GM's Rear Wheel lock-up
CNBC Auto and Airline Industry Reporter
Talk about a catch 22.
After making a big push to jump start production of rear-wheel drive vehicles, General Motors , according to the Chicago Tribune, is putting the brakes on developing more of those cars beyond what's already in the pipeline.
Apparently the weight of rear wheel cars like the new Chevy Camaro (coming out in 2008) and Chevy Impala sedan (out in 2009) will make it tougher for GM to meet higher fuel economy standards that have been proposed by the White House. It's unclear if or when those higher fuel economy standards might go through, but GM knows the score in Washington. Whether it's the Bush administration or whoever moves in to the White House next, the political winds are blowing for better fuel economy standards.
This is a catch 22 for not only GM, but all the automakers. There's greater demand for rear wheel drive cars. People want the performance, the handling, the feel that comes with rear wheel drive cars. There's a market there. But with the auto industry already facing tighter margins, one can hardly blame GM and other automakers from deciding to hold back on building these cars. After all, if rear wheel drive cars will bring down the company's fuel economy standards, or make it tougher to meet government mandated thresholds, someone has to pay. In this case it may be the fans of rear wheel drive cars.
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