Report: GM says new SUVs wont help sales

This is from CNN Money:

DETROIT (CNN/Money) - General Motors rolled out its next generation of sport utility vehicles, saying that they will debut with "significant gains in fuel efficiency, safety, sophistication and design," but a report quotes a GM executive saying that even with the new vehicle's fuel efficiency the segment's sales will be flat.

GM, which unveiled Tuesday its 2007 Chevrolet Suburban and Tahoe as well as the GMC Yukon and Cadillac Escalade, is projecting sales to maintain current levels, according to trade publication autonews.com.

"It is realistic to assume the segment won't grow," said Robert Lutz, GM's vice chairman of global development, was quoted by the trade publication as saying.

Can anyone at GM think of why their SUV sales are slowing? How about $3.00 a gallon gasoline, where it will cost about $70 to fill a tank (And we're not talking about the small 16-gallon fuel tanks here). GM blew it. They bet that Americans would continue to buy up big gas-guzzling SUVs, not thinking of what would happen when gas would go up from $2 a gallon to $3 a gallon--and beyond. They became addicted to the fat profits coming from SUV sales, just as Americans were addicted to the big 4X4 SUVs--many of which would never even be seen off-road. GM never went ahead to invest in hybrid technology, that Toyota, Honda, and Nissan were investing in. Now as gas prices have gone through the roof, the American public is starting to shift to more fuel efficient cars. Toyota and Honda are starting to introduce hybrid cars that are brisk sellers--look at the Toyota Prius. It is only a matter of time before Toyota starts placing its hybrid technology into its best-selling Camry, Corolla, and its Highlander SUVs. Tack on the fact that GM can't raise prices on their SUVs because the Japanese car makers would undercut GM in a price war with an image of a better quality car at a cheaper price, and you can say that GM is between a rock and a hard place, and the water is rising rapidly.

So what is GM doing? Lobbying Congress and the Bush White House--along with Ford and Chrysler--about capping the CAFE standards for SUVs and trucks? Is this going to solve the problem when the American public would simply turn around and buy more Japanese cars? Is that going to solve the problem?