Meeting new CAFE regs will cost Detroit double what it costs the Japanese
The average cost for Detroit's Big Three automakers to meet the proposed fuel efficiency targets of 31.6 miles per gallon by 2015 has been pegged at $30.6 billion. In contrast, the average cost for the Japanese automakers sits at less than half that amount at "only" $14.85 billion. These numbers come courtesy of a recent study by Global Insight. In a real shocker, General Motors alone is expected to pay out $15 billion alone. Why the disparity? Simple: the Japanese brands already offer more fuel efficient models. With that reasoning, it seems unlikely that the U.S. companies will get much sympathy from the buying public.Global Insight also predicts that many new technologies which are just beginning to make a dent in sales today will make up a huger percentage of sales by 2015. These new developments include direct injection, turbocharging and diesel engines. Hybrids, the current darling of the fuel efficient crowd, will continue to gain market share, especially as more new models are rolled out which feature the hybrid drivetrain as an option or as standard equipment.
There is a glimmer of hope out there for automakers which are finding it tough to move vehicles in today's troubled climate. Global Insight predicts that there will be a pent-up demand for the replacement of aging models which owners have clung to in the face of high gas prices and a poor U.S. economy sometime around the year 2015.
[Source: Automotive News - sub. req'd]
Reader Comments (Page 1 of 1)
Stéphane Dumas 8:39AM (5/27/2008)
I wonder if someone could do a short movie similar to the documentary Manufacturing Dissent who could show then the more efficients aren't necessairy the more efficient?
Reply
Rocky 9:20AM (5/27/2008)
It won't cost GM $15,000,000,000. I have a much cheaper way to do it: eliminate duplicate models of heavy trucks and SUVs. Chevy and GMC don't need twins of every truck. Eliminate the twins and their gas guzzling truck fleet shrinks by half, pushing up their CAFE numbers.
Reply
SkiD666 9:40AM (5/27/2008)
Rocky, if their truck fleets shrink by half, so does sales and profits, so this would never work. GM would much rather pay the fines.
Reply
Mort 9:45AM (5/27/2008)
I was loyal to Detroit all my life and all they did was $hit on me the entire time. It's dog eat dog now. My next car will definitely be an import. They will have to compete for my business from now on, and that is a game they have no hope of winning.
Reply
gsolman6 10:56AM (5/27/2008)
I think the assumption with those numbers is that with the current size and acceleration figures of what is being produced now. That ignores the easier way say downsizing the average auto size by 10% with the same reduction in engine size. This actually works the other way by costing the manufacturers and consumers less.
So let's see more small pickups and less F-150s. Who really needs a V6 Altima sedan with loads of torque steer when a CVT 4 cylinder gets almost 30 mpg combined and had more than adequate acceleration? Corollas don't need the option of having a 2.4 and neither does the Scion Xb. Hopefully CAFE will cure some of this madness.........
Reply
Randy C. 11:07AM (5/27/2008)
Of this I have no doubt. Near the end of "An Inconvenient Truth" Al Gore shows a chart with the mileage standards of various parts of the world. Guess who had the highest and who had the lowest. Yep the US with less than 25 is at the very bottom and Japan with over 45 is at the very top. It will cost the Japanese less be cause they have a shorter distance to go.
The auto makers are complaining that California is unfair demanding that its mileage standards in 2016 be equal to China's today. So China, which is half way between the US and Japan, is ready to sell cars in California. So who will win?
Before you discredit the film "An Inconvenient Truth", remember Mr. Gore is not making that stuff up. All he has done is gather evidence from all branches of science, the insurance industry etc. and put it together.
Reply
GoodCheer 11:09AM (5/27/2008)
If the Detroit average is $30B and GM is only paying $15B, then Ford and that other guy must be paying $75B between them.
Or am I misunderstanding the meaning of the term "average".
Reply
Unlucky_O 11:24AM (5/27/2008)
These Comments Are Rigged, Fake, Phoney.
All the same person.
Reply
meme 12:33PM (5/27/2008)
"1. I wonder if someone could do a short movie similar to the documentary Manufacturing Dissent who could show then the more efficients aren't necessairy the more efficient?"
Yeah, best of luck showing that efficient cars aren't efficient. :P While you're at it, make a documentary proving that water isn't wet and that the Earth is flat.
Am I to assume that you believe the widely-discredited-by-peer-reviewed-studies myth that lifecycle analyses somehow work out worse for fuel-efficient cars than guzzlers, and that vehicles, which consume many times their own mass in fuel over their lifespans, burning it and releasing it straight into the atmosphere, somehow pollute more by being built (and then later are largely recycled)?
Reply
stas peterson 11:57AM (5/28/2008)
The only problem the automakers will have is getting their truck fleet mileages up to the standard, and that may prove impossible. So auto standards will raise well into the 40s or 50s, to balance lower truck mileage. Fortunately technology is advancing and there is a way for the first time, to do that via PHEVS.
Statistics lie and the un-scientist liar Algore doesn't even know what his own government reports. The US passenger car fleet averaged 32.7 mpg in 2007, with the domestics getting 30.7 mpg.
That was certified by the NHTSA, the offical certifier of CAFE mileage.
http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html
Now in the real world, we know that is a crock, but we are talking about Official statistics. And these are the Official, phony, statistics that the Democrats worked so hard to raise from 27.5 mpg, that, and taxing the automakers, and preventing drilling for oil, was their whole energy program.
Full of (political) Sound and Fury signifying absolutely nothing.
Similarly, The Chinese statistics are as valid as pure driven snow. How dare you criticize the Chinese stats as fabrications. Leftists never lie.
Reply
evster 3:15PM (5/27/2008)
Jeremy,
The title is quite misleading. It ought to be titled:"Big 3 are reaping what they didn't research" or "Big 3 dug themselves holes to meet CAFE standards".
I'll tell you why. Unfortunately your title suggests that the Japanese will pay less to meet CAFE standards which is quite inaccurate. The Japanese has paid in fact much more than GM because they have ALREADY put that money into R&D for the last 10 to 15 years. The ONLY reason that the Big 3 has to pay more now is because they didn't use it before to meet new market demand.
The Japanese have put in more R&D than any American company, that is why they have much less to meet the CAFE standards. In fact that whole country of Japan does more R&D than any country on the face of the earth. Why doesn't America invest more when it is clear to anyone who steps into a tech store in Japan that they are 5 years ahead of us?
Real reason, the Big 3 has poor business plans, poor communications with the actual customer and market, and they don't have any incentive to fix their money-losing companies.
The fastest way for GM to fix their problems, just go mass produce the EV1 and the EV1 hybrid they made in 1996.
Reply
jpm100 3:09PM (5/27/2008)
The Japanese might have to pay more if they could have broken into the large truck/SUV end of the marketplace.
God knows they tried hard enough.
Reply
stevefazek 7:07PM (5/27/2008)
Eh f%&k them they should of seen this comming they hard years of warning. Most MBAs these days are worthless morons who only care about the next quarter. Cash out before you know what hits the fan
Reply
Noah 11:45AM (5/28/2008)
But after they meet the goal of 32 mpg fleet, they also have more volume to sell, thus more profit...in theory.
Reply