DaimlerChrysler paid record fuel economy fine in 2007

Associated Press Writer

The former DaimlerChrysler AG paid a record$30.3 million fine in 2007 for violating fuel efficiencyrequirements set by the federal government.

The fine was assessed by the National Highway Traffic Safety Administration against the automaker, which was divided last yearwhen private equity group Cerberus Capital Management LP acquiredan 80.1-percent stake in Chrysler. The fine was reported by theagency in documents posted last month on its Web site.

DaimlerChrysler paid the Corporate Average Fuel Economy, orCAFE, fine for imported passenger cars from the 2006 model year.Most of the imported vehicles from that year were Mercedes-Benzluxury cars, which are part of Daimler AG.

BMW of North America had the previous record, paying nearly $28million in October 2002 for violations related to 2001 model yearvehicles.

Many manufacturers of luxury vehicles regularly consider theCAFE fines as the cost of doing business. The fines, which are paidto NHTSA, were established to ensure that vehicles meet basic gasmileage standards.

President Bush recently signed a new energy law that would setmore stringent fuel economy requirements for the nation's fleet ofnew vehicles, increasing it to 35 miles per gallon by 2020.

For the 2006 model year, the average fuel efficiency ofpassenger cars imported by DaimlerChrysler was 24.8 miles pergallon, well below the current government requirement of 27.5 mpgfor passenger cars.

Donna Boland, a Mercedes-Benz USA spokeswoman, said the fine"would accrue to a very large extent to Daimler on the basis ofMercedes" but did not know how much of the fine was covered by theGerman automaker.

Mercedes-Benz has increased its offering of diesel vehicles,which get 20 to 30 percent improved fuel economy, and plans tointroduce hybrid versions of the M-Class sport utility vehicle andS-Class sedan in the United States in 2009, she said.

A message was left with a Chrysler LLC spokesman.

Five other automakers were required to pay CAFE fines in 2007:BMW ($5.1 million), Porsche Cars North America ($4.6 million),Maserati Automobiles of America ($1.4 million), Volkswagen ofAmerica ($1 million), and Ferrari North America ($842,160).


On the Net:

National Highway Traffic Safety Administration:http://www.nhtsa.dot.gov

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