High Gas Prices Are Good For Industry, Says One Dealer

While it seems everyone is looking for a way to cut back on gas expenses, and hoping that gas prices will drop soon, there is one man who thinks the opposite.

Mike Jackson, chairman and CEO of AutoNation Inc., America’s biggest auto retailer, says that the worst thing that could happen is that gas could get cheap again, reports the Wall Street Journal.

Mike Jackson

Mike Jackson, AutoNation chairman and CEO


"For once we actually have viable alternatives and exciting technology that are really game changers," says Jackson. "However, if the price of petroleum goes down … it undercuts the viability of new technology."

He goes on in the story to say that even though large SUV’s and trucks are big profit-makers for dealers, the future of the industry and the national energy strategy are what worries him.

Jackson says he sees a consensus that Americans should use less oil for environmental and national security reasons. For these reasons, Americans will demand more electric and hybrid vehicles, giving way to a huge turnaround in the industry.

On the other hand, Jackson says he sees a consensus that Americans shouldn’t have to pay $4 a gallon or more for gasoline. He says it will be hard to reverse consumers’ thinking that size and power are more desirable in a vehicle than a smaller, more fuel-efficient vehicle.

"We are highly skilled at selling size, horsepower and speed at a premium price, and giving away fuel efficiency," Mr. Jackson says. "Now, going forward over the next 10 years we are going to have to convince consumers why they should pay more for a smaller engine…or some new technology that is going to give them a tremendous benefit on fuel efficiency. That’s a completely new world for us."

"I’m a good car salesman," Mr. Jackson says. "If I have high gas prices and an open-minded consumer, it’s very doable. There is a connection between their needs and what we have to offer them. If we have cheap gasoline, it’s mission impossible."

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