x Abu Dhabi, UAESaturday 22 July 2017

Cadillacs may be dinosaurs but they are not yet extinct

Mr Obama will probably not put up the tax on petrol, which is good news for American motorists and oil producers.

Cadillac Ranch is an art installation, a row of 10 car tail fins buried nose-deep in the Texas Panhandle. Like Easter Island statues, they symbolise the end of a vanished civilisation, or a creature on the verge of extinction. As Bruce Springsteen sang in Cadillac Ranch: "Cadillac, Cadillac Long and dark, shiny and black Open up your engines let 'em roar Tearing up the highway like a big old dinosaur."

His words were prophetic; economic commentators are now queuing up to consign not just the Cadillac, but the entire US car industry to the dustbin of history. The American consumer got there first. New car sales in the US are now at a 50-year low. Much of this is attributable to the recession that had already set in last year, and the high price of petrol. Blame and scorn has also been heaped on the Detroit car makers themselves for failing to read the runes and anticipate the future. Rick Wagoner, the chief executive of General Motors (GM), has been portrayed as a dinosaur, flying in to Washington to beg for aid from the US taxpayer.

The problem was clear to a six-year-old: for too long, Detroit had made the wrong kind of car. Americans had turned against their gas-guzzlers, worried about sunspots and the ozone layer over the Antarctic. They wanted to step out of their giant vehicles and into small, solar-powered vehicles the size of a shoe box. But nobody was making these desirable objects, so people just stopped buying cars altogether. The effect on the economy was catastrophic.

Imagine you are the US president-elect, Barack Obama. You walk into the Oval Office for the first time. In your "in" tray, a number of pressing concerns. There's an invasion of Gaza. A war in Afghanistan. An occupation of Iraq. The closure of Guantanamo Bay. Bill Clinton, the former president, pops in to say hello, no doubt looking over the latest crop of interns, and mutters: "It's the economy, stupid". Doh! Of course, the greatest recession since the Great Depression.

But possibly there is a matter to settle before all of this. Until he does something about petrol prices, Detroit's boom and bust will continue. Detroit did not falter because it was making the wrong cars. Americans love their Sports Utility Vehicles; they are the covered wagons of our age. And they love the V8 engines that power these brutes. The other day I looked at a Dodge Ram, a huge seven-seater with the aerodynamics and aesthetic appeal of an orthopaedic boot. It is powered by a 5.9-litre V8 delivering 230 brake horsepower. There is no reason to build or buy such a car, unless you live in a country where oil is cheap. That's fine in the UAE, but not in the US, where fuel can be expensive.

Except that now the price has declined - down from more than US$4 a gallon in July last year to $1.50 - the consumers are shunning the small, gutless electric cars that Detroit is rushing to produce. Petrol prices are "messing it up", said Robert Lutz, the vice chairman of GM, speaking at the Detroit Motor Show. "Nobody wants small cars. People are buying trucks again." I hate to say this, but this is stating the obvious. It is funny how you don't see any Priuses in the UAE. When I asked the automall salesman whether he had any models, he laughed in my face. I assumed it was because my pronunciation was wrong. But that is when he showed me the Dodge Ram.

Mr Lutz thinks that Mr Obama should create an energy policy that encourages consumers to buy fuel-efficient cars, the type that GM and Ford and Chrysler are now itching to build. They are investing billions - Ford alone plans to spend $14 billion in the next seven years on improving fuel economy. "If you're going to be around, this is the type of thing you have to do," said Michelle Krebs, the senior editor of Edmunds.com, a consumer research company.