Lower gas prices: we’ve all heard auto industry leaders say that this is one of the main reasons why the industry is so hot right now, but how long will gas prices stay low? Well, longer than you might think, according to GM Chief Economist Mustafa Mohatarem.
The Montgomery Advertiser reports that while at an economic summit recently, Mohatarem said he heard predictions of a return to $80-a-barrel crude, but he isn’t buying it. Instead, he told the crowd, “I’m very confident that oil prices are going to remain low for a much longer period than most people think.” He compared the current drop in prices to 1985, when oil crashed after a six-year boom period and the marketing settled into two decades of low prices.
Mohatarem predicted that U.S. auto sales will hit a new all-time high by next year, saying, “This is a great time to be in the auto business in the U.S. We’ve gone through some tough times, but now it looks like everything is going right.”
In the meantime, AAA says the price per gallon of gas is down $1.14 from a year ago, and the average price of gas is at its lowest level in a decade.