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March 4, 2011updated 08 Apr 2021 8:13am

GENEVA COMMENT: Sky-high oil price as deliberate ploy?

There was no getting away from oil this week at the Geneva show.

There was no getting away from oil this week at the Geneva show.

Despite all the glitzy launches and brave noises coming from manufacturers about corners turned and costs cut, the rocketing price of fuel was the main topic of discussion in the halls and during dinner.

With oil briefly touching US$120 recently, manufacturers are starting to cast ever-more twitchy looks towards world politics, particularly given the current turmoil in North Africa that has seen regimes in Tunisia and Egypt toppled and a bloody struggle for power currently being played out in Libya.

However, given the extraordinarily unpredictable nature of political events across the globe, manufacturers differ in their approach as to the best way to convince consumers to spend on new vehicles.

Some, as Kia UK managing director Michael Cole, believe there is far more to be squeezed out of current internal combustion technology as he commented in Geneva this week.

“I am a believer there is so much you can do with conventional technology,” he said, echoing the views of many that the days of the ICE are certainly not yet numbered.

And as Nissan’s all-electric Leaf starts to be seen out and about on selected European roads, will it in contrast, benefit from the sky-high cost of fuel? One major manufacturer in Geneva this week conceded it would be a crisis if oil reached $200, but could that doomsday scenario ever occur?

This from GM CEO Dan Akerson this week: “I think oil prices are going to increase as we come out of the global recession, we are very aware of that. If Gaddafi would leave office today, oil would probably drop US$5-US$10 a barrel.

“If oil were to see a huge spike, if the Straits of Hormuz were closed, we would see consumer confidence on a worldwide basis, drop. If any CEO tells you different, he is whistling past the graveyard.”

Some have speculated that governments are deliberately keeping their fuel tax take so high to force manufacturers to squeeze every last drop of efficiency from conventional and new, low-carbon technology.

The hard-pressed motorist at the pumps will certainly take a dim view of that, but will such a hard line approach actually result in vehicles becoming ever-more efficient with emissions driven ever lower to boot?

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