GM (and everyone else) may have to revamp product plans to hit 35 mpg
If the energy bill that's currently stalled in the US Senate does ultimately get passed, every car-maker in the US market will have to thoroughly revamp their product lines. This is particularly true for trucks where most companies struggle to achieve mileage even in the low twenties. At a Saturn event in San Diego CA, GM Vice Chairman Bob Lutz again said the 35 mpg would cause a $6,000-7,000 increase in vehicle prices in order to add the required technology that would meet the standard by 2020. That may well be true if people expect vehicles the size of a Chevy Tahoe to hit 35 mpg. According to Lutz, large crossovers like the Saturn Outlook couldn't meet that standard under any current circumstance. If fuel prices increase dramatically over the next decade (a likely scenario) buyers may adjust their expectations and start going for smaller cars instead which wouldn't require the same level of upgrades. The reality is that while GM and other car-makers will be making major changes to their vehicles, they probably won't be making huge changes to their plans at this point. Everyone knew what was coming, and have almost certainly factored that into long-term plans by now. In spite of Lutz's scare-mongering, the Alliance of Automobile Manufacturers, which includes all the major car-makers has endorsed the energy bill, mainly to get something out there that they can start working toward.
[Source: Automotive News - Sub. req'd]
Reader Comments (Page 1 of 2)
MemphisNET 1:06PM (12/09/2007)
American's need to stop being afraid/embarrassed of Mini-vans and Wagons. There is a NEED for SUV's, but few have their heads screwed on properly to realize when they don't need it.
I NEED my truck for work. I can't help that. And I hope nobody would ever blame me for that. It's a HEMI, as I could not afford a diesel at the time. But on my off work hours, I'm almost always in my Neon, which gets a very respectable 39-43mpg on the highway, which is where most of my driving is done. Going forward, I'm VERY excited for the Chevy Volt and wish it the best of luck in meeting their expectations. A diesel is also an option going forward, and hope the new VW 2.0 litres make it into the City Golf and Jetta to replace my Chrysler. (previous-gen VW's that are only sold in Canada). I also hope this new smaller diesel for 1500 series RAMS comes into fruition. 190HP, 400* torque in a sub 4500cc engine. Combined with a 2mode hybrid system would be incredible.
GM is on the right track lately. They're doing a fantastic job lately and I'm sure it will continue going forward.
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susan.kraemer 1:12PM (12/09/2007)
Right. Trucks also need to get lower mileage+co2 emissions, not just cars. GM is surely aware of the 7fold rise in the stockprice of Smith Electric Vehicles since their salesmen were both at the EV show, and conversly the problems with (6 mpg)Winnebago sales.
The solution is out there.
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Cabob 1:24PM (12/09/2007)
I don't get it. GM is already selling cars in Europe through their Opel brand that meet these fuel economy standards. In my mind, it would be relatively easy to just swap the American engine with a European engine and not spend millions of dollars developing new technologies to fit the new rules. I doubt GM will do this.
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Dad 1:21PM (12/09/2007)
"In spite of Lutz's scare-mongering"
And how do you know that he is not speaking the truth? Lutz is in a position to know.
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MemphisNET 1:50PM (12/09/2007)
In theory this would work Cabob, but there must be a logistical nightmare in doing this, as well as emissions, safety, and climate (our climate) issues to contend with. As well as cost, of course. I wouldn't be surprise if the Saturn Astra is a testbed for pricing in North America, since it will be relatively pricier than most of its competition. People still don't see value in American pricing, let alone if you were to raise those prices to accommodate what needs to change to meet these goals.
In fact, Saturn as a whole, appears to be a test bed in Euro to NA transitions. I'm sure they'd bring the engines over if it was cost feasible and kept their costs inline.
GM can't afford to bleed money anymore, so if they can get away with playing it safe for the next 5-10years, and then start expanding on their globlization of their platforms AND drivetrains, they'll be able to meet those standards.
They (and all American vendors) will get there. It doesn't do ANYONE a bit of good for any of the big three to go under.
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1985 Gripen 1:54PM (12/09/2007)
Isn't the 35 mpg mark for an average across the fleet? Why not just put clean diesel engines (with NOx filters and urea injection) into every vehicle and it's a done-deal. I know diesels cost a bit more to manufacture, but it doesn't look as if there's going to be a way around that. Europe seems to "get it", why can't we?
There are other technologies on the horizon, such as GM's HCCI and MB's DiesOtto as well as E-Flex which should increase fuel economy greatly.
Nothing comes for free. Cars will cost more and that's just a sacrifice we're going to have to make to keep from killing our planet. It's a small sacrifice to make, IMHO. My dad has a saying, "you don't sh*t where you eat".
Cabob: GM is bringing the Opel cars to the US and selling them as Saturns. The thing is, the GM cars sold in Europe are available with more fuel-efficient engine options (such as the turbocharged 1.8-liter Saab, whereas the smallest engine in a Saab you can get in the U.S. is the 2.0 turbo). GM would claim that they only sell what Americans will buy and they have research that Americans want "bigger, more powerful, and faster" and won't buy these smaller engines. They only sell what the customers will buy...
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Dave 2:35PM (12/09/2007)
Cabob-
European diesels don't meet US emmissions regs.
Making diesel engines meet US regs is very costly. Most all manufacturers (including GM) are working on it though.
Even VW isn't selling a diesel in the US this year.
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Dave 2:37PM (12/09/2007)
It would be interesting to see what happens if diesel market share increases to ~100%.
Refineries would be left with huge stockpiles of gasoline.
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Mike Z 2:54PM (12/09/2007)
Lutz has clearly been on record that meeting Tier 2 Bin 5 would add about $2,500 to the cost of a diesel engine (about $2,500 to begin with) So basically GM can offer a diesel or a 2-mode hybrid for the same cost, and most increase MPG about the same.
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Tim O. 3:16PM (12/09/2007)
The claim that "35 mpg would cause a $6,000-7,000" increase in sticker price is ridiculous. These companies don't just need to rethink their engine efficiencies but their entire product designs. My car consistently gets over 40 miles to the gallon. 'Oh, he must have a prius or something really expensive' you say. No. I drive a 1990 Honda Civic Hatchback. This car came off the lines in '89, 18 years ago. I'm 18 years old. Kids my age don't drive very slow, I'm no exception. Yet my 100HP five speed stick shift beats everyone off the line and beats them in efficiency at the same time. The car is small and fun, seats 4 comfortably, five as long as I don't sit in the back seat, and six if the sixth wants to sit in the trunk (all with a boatload of stuff too). How could car companies be complaining about having to meet 35 mpg when my car is proof they surpassed this mark of efficiency almost two decades ago?
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Dad 3:33PM (12/09/2007)
"The claim that "35 mpg would cause a $6,000-7,000" increase in sticker price is ridiculous. "
Hmmmm, 18 yo, who never built a production vehicle and now drives a car that would never meet pollution or safety standards. I drove an mid 70's Civic. Great car for a 20 yr old, lousy car in an accident, heavy polluter and rides like a 22 yo vehicle. I am sticking with Lutz.
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GreyFlcn 3:56PM (12/09/2007)
==European diesels don't meet US emmissions regs.
Even VW isn't selling a diesel in the US this year.==
Thats because all the manufacturers are coming out with diesels in all 50 states in 2008.
Now add in the prospect of mild hybrids, which are just a special kind of alternator that can run in reverse, and a small battery, which covers only regenerative braking.
Now add in the lower cost of ownership of a diesel.
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GreyFlcn 4:11PM (12/09/2007)
I don't really buy the $6000-7000 increase in price though.
Thats a higher price premium than what you have to pay for a hybrid nowadays.
And there are a lot more economical ways to increase mileage than go the hybrid route.
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Bill 4:13PM (12/09/2007)
Lots more diesel and hybrid powertrains will have to be coming to meet 35 mpg CAFE.
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Sam Abuelsamid 4:29PM (12/09/2007)
Mike Z, The cost premium to manufacture the 2-mode hybrid system is a lot more $2,500. Right now GM is absorbing most of the cost for the Tahoe/Yukon, but they will have to take a lot of cost out the system to get down to the cost of a diesel.
GreyFalcon, I think the $6-7,000 price tag is partly based on the presumption of getting something with close to the same performance (accel, towing, size, etc) of current vehicles up to 35 mpg. For small cars the cost won't be anywhere near that. To get a Tahoe there will cost a lot more. The overall average would probably be somewhere around that number.
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rgseidl 5:14PM (12/09/2007)
"GM (and everyone else) may have to revamp product plans to hit 35 mpg"
File under "no shit, Sherlock". Of course they'll have to make substantial changes to their product roadmaps. If they were on track to reach the target on their own accord, there would be no need to enshrine it in law.
And of course they have more potential technologies and products in development than will ultimately make it into series production. That's called risk management. Arguably, Detroit didn't do enough of that in the SUV-happy 90s or else, the rapid rise in oil prices would not have caught them all with the pants around their corporate ankles.
Will a 40% increase in fuel economy require a steep increase in the up-front cost of a vehicle? Yes of course. Will it be $6000? Probably not, but Europeans are already paying a significant premium for the more advanced engines, transmissions and lower average weight of their vehicles. Get used to the idea of having to do the same.
Will Americans really spend more in the dealership in order to save at the pump? Some will, of course, but the required sea change in consumer preferences won't happen as long as the segment of the population that is financially illiterate has access to easy subprime loans for huge trucks and SUVs they don't *really* need.
That means Congress needs to pass not just an energy bill but also a loan finance bill. This would impose strict risk assessment procedures on all big-ticket consumer loans, e.g. mortgages and car loans, to better protect both parties against overextending themselves. These procedures would have to be enforced via challenge inspections of sample video recordings of loan interviews and application processing. The inspections would have to be carried out by the credit rating agencies, which in turn would be subject to inspections of their own inspection regimes by a government agency.
Without a hierarchy of quality controls, it will be impossible to curb aggressive and lax lending practices, the rating agencies' consumer data will continue to be garbage-in-garbage-out and, trust in securitized commercial paper traded around the globe will remain at low ebb. This is already causing the pendulum to swing in the other direction, a credit crunch that will be more severe than it needs to be.
Nobody benefits if the US economy goes into recession, least of all the Big Three.
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Mike Z 5:26PM (12/09/2007)
No, you misunderstood me. Lutz is on record as saying that adding a diesel over a gas engine will cost $2,500-$3,000 and Tier 2 Bin 5 would add an additional $2,500 on top of that. So $5,000-$5,500 for a Diesel.
I have it on good word that the 2-mode system right now costs about $5,000. So basically from a cost perspective its even for GM.
What is really pissing GM off is that the new CAFE bill gives them NO credit for the Volt beyond its ~50mpg sustain mode.
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gsolman6 7:24PM (12/09/2007)
Lutz is about as biased when it comes to cars as Rush Limbaugh is when it comes to politics. I would rather listen to the head of engineering from ANY Japanese or European maker as to the feasibility of 35mpg, than to Lutz's political lobbying.
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Dad 7:08PM (12/09/2007)
"And there are a lot more economical ways to increase mileage than go the hybrid route."
Provide a list and it will be read with fascination. Don't just add "diesels".
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Dave 8:57PM (12/09/2007)
"I would rather listen to the head of engineering from ANY Japanese or European maker as to the feasibility of 35mpg, than to Lutz's political lobbying."
"A number of manufacturers choose to pay CAFE penalties rather than attempt to comply with the regulations. As of model year 2002, BMW, DaimlerChrysler (import fleet only), Ferrari, Lotus and Porsche failed the automobile CAFE requirement, while BMW and Volkswagen failed to meet the light truck requirement." - http://en.wikipedia.org/wiki/CAFE
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