US: automakers start questioning fuel economy goals image

The US auto market has risen to pre-recession levels last year, signaling the rapid pace of the overall recovery seen in the largest world economy and the second biggest global automotive market.

Today, auto executives and analysts seem to have all of their porches planted with roses and the lawns mowed – meaning the 16.5 million strong sales accounted last year are expected to be surpassed by the continued customer demand – and predictions range from 16.7 to 17 million for 2015. But looking further ahead we see clouds gathering on the blue skies even as the health of the US auto industry is far better than that of the European or Latin American regions. But courtesy of the incredible slump in oil prices that led gasoline reach a $2 a gallon level these days, a vexing problem is surfacing. Us customers have rekindled their lost love for pickup trucks and SUVs and crossovers – and these vehicles are well known for not being very fuel-efficient.

That means the market is driving itself miles away from the fuel-sipping small cars or electricity-powered vehicles that all automakers have invested in, expecting for a greater mix of the latter as time is running out and they need to meet tougher government emissions regulations. “It’s the CO2 stuff that’s wagging the dog more than anything else,” commented Fiat Chrysler Automobiles chief executive Sergio Marchionne in his usual manner – as he tends to say out load what other top managers whisper behind closed doors. The truth is that even as the disconnect between sales trends in the United States and fuel economy demands seems to be wider by the day, automakers can’t afford not making fuel efficient small cars or invest in electric – battery or fuel cell powered – cars, because the US government seems to have no intention of changing its threshold for fleet-wide average fuel economy – carmakers need to reach an average of 54.5 miles per gallon by 2025.

Via Reuters