The Oil factor Wanes
Regular gasoline is hovering around $2 a gallon in most of the nation -- $2.25 in Southern California -- and there’s probably little hope of long-term relief. But looking at the latest offerings from automakers, you’d hardly know there was a gas price crunch.
Lots of fuel-swigging sport utility vehicles, pickup trucks and hot performance cars are in the pipeline, and very few gas misers. Industry executives say that’s because most people don’t really want more fuel economy, especially if it would raise sticker prices.
Even if buyers changed their tune, there might not be an immediate surge in fuel-efficient models. Automakers say production schedules are so locked in that if pump prices soared to $4 or $5 next week, they couldn’t respond for several years.
“We can’t turn on a dime,” said Elizabeth Lowery, vice president for energy and environment at General Motors Corp.
Critics say that’s a load of hooey. They point to, among other things, a recent National Academy of Sciences study that says fuel economy could be improved 10% to 15% through the use of existing technologies.
The catch: Installing those technologies would cost about $1,500 a vehicle. As it is, the industry can make big profits from big vehicles, which, the critics complain, is why the major automakers have flooded the market with trucks and powerful sedans and spent millions on ad campaigns to promote them.
“It’s the auto industry that’s been telling us that these are the vehicles we should be buying,” said Michael Flynn, director of the University of Michigan’s Office for the Study of Automotive Transportation. “They do an awfully lot to shape the demand they say they are catering to. They push trucks because that’s where they make their money.”
Indeed, the truck market -- sport utility vehicles, pickups and minivans -- accounts for about half of all new passenger vehicles sold in the United States. Big, luxury-laden SUVs such as the Cadillac Escalade and Lexus GX 470 fetch profits of as much as $9,000 apiece for their manufacturers, analysts say.
And heft robs vehicles of fuel economy. The average weight of a passenger vehicle in the 2004 model year is 4,066 pounds, up 26% from 3,220 pounds in 1987, according to Environmental Protection Agency data.
“It’s a shame, because the auto industry can and should be doing more,” Flynn said.
There is no question that some technologies, notably hydrogen-powered fuel cells, are decades from entering the retail market.
Others, including V-8 engines that can run on only four cylinders when cruising, are already here. And many fuel-efficient vehicles are, in fact, on the road: The U.S. market has three models of gasoline-electric hybrids, which use electric motors in combination with gas engines to deliver power without gulping a lot of fuel. More are on the way.
In all, there are 43 models with conventional internal-combustion engines that are rated at 35 miles per gallon or more on the highway.
Small Slice of Market
The numbers, however, are relatively small and are not expected to grow appreciably in the next few years. J.D. Power & Associates, the Westlake Village automotive market research firm, projects the total hybrid market at 440,000 vehicles a year by 2008, a small percentage of the 16 million to 17 million new cars and trucks sold each year in the United States.
Ford Motor Co., which will launch the world’s first hybrid SUV this summer, is planning to build 20,000 a year. By comparison, the company sold almost 700,000 conventional gasoline-powered SUVs last year.
Toyota Motor Corp., which offers one hybrid model -- the Prius -- and has two in the wings, is the only company that claims to be able to sell them at a profit. Its Japanese archrival Honda Motor Co. sells the other hybrids in the market today -- the Insight and a gas-electric version of the Civic -- though other automakers are developing them and more than two dozen new models are expected to hit showrooms in the next four years.
When it comes to the non- hybrid fleet, moving automakers beyond incremental improvements in fuel economy won’t be easy, said Jeff Schuster, senior director of global forecasting at J.D. Power.
“It will take a push from the consumer,” he said, “or else government regulation.”
The companies are hesitant to take the lead, saying they are not convinced that Americans really want fuel-efficient autos.
“We monitor this very closely, and we have not seen any change in market so far” to indicate a growing demand for such vehicles, said Lowery of GM, which has the best fuel-economy rating of the Detroit automakers but trails Honda, Toyota and Volkswagen of Germany.
But even import brands that boast relatively high fuel economy aren’t racing to step up production of the most efficient models.
Toyota is no slouch in the fuel-efficiency department. Its combined average for cars and trucks of 27 miles per gallon trails only Honda’s 28.6 mpg and Volkswagen’s 27.8 mpg among those of the major automakers. GM and Nissan Motor Co. tie for fourth place at 24.1 mpg, followed by DaimlerChrysler at 23.9 mpg and Ford at 22 mpg, according to Environmental Protection Agency estimates.
But Toyota has been pushing development of large trucks to increase its market share in the United States, and as its truck offerings rise, its overall fuel economy has dropped from a high of 30.5 mpg in 1983.
Dave Hermance, chief environmental engineer at Toyota Technical Center USA in Torrance, sounds like a Detroit executive: “All the historic market data says fuel efficiency is not that high up on people’s list of reasons to buy a vehicle.”
Problem is, some say, that the automakers are basing planning on historic data, not on present realities.
Two automotive shopping and information services, Autobytel Inc. and Kelley Blue Book, say that the overwhelming concern of people using the services’ websites in the last two months has been fuel economy. And a monthly online poll conducted by Kelley and Harris Interactive found that half of respondents who planned to buy a new vehicle in the next year were “seriously considering alternative models due to high gas prices,” said Charlie Vogelheim, executive editor of Kelley Blue Book.
That has not yet translated into a measurable shift in buying patterns, he said. Consumer researchers say gasoline would have to hit $3 a gallon to trigger a significant change.
Some Downsizing Seen
What is clear, Vogelheim said, is that sedan drivers are still looking for sedans but are willing to consider moving from a large one to a mid-size to reduce their fuel costs. Meanwhile, although SUV drivers still want SUVs, some are considering smaller engines or a step down in size to get improved fuel economy.
Rosemary Canfield appears to typify that trend. The mother of three loves her 4-year-old Chevrolet Suburban but lately has turned it into “a storage shed on wheels.”
“We use it to keep stuff in and only take it out if we are going on a long road trip with the whole family,” she said. For her multiple daily trips from her home in Shell Beach to nearby San Luis Obispo and the occasional long drive down to Los Angeles, she uses a Volvo station wagon that gets about twice the mileage of the Suburban.
Switching from Suburbans to Volvos may help cut gas consumption, but making major gains in fuel efficiency will require changes in technology, much of which already exists.
Automakers have a long list of improvements to conventional vehicles they could adopt right now. Among them:
* Turbocharging. A turbocharger compresses the air that is pushed into an engine’s fuel mixture, improving combustion. Although typically used to improve acceleration and top speed, turbos also can be used to boost performance of smaller engines that automakers could use to replace thirstier V-6 and V-8 engines. The fuel economy of vehicles using smaller, turbocharged engines also would be improved by the lower weight of the engine.
* Smart engines. Computer-controlled variable valve timing, variable compression ratios and other internal modifications enable gasoline engines to run under the most efficient conditions at various levels of power demand. Studies show that engines using the entire arsenal of electronically controlled fuel- efficiency components can increase economy by 15% or more.
* Improved transmissions. Continuously variable transmissions that don’t shift at all and multi-range automatics with six or more forward speeds can improve fuel economy by 2% to 4%.
* Cylinder deactivation. As many as half of an engine’s cylinders can be electronically shut down at highway cruising speeds, when extra power for acceleration is not needed, resulting in fuel savings of up to 10%. GM, DaimlerChrysler’s Dodge brand and Honda offer the technology on some models, and other automakers are developing their own designs.
* Electric power steering. Using electronic motors to turn the wheels eliminates the conventional, belt-driven hydraulic steering system, which is a drag on the engine and cuts gas mileage.
* Aerodynamic design. Sleek is more fuel-efficient than boxy. Streamlined surfaces let the vehicle cut through the air like a shark through water, with little resistance. Boxy SUVs and other trucks feature flat vertical surfaces and expend a lot of energy just pushing the air out of the way. The benefits of streamlining can be bolstered by increased use of low-friction tires and of lightweight materials such as aluminum.
* Diesel engines. Widespread adoption of diesel would result in a big improvement in fuel economy. Diesels, popular in Europe, typically get 30 mpg to 40 mpg, even in large luxury cars. But the engines produce far more smog-causing emissions than gas engines do. As a result, diesel passenger vehicles fail to meet emissions rules in California and several East Coast states. Expensive emission-filtering technology would be needed to permit sales in any state when new federal standards take effect in 2007.
Most of the technologies for gasoline engines are already in limited use but often for the purpose of boosting the performance of larger engines rather than cutting gas consumption.
“The technology for fuel economy is improving, but they are using it to keep meeting the EPA requirements while making vehicles that are more powerful and heavier,” Kevin Mills, director of the clean-car program for Washington-based Environmental Defense, said of automakers. “Efficiency isn’t their goal.”
Selling Bigger as Better
The manufacturers, for their part, cite high initial costs as one reason for reserving the advanced technologies for higher-priced performance and luxury vehicles. Buyers seeking the highest levels of fuel economy, they say, also are usually seeking the lowest-priced autos.
So instead of a concerted effort to push fuel economy, there is a drumbeat of marketing campaigns driving home the message that power, luxury and size are paramount.
Even as motorists are crying over triple-digit bills from their gasoline credit card companies, Dodge is plastering major cities with billboards touting the power and performance of its new 4,142-pound Magnum sport wagon with a 340-horsepower V-8 engine.
“It amazes me how much Detroit doesn’t get it,” said Tom Kloza, chief analyst for the Oil Price Information Service in Lakewood, N.J. “They keep thinking gas prices always drop. Yes, they do drop, but from higher and higher peaks. Today’s low is higher than last year’s. Tomorrow’s will be higher yet.”
Automakers “need to be making more-efficient autos,” Kloza said. “It’s a no-brainer.”
(BEGIN TEXT OF INFOBOX)
Big and thirsty
The average U.S. passenger vehicle is getting heavier and more powerful.
Weight (In pounds)
1975 4,060 1987 3,220 2004* 4,066
Horsepower
1975 137 1987 118 2004* 208
Fuel economy (Miles per gallon)
1975 13.1 1987 22.1 2004* 20.8
Percentage of vehicles sold that are light trucks
1975 19% 1987 28% 2004* 48%
*Estimates Source: Environmental Protection Agency
