Thursday, January 18, 2007

Detroit carmakers push to be greener

Saturday, January 06, 2007
CHANGING MINDS: Last in a four-day series
Detroit carmakers push to be greener
Christine Tierney / The Detroit News

Each year, Detroit automakers spend billions to get on the shopping lists of drivers like Alex Beaty. A Wisconsin factory worker, Beaty, 19, is an ardent environmentalist who drives a 1993 Eagle Summit that gets 42 miles to the gallon on the highway.

He knows U.S. automakers sell more fuel-efficient vehicles than in the past, including gas-electric hybrids, but his next car is likely to be Toyota's hybrid Prius or Honda's hybrid Civic.

"I look at GM from time to time, but if I were to go out and buy a new car, I wouldn't consider GM," he said.

And Ford and Chrysler aren't even on his list.Getting people like Beaty to take a fresh look at their vehicles is one of the biggest challenges facing U.S. automakers.

Nearly one in five prospective buyers polled for an exclusive study conducted by J.D. Power and Associates for The Detroit News indicated that they will not consider a domestic brand -- and 40 percent of them named poor fuel economy as a reason.

Over the past two years, that deeply-ingrained perception has hurt General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.

As gas prices spiked above $3 a gallon, consumers began to shun gas-guzzlers such as big SUVs, which were once a big source of profit for Detroit's Big Three. Baha Fakerdine, who was car shopping last month at Superior Nissan in Dearborn, said fuel economy was the main thing on his mind. "Nowadays, you have to really look at that," said Fakerdine, 42, of Dearborn.

Gas prices have receded from their highs, and sales of some big vehicles are starting to rebound. But auto executives say the recent volatility is likely to leave a lasting imprint in the consciousness of American consumers.

"Fuel economy is going to become more and more important to customers," Mark Fields, president of Ford's Americas division, said in an interview Friday. "Gas prices are not going down."

While U.S. automakers are offering more appealing cars and introducing more hybrids, executives feel consumers are slow to recognize their efforts.

"There's definitely a perceptual gap between how our portfolio is perceived, as opposed to reality, in terms of fuel economy," said Mark LaNeve, GM's head of North American sales.

GM sells 23 vehicles that get more than 30 mpg and its overall fuel-economy ratings are improving, he said, while Toyota Motor Corp. is introducing larger vehicles such as the FJ Cruiser and now, its biggest-ever pickup, a new Tundra. "It's really frustrating to me that more doesn't get written about that," LaNeve said.

A bum rap?

The News' study found that just 4 percent of prospective buyers who indicated they would avoid Asian brands cited poor fuel economy as a reason.

Of those who avoid European brands, 14 percent named fuel economy. But another J.D. Power survey -- the 2006 Automotive Performance, Execution and Layout Study -- found that, compared to American and Asian brand owners, European vehicle owners were the happiest with their models' fuel-efficiency.

"They're big V-8s, most of them, but it's all relative," said Todd Wilson, J.D. Power's director of automotive retail research. "Their feeling is, 'I've got this $60,000 car, it's fast as heck, and I'm still getting 20 (mpg) on the highway. I'll take it.' "

Asian automakers that play in large-volume vehicle segments are less immune to the trends.

While Toyota and Honda Motor Co. increased their U.S. sales and market share last year, Nissan Motor Co.'s sales fell 5 percent as demand for its big vehicles slumped. Titan pickup and Armada SUV sales each fell 17 percent.

Nissan is only now offering a hybrid in the U.S. market, a gas-electric Altima sedan, after balking that the technology was too costly, given the limited demand.

For all the hype, hybrids account for 1 percent of vehicle sales -- but automakers are jumping on the bandwagon because they confer an aura of social responsibility to companies that make them.

Ford was the first U.S. automaker to make a hybrid vehicle and the first in the world to produce a hybrid SUV, the Escape.

At the 2007 North American International Auto Show, Ford is expected to show a concept plug-in hybrid that could be recharged at home using an electrical outlet.

Last year, GM rolled out the Saturn Vue Green Line, an SUV with a more basic and affordable hybrid technology than Toyota's, which adds a few thousand dollars to the cost of a vehicle.

At the Los Angeles auto show in November, GM outlined an ambitious plan to develop technologies for cleaner, more fuel efficient vehicles that can be powered by a number of sources of energy, with a focus on electricity, and said it would develop a plug-in version of the Vue Green Line.

Later this year, GM will introduce "two-mode" hybrids, developed with BMW and DaimlerChrysler that have two electric motors, one geared to add power at low speeds and another at higher speeds. "I believe our two-mode hybrid will be the gold standard technology for hybrids in the industry," LaNeve said.

Competing solutions

GM also is developing fuel-cell cars, which can be emission-free when powered by hydrogen. GM has built 100 fuel-cell Equinox SUVs for demonstration projects.

As a short-term solution, the U.S. automaker is championing ethanol, an alcohol-based fuel made from corn or other starch crops, which can power vehicles built to run on gas or ethanol. Because ethanol contains only 10-15 percent gasoline, vehicles using it consume less oil than a Prius hybrid, LaNeve said.

Oil independence -- or reducing U.S. oil imports from regions ravaged by conflicts -- is one of the concerns driving the quest for higher fuel-efficiency.

The News' survey indicated most consumers interested in fuel-efficiency want to save money. But others are willing to spend more to protect the environment.

"Where we live, everybody's driving a humongous vehicle -- SUV, huge pickup, that sort of thing," said Patricia Ashmore, a programmer at a health care organization who lives in the Dallas area. "I think it's a waste."

Ashmore and her husband bought a 2005 Prius because it was fuel-efficient and environmentally friendly. She describes its looks as "OK. On a scale of 1 to 5, it's probably a 2."

Honda, the first company to market a hybrid in the United States, is trying to increase demand for the vehicles, but believes they will remain niche products unless their cost comes down. "We see the key hurdle as affordability," said Ben Knight, vice president of auto engineering at Honda R&D Americas.

Honda's engineers in Japan are trying to develop a low-cost hybrid to sell around the world.

Cleaner diesel

Honda is also working on a diesel engine that meets emission standards of all U.S. states, including California's stringent levels.

Diesel, about a third more fuel-efficient than gasoline, is also a priority for Germany's automakers. DaimlerChrysler's Mercedes-Benz is showing a concept SUV featuring its Bluetec clean diesel technology at the Detroit show, the Vision GL 420 Bluetec. Equipped with a V-8 diesel delivering 290 horsepower, the SUV gets 24 mpg and can ride 600 miles on a tank of gas.

While automakers will dazzle Detroit auto show visitors with futuristic visions of alternative technologies, some of their biggest gains in fuel economy reflect steady improvements in conventional gas-powered cars.

Ford will display a Lincoln MKR coupe with a direct-injection, 3.5 liter gasoline engine that combines the performance of eight cylinders with the fuel economy of six, according to Ford.

GM and Chrysler have developed technologies that can de-activate some engine cylinders to save gas when the vehicle doesn't need all of its power.

"We continue to update and refine that system," said GM spokesman Chris Preuss. When combined with a six-speed transmission that GM and Ford share, the technology can boost efficiency by as much as 10 percent.

"Our new Silverado pickup gets 22 miles per gallon on the highway," LaNeve said. "Probably 20 years ago, that pickup truck was probably 12." GM is trying to explain the improvements to consumers, and "we're having some effect," he said. "But it takes time."

Detroit News Staff Writers Sharon Terlep and Josee Valcourt contributed to this report. You can reach Christine Tierney at (313) 222-1463 or

© Copyright 2007 The Detroit News. All rights reserved.


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