-wheel drive and lots of electronic controls. But a price starting at $43,000 on what remains a smaller BMW may drive some potential buyers (worrying about their mortgages, after all) away from the marketplace.
The car was great fun to drive, with pinpoint-accurate steering, incredible acceleration and hugely responsive brakes, but its backseat lacked legroom (as in most coupes) and was not greatly accessible. My smaller Honda Fit has more storage space.
I know its sacrilege for "car guys," but fuel economy is our future.
