http://www.ncpa.org/iss/reg/2003/pd042303e.html NCPA
Japanese Gas Guzzlers Daily Policy Digest Regulatory Issues / Regulatory Issues (Auto Travel) Wednesday, April 23, 2003 As the Ford Motor Company scaled back expectations this month for its first hybrid-powered vehicle and backpedaled on a pledge to improve the fuel economy of its sport utility vehicles, Toyota was introducing its latest Prius, which will get about 55 miles a gallon and be the first midsize vehicle with hybrid technology. For environmentalists, the contrasting developments reinforced the sense that only foreign carmakers care about curbing America's swelling appetite for oil. But the picture is also more complicated -- and bleak, from the perspective of reducing oil consumption: * Toyota, Honda and Nissan are flooding the American market with sport utility vehicles of all sizes. * Toyota and Nissan are redoubling efforts to take on the last largely unchallenged stronghold of Detroit, the pickup truck. * Sales of new-model S.U.V.s from Japan far outnumber gas-sipping hybrids, which supplement the internal combustion engine with electric power. A recent report by Environmental Defense found that General Motor's automotive fleet produced the most climate-warming carbon in the 1990s -- a function of its rank as the largest automaker. But Toyota's carbon emissions grew the fastest, by 72 percent, compared with 33 percent for the market, a function of a product mix that is approaching the truck-heavy tilt of the Big Three. "They're getting all this great green press over the Prius," said John DeCicco, a senior analyst with Environmental Defense, "but their product strategy has moved into trucks big time." Source: Danny Hakim, "Cloaked in Green, but Guzzling Gas," New York Times, April 19, 2003. http://www.nytimes.com/2003/04/19/automobiles/19AUTO.html?ei=1&en=7910 4eddb30e30ee&ex=1051749040&pagewanted=print&position= Cloaked in Green, but Guzzling Gas April 19, 2003 Cloaked in Green, but Guzzling Gas By DANNY HAKIM DETROIT, April 18 - As the Ford Motor Company scaled back expectations this week for its first hybrid-powered vehicle and backpedaled on a pledge to improve the fuel economy of its sport utility vehicles, Toyota was introducing its latest Prius, which will get about 55 miles a gallon and be the first midsize vehicle with hybrid technology. For environmentalists, the contrasting developments reinforced the sense that only foreign carmakers care about curbing America's swelling appetite for oil. "The Japanese are where you go if you want good technology, and Detroit is where you go if you don't," said Daniel Becker, the top global warming expert at the Sierra Club. But the picture is also more complicated - and bleak, from the perspective of reducing oil consumption. Toyota, Honda and Nissan are flooding the American market with S.U.V.'s of all sizes; Toyota and Nissan are redoubling efforts to take on the last largely unchallenged stronghold of Detroit, the pickup truck. And sales of new- model S.U.V.'s from Japan far outnumber gas-sipping hybrids, which supplement the internal combustion engine with electric power. "They're getting all this great green press over the Prius," said John DeCicco, a senior analyst with Environmental Defense, "but their product strategy has moved into trucks big time." As Toyota was promoting the Prius this week at the press preview of the New York International Auto Show, in another corner, Nissan introduced the Pathfinder Armada, its first full-size S.U.V., which is due later in the year. The Armada is as heavy as the Chevrolet Suburban, equipped with up to 14 cupholders and can tow four and a half tons. With a new crop of vehicles named Sequoia, Titan, Tundra and Armada - can Godzilla be far behind? - Toyota and Nissan are making a statement that they will build light trucks as big as Detroit. Honda is also increasing production, but not of the largest pickuplike models. The influx of competition is forcing United States automakers to lower their own prices on sport utility vehicles and pickups and improve their own vehicles to stay competitive. Since 1999, Toyota, Nissan and Honda have introduced 10 new pickup trucks and S.U.V.'s, compared with 3 small hybrid cars from Toyota and Honda; last year, the Japanese Big Three sold about 471,000 of these 10 vehicles in the United States, while Toyota and Honda sold about 35,000 hybrids, according to Ward's AutoInfoBank. And that does not count huge sales of existing S.U.V.'s like the RX-300 from the Toyota Lexus division or the Nissan Pathfinder, to name a few. Mr. DeCicco said that Asian automakers generally performed better, segment by segment, in the environmental ratings that he compiles, but by no means across the board. A recent report by Environmental Defense found that G.M.'s automotive fleet produced the most climate-warming carbon in the 1990's - a function of its rank as the largest automaker. But Toyota's carbon emissions grew the fastest, by 72 percent, compared with 33 percent for the market, a function of a product mix that is approaching the truck-heavy tilt of the Big Three. "In addition to addressing environmental concerns, we have to balance what customers want, and many of them want S.U.V.'s," said Donald V. Esmond, group vice president and general manager of the Toyota Division in the United States. Toyota executives have said they plan to sell 300,000 hybrids a year worldwide by the middle of the decade. "As we introduce more and more hybrid vehicles, Toyota will continue to develop new, efficient and environmentally friendly internal combustion engines," Mr. Esmond added. These market dynamics help explain the regulatory knot in Washington. The current corporate average fuel economy system requires each automaker's annual fleet of passenger cars to average 27.5 miles a gallon. Light trucks, which include sport utility vehicles, pickups and minivans, are required to average 20.7 miles a gallon; the Bush administration is raising that requirement to 22.2 miles a gallon by the 2007 model year. Detroit says the Japanese benefit from the current fuel-economy rules because companies like Nissan have until now built mostly smaller light trucks, so the average miles per gallon for their fleets is above the required average, giving them more flexibility to further increase their advance into larger light trucks. Executives want the regulations revamped to give them more flexibility to build even more light trucks, and the Bush administration is considering such a proposal. The administration has also said it intends to improve overall fuel economy in the years beyond 2007. Environmentalists worry that the upshot will be little progress on reducing pollution or fuel consumption. Further complicating matters is Ford's loss of $5.5 billion over the last nine quarters. DaimlerChrysler is trying to restore Chrysler's profitability. While General Motors has been profitable, its margins are dwarfed by Honda and Toyota, and it has enormous pension and health care obligations that sap its competitiveness while providing benefits to hundreds of thousands of Americans. Consumers favor bigger engines and vehicles than fuel efficiency, "and clearly Asian manufacturers have been on that trend line just like the domestics have," said Christopher Preuss, a spokesman for G.M., whose overall fuel economy performance is the best of the Big Three. The company has committed itself to trying its hand at hybrids, but Mr. Preuss said that thus far "hybrids are inconsequential because their volumes do not approach a significant amount." But for many environmental groups, Toyota and Honda are at least actively selling fuel-saving technologies, while any dialogue with Detroit has been largely abandoned. The Sierra Club, which sees G.M. and its Hummers as a hopeless case because of the company's hard-line stance on fuel regulations, was bullish on William Clay Ford Jr. But trust in Mr. Ford, Ford's chairman and chief executive for the last year and a half, is fading. This week, the company backed away from its commitment to raise its S.U.V. fuel economy 25 percent by 2005 and declined to specify a new timetable. Development problems have also emerged in Ford's first planned hybrid, a version of its Escape S.U.V. When Ford made its much publicized pledge three years ago, G.M. and Chrysler executives said they would outperform Ford but pointedly did not specify a commitment of their own. Mr. Preuss declined to comment on Ford's action, and Stuart Schorr, a Chrysler spokesman, would not address it directly. He said "we have a commitment to increase light truck fuel economy and will continue along that path." Environmental groups say the industry cannot be trusted to regulate itself. Despite technological advances, the rise of S.U.V.'s has pushed the fuel economy of the average new American vehicle to its lowest point in two decades, according to the most recent data from the Environmental Protection Agency. "The Japanese automakers have better fuel economy, but it's unclear if they're going to increase the fuel economy of their overall fleets without the government stepping in," said David Friedman, a senior analyst at the Union of Concerned Scientists. Mr. Becker of the Sierra Club said, "Japanese manufacturers are going to force the Big Three to compete because they're increasing their market share with better technology." "I work on global warming," he added. "I can't lose hope." ------------------------ Yahoo! Groups Sponsor ---------------------~--> Get A Free Psychic Reading! 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