Cheap cars in Asia, expensive gas everywhere

The debut of the $2,500 car is just another reason Americans will pay more at the pump, and highlights a need for some creative urban planning in the developing world.

NEW YORK (CNNMoney.com) — The debut of the $2,500 car may be billed as a mobility breakthrough for billions of people in the developing world, but for U.S. motorists it could mean one thing: higher gas prices.

Rising demand from the developing world has long been cited as a main driver behind the runup in oil prices. That demand will only get more intense with staggering growth in car sales – and by extension, gasoline use – in places like India and China.


“We’ll get into a situation where we’ll have to compete with them for gasoline, $4, $5 a gallon, who knows how high we could go.” said Peter Beutel, an oil analyst at the consultancy Cameron Hanover.

He says that time could come much sooner than 2015, when light vehicle sales in India are expected to total over 3 million – doubling 2006 sales – according to J.D. Power & Associates. In China they’re expected to nearly triple – to over 17 million – roughly on par with projected sales in the United States.

CNN