Italy has some of Europe’s highest gasoline prices, with the liter going for approximately €1.83. This translates, hold on to your wallet, to $8.54 for the gallon. Italy is also the country of steep sales drops. The Italian new car market contracted by 18 percent last April. Fiat is Italy’s biggest carmaker and sustains even bigger losses.
Where others see a disaster, Fiat sees an opportunity. It wants to ignite flagging sales with cheap gas.
Fiat is expected to unveil a marketing offer that lowers the price of gasoline to one Euro per liter – with purchase of a Fiat, Reuters says. Details of the offer are unclear. Reuters heard that “the offer will be based on a calculation of the motorist’s potential mileage, with effects that can last for up to three years.”
Expect the offer to come with reams of fine print. Most likely, a straight cash discount will be converted into gas coupons, pay now, save later style. The offer is doomed to fail.
FIAT is not the only one. With the recent 10% (!!) hike in Petrol (“gas”) prices here in India, Hyundai has come up with a very similar offer about 10 days ago. The effects of this are yet to be seen.
BTW, petrol is $1.4 per liter here which equates to $5.3 per US Gallon. That is huuugely expensive in terms of purchasing power. Taxes account for around 40% of that price
My facebook feed was bombarded with outcries about the recent hike in petrol prices. And yes, $5.3/gal is SUUPER expensive in terms of purchasing power.
I guess no one has seen how energy taxes cripple economies. It’s too easy to fleece people for what they need and then spend it.
I disagree, I don’t see how it’s doomed to fail, this scheme has been used to great success in Canada
I want to hear the proponents of $8 gas chime in here, and tell us how much better off the US would be with it.
Sure it will.
It will be the BEST thing since Revolutionary war. It will force people to see reality of our political system and force them to do something about it. I’m talking about US Goverment.
Shift external costs of sourcing and cleaning gasoline paid for by everyone (people and corporations alike, except for Exxon) to proportional taxes paid for by those who use the most of the resource.
Start with the costs we’re already paying, eg our expeditionary missions in Iraq and the Middle East in general. In an ideal world, the “average” taxpayer would see little or no change in their tax burden. Those who are being subsidized the most heavily would see a greater tax burden, those who are being subsidized little would receive a tax break.
Add in the future costs we’re currently deferring as our limited tolerance for fiscal responsibility allows.
Nice to see TTAC is sticking to its One Grammatical/Spelling/Word Use Error Per Article Rule.
Didn’t Chrysler try something similar in the US in 2008?
I remember that.. offered $2.99/gal or something? And then gas prices fell below $2.00/gal just a few months later!
I remember MG Rover offering a similar deal here in the UK, which didn’t save their sales. Although, I suppose that was in about 2003 or 2004 and it was much cheaper anyway.
It’s amazing that someone at Fiat actually proposed this, let alone that others agreed to give it a try. That’s desperation.
This takes me back. When my mother bought her Omni in 1978(?), the dealer gave her a gas card. It was only good at the station next door to the dealer, so she drove miles out of her way to fill up. I think the original plan was free gas for three months, but people abused that. They’d fill up their new Dodge, then siphon it off into other vehicles. So, the dealer put a gallon cap or price cap on the card.
This offer is valid only in a specific brand of gas station, IP (currently 7% of the market), so this could be an improve for business also for the oil company.