Should gasoline hit more than $4 a gallon, based on $125 a barrel for oil, Americans could “freak out” and begin trading in their “Escalades on Minis,” Mike Jackson, chairman and CEO, AutoNation, told CNBC Wednesday.
“In '08, when we had the freakout, three or four months later, everyone wanted their Escalades back,” added Jackson, who, on the news of a strong February in vehicle sales, said he expects sales to rise 11 percent this year over last. AutoNation represents US car dealers.
The price of oil, now over $100 a barrel, has been thrown into uncertainty as political turmoil the oil-producing Mideast region continues.
“The world may have changed from a political point of view, but from as supply-demand balance around oil, I don’t see any fundamental change,” added Jackson. “The Saudis have clearly said they are going to bridge any shortfall.”
Jackson said that the auto industry is “better prepared” for a spike in oil prices, than they were in 2008. “Inventories are a million units lower than in ’08, much more balanced between trucks and fuel-efficient vehicles,” he added, “and every manufacturer now has a full portfolio including fuel-efficiency."
Jackson said that he maintains his full-year forecast for 2011 of 12.8 million vehicle orders in the US.