Mileage Bill Trails New Path

Anthony Fontanelle
December 6, 2007

The new mileage bill could give us a hint of the automotive industry’s future. Watchers say the bill will boost vehicle’s efficiency, make cars smaller and lighter, but will add extra bucks on the price sticker.

In the first major overhaul of federal fuel-economy standards since 1975, the House could vote as soon as Wednesday on a sweeping energy bill that would change the rules of the road for automakers, Chicago Tribune reported. The mileage bill would require all vehicles to average 35 miles per gallon by 2020, roughly 40 percent higher than today's standards of 27.5 mpg for cars and 22.5 mpg for trucks. The Senate, meanwhile, is expected to vote before Christmas.

If approved into law, the bill would get more Americans driving the kinds of vehicles conventional in Europe and Japan. The new cars will be compact and powered by small fuel-efficient engines.

"It gives manufacturers the flexibility they were looking for while still providing consumers with the vehicles they demand," said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, an industry trade group that represents General Motors, Ford, Chrysler, Toyota and others. The higher overall standard "means that all boats must rise," he said.

If the 35 mpg standard becomes law, the biggest changes will be under the hood, said Phil Gott, the director of automotive consulting for industry forecaster Global Insight. "There are a lot of things that are bubbling to the surface that are pretty exciting," Gott said, adding gas engines will become more efficient through technologies such as direct fuel injection and high-compression ignition. "But it will be expensive."

"We're already willing to pay that for a Prius" or move up to a V-8 from a V-6, Gott said. But instead of paying more to use more gas, the higher cost will save money at the pump. "The [purchase price] will go up; operating costs will go down."

According to Global Insight, diesels, now a small part of U.S. sales, could account for 20 to 30 percent of the market by 2020. About 45 percent of vehicles will have some form of hybrid technology and turbochargers, which give 4-cylinder engines the performance of V-6s, will abound.

How expensive will the change be? Global Insight estimates it would cost $1,000 to $3,000 more per vehicle for all to average 35 mpg. On a five-year loan, that could boost the monthly car payment by $20 to $50.

The Union of Concerned Scientists, an environmental group, estimates an extra cost of $1,000 to $1,500 per vehicle from the use of turbochargers, direct fuel injection, cylinder deactivation, lighter materials such as aluminum and plastic, and other existing technology.

David Friedman, the group's director of vehicle research, said that consumers would recover the additional cost in two to three years through savings at the pump using $2.50-a-gallon gas for its calculations. "This is a pretty big victory for people struggling with $3-a-gallon gas and concerns about global warming," Friedman added. "For consumers, the biggest thing they'll notice is that their fuel economy will go up and they'll spend less at the pump."

Freidman said that the higher standards could eliminate loopholes allowing automakers to classify cars as trucks to reduce their fleet's mileage. "At the end of the day, you have to hit 35. End of story," he added.

David Cole, the chairman of the Center for Automotive Research, thinks $1,500 gets passenger cars close to 35 mpg. "Trucks are a wholly different picture," Cole said. "The prevailing view of consumers is that they want 100 miles per gallon. But when faced with having to make any trade-offs or to pay for it, that's a different story."

As auto parts like the Acura serpentine belt continue to embrace upgrades, the entire industry is getting ready to walk on a brand new path.

Source:  Amazines.com