Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Study Says Increasing Fuel Efficiency Could Cost Automakers $8 Billion

October 29, 2003

Making cars more fuel efficient over the next 12 years could cost manufacturers more than $8 billion and trigger increased prices for new cars and trucks, according to a new study cited by Dow Jones Newswires.According to Dow Jones, the report by environmental policy organisation World Resources Institute, Washington, D.C., and SAM Sustainable Asset Management, Zurich, Switzerland, looked at 10 vehicle makers with business in the United States, Europe and Japan and found that those with the highest concentration of carbon-intensive vehicles, such as General Motors Corp., Ford Motor Co. and DaimlerChrysler, "may have diminished ability to compete in global markets with adverse consequences for their shareholder value."Consequently, those makers with the most fuel-efficient cars, such as Honda, would have the lowest total costs of meeting any new emissions standards, according to the 73-page report, Dow Jones said, noting that political efforts to cut the emission of so-called greenhouse gases have already led the European Union and Japan to cut carbon dioxide emissions and similar restrictions look likely in other markets, including the United States.Dow Jones said the report, which was not based on any particular emissions rule change, assumes that fuel efficiency standards will gradually become more rigorous over time and that complying with such evolving carbon dioxide emissions standards could cost General Motors $2.2 billion, Ford $2.1 billion and DaimlerChrysler $1.6 billion by 2015. By comparison, the study found such changes would cost Honda only about $53 million.In an interview with Dow Jones Newswires, one of the authors, Duncan Austin, said the report implies that the low fuel economy standards U.S. car makers have enjoyed over the past decade may hurt the companies' ability to compete globally given other nations' more rigorous emissions standards."Whether Detroit likes it or not, they're going to have to depend on these foreign markets for a bulk of their future profits," he reportedly said, adding that investors and portfolio managers need to be aware of the potential impact of tighter carbon-dioxide emission standards when considering buying the stocks of companies that compete within the vehicle sector.Cars are already 99 percent more fuel efficient than in the 1960s through mostly voluntary efforts by automakers, Eron Shosteck of the Alliance for Automobile Manufacturers, an industry trade group based in Washington, D.C., told Dow Jones. Shosteck added that making cars more fuel efficient involves making them lighter, smaller and less able to do the things that consumers want them to do.General Motors spokeswoman Joanne Krell told Dow Jones that the group's study provides only a snapshot of the industry and that the company takes issue with the report's specifics.
Twitter Facebook Google+

Comments

Please note that comments may be moderated. 
Leave this field empty:
 
 

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

FleetFAQ

Fleet Tracking And Telematics

Todd Ewing from Fleetmatics will answer your questions and challenges

View All

 

Fleet Management And Leasing

Merchants Experts will answer your questions and challenges

View All

 

Sponsored by

Xata Corporation provides automated fleet management software solutions to the trucking industry.

Read more

Up Next

More From The World's Largest Fleet Publisher