GM: ’07 diesel pricing could propel gasoline

GM: ’07 diesel pricing could propel gasoline

NASHVILLE, TN. The medium-duty market could swing toward gasoline-power as price premiums are levied on diesel-power, thanks to the EPA ’07 emission rules, a General Motors executive said

NASHVILLE, TN. The medium-duty market could swing toward gasoline-power as price premiums are levied on diesel-power, thanks to the EPA ’07 emission rules, a General Motors executive said. That could boost the percentage of gasoline-powered vehicles sold by GM to 30% from its current 20% level.

GM estimates that 2007 emissions rule changes will add $3,000 to $6,000 to the base price of its diesel-powered medium-duty trucks, with diesel-powered light-duty trucks costing $1,500 to $2,000 more. However, Ross Hendrix, marketing director for GM’s fleet and commercial operations, believes those price jolts could also provide a silver lining by attracting more interest in its gasoline-powered truck options.

“Right now, if you take out several of our biggest customers like Asplundh and U-Haul that only spec gasoline engines in their trucks, gasolinebengines make up about 20% our medium-duty truck orders today,” Hendrix told FleetOwner here at a GM ride and drive event.

“However, the ’07 costs issues – with emission rules adding substantial costs to diesel engines as well as mandating the introduction of higher-priced ultra low sulfur diesel [ULSD] fuel and more expensive low-ash engine oils – could foster a swing by some medium-duty customers to gasoline engines,” he said. “Many of our accounts don’t run their trucks more than 25,000 miles a year, so they really don’t need a diesel engine and could save money by making the switch to gasoline.”

Hendrix added that improvements to gasoline-engine fuel economy, due largely to the growing use of Allison automatic transmissions, put it roughly on par with diesel-engine fuel economy today in the stop-and-go operating environments most medium-duty trucks work in. Maintenance costs between the two are roughly equal, he said.

“Even in terms of fuel prices today, it’s pretty much a wash between gasoline and diesel,” Hendrix noted. “In the past, diesel used to be on average 30 cents cheaper. Today it’s maybe a few pennies lower.

“In 2010, we could see an even greater swing as even more complicated emission technology is brought to the table,” he added. “But we’re ready for that. If the market demands a 100% switch to gasoline [engines], we could do that – we have that production flexibility.”

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