$4 Gas Has Consumers at 'Tipping Point': AutoNation CEO
Americans, says Mike Jackson, chief executive of AutoNation , have finally reached a "tipping point" with gasoline at $4 a gallon.
Jackson joined the crew of CNBC's "Squawk Box" to discuss the impact higher gasoline prices are having on consumers and the automotive industry.
"At three dollars a gallon, we got a lot of talk but no change in behavior. It was viewed as a spike and that we would return to low prices. At $4 a gallon, there’s a definite change in behavior, and the consumer mindset is at a tipping point. The consumer’s becoming convinced that they face higher gasoline prices open-ended, and therefore they’re changing their behavior, and the migration away from truck-based sport utility vehicles is underway."
He added that driving patterns have also started to change.
"Households have more than two vehicles in each home, and they’re leaving the sports utility at home and driving the vehicle that has better fuel economy for their errands," he said. "So mileage driven and gasoline consumed in the United States, for the first time in decades, is actually declining.” (See the entire interview in the CNBC video at left.)
But higher gasoline prices are not without benefits, according to Jackson.
"Higher gas prices are necessary if we’re going to have conservation, and what we were doing as a country and as an industry is absolutely unsustainable," he said. However, Jackson said the country is in need of a coherent energy policy. He suggested a gas tax that would both decrease consumption and benefit the United States.
“The way we’re doing it without a policy, America is now exporting $600 billion worth of capital a year to countries like Venezuela…That’s a genuine national security risk to be sending that kind of money into Venezuela, through the Middle East," he said.
Jackson looks to technology to give the U.S. a chance to get itself out of the ongoing energy crisis.
"Within five years, commercially available electric vehicles are going to be offered to our customers, [and they] are very viable. Yes, they’ll be a bit expensive, but they’re going to be there, and that’s a game changer," he said.