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Under proposed new fuel economy rules set by the National Highway Traffic Safety Administration (NHTSA), automakers with powerful short-wheelbase models are going to feel some pain. The agency is considering a plan to create two sliding scales of efficiency for cars and trucks of different sizes. Automakers will be assigned fuel economy standards based on the “footprint” (short wheelbase = small footprint) of their vehicles, and the number of vehicles they sell. Companies like Porsche, BMW, and Mercedes-Benz, independent luxury brands with high-performance models, will be hit the hardest. Interestingly enough, Toyota, Chrysler, and General Motors, big players with diverse model lineups, won’t feel as much pressure.

Conforming to the tough new proposed rules may be very expensive. As a result, some industry executives expect some automakers, such as Porsche, just to pay the fines–it’s less costly than changing a model lineup. Regulators are under the gun to adopt a policy by April 1, 2009. In the meantime, the NHTSA will be taking public comments over the next two months. Time to send ‘em a letter…
[Source: Autoweek]

Thinking of trading your gas-guzzling SUV in for something smaller, a bit more fuel efficient? You are not alone. The rocketing cost of gasoline, and diesel fuel, is having a ripple effect on the SUV market. With consumers trading in their behemoths by the thousands in exchange for more frugal transportation, dealers are stuck with a surplus of unwanted sport-utes sitting on their lots with values dissolving.

Diesel-burning trucks aren’t immune either. As diesel fuel costs hovering about fifty cents per-gallon above gasoline, some of the bigger oil-burning SUVs and trucks are losing measurable resale by the day. Overall, according to CNW Marketing Research, used SUV sales were down 14% in March alone. With any surplus, come big discounts. It may be a ghastly time to fill a 30-gallon tank on an SUV, but it is the perfect time to negotiate with a dealer for that seven-passenger family truckster you’ve been fancying. No need to hurry — there will be an even better selection tomorrow.

Thanks to Jim for the tip!
[Source: U.S. News and World Report]

Remember how the automakers fought against the 35 mpg by 2020 CAFE increase late last year? They are also fighting against possible state-by-state emissions and fuel economy regulations issues that are going through the courts. Following the news today of the NHTSA’s call for cars to reach a 35.7 mpg average (and light trucks reach a 28.6 mpg average) by 2015, the Alliance of Automobile Manufacturers seems to be OK with it. The Auto Alliance issued a statement today (pasted after the jump) wherein Dave McCurdy, the Alliance’s president and CEO says “This proposal represents an important mile marker on the road to at least 35 miles per gallon by 2020.” The Alliance - which speaks for BMW Group, Chrysler LLLC, Ford Motor Company, General Motors, Mazda, Mercedes Benz Usa, Mitsubishi Motors, Porsche, Toyota And Volkswagen - said the automakers “believe this tough, nationwide, proposed fuel economy increase will be good for both consumers and energy security. While these increases will present a challenge, it is critical that automakers and consumers have the certainty that this nationwide, 50-state fuel economy rule provides.” Looks like the potential patchwork policies were more of a stick in the jaw than higher MPG rules.
Press Release:

Automakers Respond to New Nationwide Fuel Economy Proposal

“Congress has set an aggressive, single, nationwide standard and automakers are prepared to meet that challenge. This proposal represents an important mile marker on the road to at least 35 miles per gallon by 2020.” –Dave McCurdy, President and CEO, Alliance of Automobile Manufacturers

· In supporting the Energy Independence and Security Act (EISA) the Alliance and its member companies acknowledge that we have a responsibility to increase fuel economy and limit greenhouse gas emissions from new automobiles.

· This proposed rule would require the industry to achieve fleetwide fuel economy standards of 35.7 mpg for cars and 28.6 mpg for trucks, vans and SUVs by 2015.

· When fully implemented EISA will result in a minimum 40 percent increase in fuel economy standards and a 30 percent reduction in greenhouse gas emissions through 2020.

· Achieving significant reductions in greenhouse gas emissions from automotive sector will require a comprehensive approach involving the vehicles, fuels, and drivers.

· Automakers believe this tough, nationwide, proposed fuel economy increase will be good for both consumers and energy security. While these increases will present a challenge, it is critical that automakers and consumers have the certainty that this nationwide, 50-state fuel economy rule provides.

· Automakers are committed to enhancing energy security and reducing carbon dioxide emissions through the use of alternative fuel autos. Our goal as manufacturers is to offer fuel-efficient vehicle options, with a wide range of attributes, at an affordable price. Last year, more than 1.8 million hybrid-electric, ethanol capable flexible fuel vehicles and clean diesel vehicles were sold in the U.S. That was a 15 percent increase over 2006. This year, more than 70 models of alternative fuel autos are available on dealer lots throughout the country.

[Source: Auto Alliance]

Last December, President Bush signed a new energy bill into law that requires automakers to achieve a Corporate Average Fuel Economy standard of 35 mpg by 2020. This historic stiffening of CAFE standards set a lofty goal, but left plenty of time to get there and new standards of any kind won’t begin until the 2011 model year. Today, which happens to be Earth Day, U.S. Transportation Secretary Mary E. Peters laid out the first set of new CAFE rules that will be implemented for passenger vehicles and light trucks from 2011 through 2015.

The first step on the path to 35 mpg by 2020 will be increases of 4.5% in CAFE standards for passenger vehicles and light trucks over the five-year period spanning 2011 and 2015. This means that standards for passenger vehicles will rise from the current 27.5 mpg to 35.7 mpg by 2015, while light trucks will go from 23.5 mpg to 28.6 mpg. The NHTSA claims the new interim standards will save 55 billion gallons of gasoline and reduce carbon dioxide emissions by 521 million metric tons. They also claim that drivers will save $100 billion in fuel costs over the lifetime of vehicles that fall under the rule.

We decided to reach out to the Big 3 automakers in the U.S. to ask for a comment, and both Ford and Chrysler are keeping mum until they’ve had a chance to read over the new rules. General Motors, meanwhile, already released a statement reiterating what it said last December, which is that it will meet the new standards despite how tough they are.

Automakers are also able to earn credits when they happen to exceed the CAFE standards, and can either bank those for a time when they won’t meet them or even sell the credits to other automakers at a cost below what the fine would be for not meeting the standards. We’ve heard rumors, for instance, that Honda’s sitting on a healthy pile of credits.

Now that we have an actual CAFE target for the auto industry to hit in the near term, expect to see a flurry of activity from automakers. Lithium-ion plug-in hybrids, series hybrids, diesels and all-electric cars will likely be the new technologies that help the industry meet these new interim CAFE standards by 2015, and the first change set for 2011 is not far away at all.

[Source: NHTSA]

The Bush camp hasn’t exactly been extolled for its green virtue over the past seven years, but the administration is trying to make up for lost time by announcing 2011-2015 CAFE targets on Earth Day. Department of Transportation Secretary Mary Peters is scheduled to announce the targets, which are expected to be differentiated by vehicle size, by the National Highway Traffic Safety Administration. Automakers already know they have to get to 35 mpg by 2020, so the 2011-2015 targets should be somewhere between the magic number and today’s 27.5 mpg for cars and 22.5 mpg for trucks.

While news of 2011-2015 fuel economy standards isn’t exactly the stuff that makes blood boil, today’s announcement will help shape what vehicles you’ll be able to buy in the years ahead. Something tells us the horsepower war is almost over.

[Source: Automotive News - Sub. Req.]