xcel
03-30-2006, 07:10 PM
U.S. sets higher SUV standard. (http://www.freep.com/apps/pbcs.dll/article?AID=/20060330/BUSINESS01/603300457/1014)
Joe Guy Collier - Free Press Business Writer - 03/29/2006
http://www.cleanmpg.com/photos/data/501/Dodge_Ram_Trucks.jpg
As U.S. automakers cope with one of the most tumultuous periods in the industry's history, they now face a new hurdle -- improve the fuel efficiency of their trucks, minivans and SUVs.
New guidelines unveiled Wednesday by the Bush administration will require an 11% improvement in fuel efficiency over four years starting in 2008. And, for the first time, some of the biggest SUVs, such as General Motors Corp.'s Hummer H2, must meet the new standards.
Environmental groups say the rules aren't tough enough; automakers say they represent a significant challenge.
But in the long run, the rules could help the SUV market by reviving sales, giving customers bigger rides that use less gas and providing hope that U.S. automakers could again count on these vehicles to consistently buoy their profits.
Higher gas prices have driven customers away from SUVs, Mike Strace, business manager of Bob Thibodeau Ford in Center Line, said Wednesday. Improved gas mileage would bring them back.
"I'm sure it will," Strace said. "No doubt about it. The better the mileage, the less money it costs to operate the vehicle."
The new standard might spark a legal challenge by states and advocacy groups over a clause in the final rule that overrides any state laws regulating fuel economy. California and four other states have set their own fuel economy standards, which automakers have sued to stop.
Once huge profit-makers for the U.S. auto industry, gas hungry SUVs have become a controversial subject as gas prices stay above $2.30 a gallon.
In 2005, U.S. sales of the Ford Explorer fell almost 30%, Chevrolet Tahoe sales fell 18% and sales of the Dodge Durango dropped almost 16%.
The new rules will require 2011 models of SUVs, pickups and minivans to get an average 24 m.p.g. The standard is now 21.6 mpg. The rules, starting with 2011 vehicles, also will cover SUVs heavier than 8,500 pounds. Vehicles over 10,000 pounds will still be exempt.
The standards will vary based on vehicle size. Smaller light trucks will have to meet a target of 28.4 m.p.g., more than the current requirement of 27.5 m.p.g. for cars. Automakers may meet the standard through a fleet-wide average until 2011 models, when each vehicle must reach a target based on size.
The fuel-efficiency standard for cars doesn't change.
The new standards will save 10.7 billion of gallons of fuel, according to the U.S. Department of Transportation.
"The new standards represent the most ambitious fuel-economy goals for light trucks ever developed in the program's 27-year history," Transportation Secretary Norman Mineta said Wednesday at a news conference in Baltimore. "And more importantly, they close loopholes that have long plagued the current system."
Automakers said they were still studying the new rules to determine the impact on their vehicles.
They represent a "substantial challenge," said Dennis Fitzgibbons, director of public policy for DaimlerChysler AG. But DaimlerChrysler already is working on more fuel-efficient vehicles, he said.
Last fall, when an initial set of rules was proposed, GM called them "challenging but achievable." In a news release Wednesday, GM said it was reviewing the final changes but was committed to improving fuel efficiency.
GM is reaping the benefits from improving fuel efficiency on its own. GM's new Chevy Tahoe, released in January, gets 22 m.p.g. on the highway and 16 m.p.g. in the city, good gas mileage for a large SUV with three rows of seating. Tahoe sales are up almost 50% through the first two months of 2006, compared with sales last year.
Dan Becker, director of the Sierra Club's global-warming program, said the new rule will save only two weeks of oil over four years and will require minimal technological changes for U.S.-based automakers.
"The Bush administration is giving the Big Three enough rope to hang themselves," said Becker, who is based in Washington. "Americans are voting with their feet by buying Hondas and Toyotas with better technology."
But SUV Owners of America, a nonprofit advocacy group for SUV, pickup and van owners, said the rules were unnecessary.
The new regulation threatens to raise costs for consumers and limit choices as automakers scramble to meet the guidelines, said Ron DeFore, the group's communications director.
The market already seems to be adjusting on its own, DeFore said. Consumer demand, not government regulation, should drive change, he said.
"One might ask: Why would you need federal regulation?" DeFore asked. "Isn't the marketplace going to take care of that?"
Detroit automakers have long been wary of higher federal fuel-economy standards because much of their profits come from larger vehicles.
GM Vice Chairman Bob Lutz once quipped that raising fuel-economy standards to reduce oil consumption was like fighting obesity by forcing clothing designers to make smaller sizes.
Fuel by the numbers
10.7 billion - Number of gallons the government estimates the fuel-efficiency requirements will save on light trucks sold from 2008 to 2011.
2 weeks' worth - The amount of oil the Sierra Club estimates the United States will save because of the new requirements.
24 - Fleet average miles per gallon required for light trucks by 2011.
22.2 - Fleet average m.p.g. required for 2007 vehicles.
21.6 - Fleet average m.p.g. required for 2006 model year light trucks.
27.5 - Fleet average m.p.g. for passenger cars, unchanged by the new requirements.
Joe Guy Collier - Free Press Business Writer - 03/29/2006
http://www.cleanmpg.com/photos/data/501/Dodge_Ram_Trucks.jpg
As U.S. automakers cope with one of the most tumultuous periods in the industry's history, they now face a new hurdle -- improve the fuel efficiency of their trucks, minivans and SUVs.
New guidelines unveiled Wednesday by the Bush administration will require an 11% improvement in fuel efficiency over four years starting in 2008. And, for the first time, some of the biggest SUVs, such as General Motors Corp.'s Hummer H2, must meet the new standards.
Environmental groups say the rules aren't tough enough; automakers say they represent a significant challenge.
But in the long run, the rules could help the SUV market by reviving sales, giving customers bigger rides that use less gas and providing hope that U.S. automakers could again count on these vehicles to consistently buoy their profits.
Higher gas prices have driven customers away from SUVs, Mike Strace, business manager of Bob Thibodeau Ford in Center Line, said Wednesday. Improved gas mileage would bring them back.
"I'm sure it will," Strace said. "No doubt about it. The better the mileage, the less money it costs to operate the vehicle."
The new standard might spark a legal challenge by states and advocacy groups over a clause in the final rule that overrides any state laws regulating fuel economy. California and four other states have set their own fuel economy standards, which automakers have sued to stop.
Once huge profit-makers for the U.S. auto industry, gas hungry SUVs have become a controversial subject as gas prices stay above $2.30 a gallon.
In 2005, U.S. sales of the Ford Explorer fell almost 30%, Chevrolet Tahoe sales fell 18% and sales of the Dodge Durango dropped almost 16%.
The new rules will require 2011 models of SUVs, pickups and minivans to get an average 24 m.p.g. The standard is now 21.6 mpg. The rules, starting with 2011 vehicles, also will cover SUVs heavier than 8,500 pounds. Vehicles over 10,000 pounds will still be exempt.
The standards will vary based on vehicle size. Smaller light trucks will have to meet a target of 28.4 m.p.g., more than the current requirement of 27.5 m.p.g. for cars. Automakers may meet the standard through a fleet-wide average until 2011 models, when each vehicle must reach a target based on size.
The fuel-efficiency standard for cars doesn't change.
The new standards will save 10.7 billion of gallons of fuel, according to the U.S. Department of Transportation.
"The new standards represent the most ambitious fuel-economy goals for light trucks ever developed in the program's 27-year history," Transportation Secretary Norman Mineta said Wednesday at a news conference in Baltimore. "And more importantly, they close loopholes that have long plagued the current system."
Automakers said they were still studying the new rules to determine the impact on their vehicles.
They represent a "substantial challenge," said Dennis Fitzgibbons, director of public policy for DaimlerChysler AG. But DaimlerChrysler already is working on more fuel-efficient vehicles, he said.
Last fall, when an initial set of rules was proposed, GM called them "challenging but achievable." In a news release Wednesday, GM said it was reviewing the final changes but was committed to improving fuel efficiency.
GM is reaping the benefits from improving fuel efficiency on its own. GM's new Chevy Tahoe, released in January, gets 22 m.p.g. on the highway and 16 m.p.g. in the city, good gas mileage for a large SUV with three rows of seating. Tahoe sales are up almost 50% through the first two months of 2006, compared with sales last year.
Dan Becker, director of the Sierra Club's global-warming program, said the new rule will save only two weeks of oil over four years and will require minimal technological changes for U.S.-based automakers.
"The Bush administration is giving the Big Three enough rope to hang themselves," said Becker, who is based in Washington. "Americans are voting with their feet by buying Hondas and Toyotas with better technology."
But SUV Owners of America, a nonprofit advocacy group for SUV, pickup and van owners, said the rules were unnecessary.
The new regulation threatens to raise costs for consumers and limit choices as automakers scramble to meet the guidelines, said Ron DeFore, the group's communications director.
The market already seems to be adjusting on its own, DeFore said. Consumer demand, not government regulation, should drive change, he said.
"One might ask: Why would you need federal regulation?" DeFore asked. "Isn't the marketplace going to take care of that?"
Detroit automakers have long been wary of higher federal fuel-economy standards because much of their profits come from larger vehicles.
GM Vice Chairman Bob Lutz once quipped that raising fuel-economy standards to reduce oil consumption was like fighting obesity by forcing clothing designers to make smaller sizes.
Fuel by the numbers
10.7 billion - Number of gallons the government estimates the fuel-efficiency requirements will save on light trucks sold from 2008 to 2011.
2 weeks' worth - The amount of oil the Sierra Club estimates the United States will save because of the new requirements.
24 - Fleet average miles per gallon required for light trucks by 2011.
22.2 - Fleet average m.p.g. required for 2007 vehicles.
21.6 - Fleet average m.p.g. required for 2006 model year light trucks.
27.5 - Fleet average m.p.g. for passenger cars, unchanged by the new requirements.