Trend: Gas Watch: GM's Free Gas Conundrum

General Motors announced that it will help foot the high cost of gasoline for auto shoppers in California and Florida. GM is starting a marketing program in those two states that caps gasoline prices at $1.99 a gallon when a consumer buys a certain GM vehicle.

While this may be a clever-enough promotion in normal times, this measure simply doesn't really help the big picture...namely that the gig is up for most of GM's portfolio of gas-guzzling (or perceived gas-guzzling) big cars. And giving away free gas to tempt buyers to buy a car they increasingly don't want is just not a way to market against the Japanese. GM needs to get back in the shop and design cars people want, not try to Jedi Mind Trick us into wanting the cars they got.



some new Gas Stats to chew on:

A new survey by Consumer Reports says that as many as 50 percent of consumers thinking about buying a new vehicle will consider hybrids and 38 percent are considering either flexible-fuel vehicles or diesel vehicles.

Whether or not they are considering a hybrid, consumers are looking to downsize. More than half of those planning to replace their car, 55 percent, said they are thinking about a small car, compared to about one-fifth who are focusing on a family sedan or small SUV.

The 2006 Gas Prices Consumer Intentions & Actions Survey found more than three-fourths of American consumers report high gas prices have cut into their discretionary spending, up from 67 percent in 2005 and 57 percent in 2004.

Memorial Day is the official start of the summer driving season but this year rising gas prices are slowing summer travel plans according to the American Automobile Association.

High gas prices mean people will take fewer trips than expected over Memorial Day weekend and those trips will be closer to home.

The price of gas is the No. 1 reason people give for traveling less or not at all.

The National Retail Federation estimates that nearly half of all Americans will combat the rising cost of fuel by driving less, while another 37 percent will decrease vacation and 36 percent will cut back on dining out.

The 2006 Gas Prices Consumer Intentions & Actions Survey found more than three-fourths of American consumers report high gas prices have cut into their discretionary spending, up from 67 percent in 2005 and 57 percent in 2004.

Fluctuating gas prices are also taking consumers out of the carwash lines, according to recent reports from Professional Car Care Online.

RL Group Inc., the parent of the popular roadside Cracker Barrel restaurant chain reported that quarterly profit fell 10 percent, hurt by high gasoline prices that kept consumers from eating out or traveling.

Restaurant sales at Cracker Barrel locations open at least 18 months fell 2.1 percent during the quarter, as higher check averages could not make up for fewer customers.


via Consumer Affairs