The auto industry is sending mixed messages about fuel economy. Major car companies are spending billions of dollars advertising affordable 2011 models rated at 40 miles per gallon, and pushing its latest hybrid and electric cars. But then it says consumers don’t care about fuel efficiency.
“I think 40 mpg is kind of a magic mark, at least we believe it is in the industry,” said Tracy Handler, senior analyst at IHS Automotive, in today’s Automotive News. She believes most automakers “can get to 40 mpg relatively cheaply.” Handler added that Chevrolet and Ford “are using that advertising to get people in the door.”
Message #1: Consumers not only care about fuel economy, it’s the hook that’s bringing them into showrooms.
In fact, that 40-mpg message is so important that some automakers produced specialized low-volume versions of some models—like the Eco version of the Chevy Cruze and the SFE version of the Focus—just to be able claim “up to 40 mpg” in advertisements. Those models, using fuel-saving strategies, such as direct injection and light-weighting, reach 40 mpg on the highway, not average typical driving. Only the Hyundai Elantra (and the future Hyundai Accent) will achieve 40 mpg on the highway for all its versions.
Today, only hybrids achieve a combined city and highway mileage of 40 mpg, and one model (Toyota Prius) reaches 50 mpg. (This does not include electric cars like the Nissan LEAF and Chevy Volt, which use little or no gasoline.) Another missing fact: Hybrids are getting even more efficient and the prices are coming down—not to the $15,000 level yet, but with simpler approaches to gas-electric technology and declining cost curves on battery technology, that’s only a few years away.
We Can Do 40 MPG, But…
In yesterday’s Detroit Free Press, Gloria Bergquist, vice president of the Alliance of Automobile Manufacturers—representing 12 vehicle manufacturers including Chrysler, Ford, General Motors, Toyota and Volkswagen—said, “For consumers to really change their buying habits, they must believe higher gas prices are a long-term change, and by long-term, they mean five years or more.”
Window Stickers vs. CAFE
Forty mpg on the window sticker equals about 50 mpg for CAFE (Corporate Average Fuel Economy). With proposed hybrid and EV credits, that number approaches 60 mpg—a figure proposed for 2025.
The Detroit Free Press takes sales statistics out of context—like a ridiculous comparison of sales numbers for the Chevy Volt versus the Cadillac Escalade, or last year’s hybrid sales numbers—to apparently prove that consumers are not considering fuel efficiency. (The Chevy Volt is just ramping up production, and as the Freep mentions, sales of the Toyota Prius are up almost 50 percent this year, now that gas prices are up.)
Message #2: Automakers can’t hit higher fuel efficiency mandates, because consumers aren’t interested.
Ironically, comments from Rebecca Lindland of IHS Automotive stand in contrast to her own colleague, Tracy Handler, at IHS. Lindland said based on studies of past oil spikes, the “American consumer will buy small, more fuel-efficient cars for literally three to four months…and then three or four months later, we go right back to buying big cars.”
Lindland dismisses the 40-mpg magic number theory, and concludes, “The change in consumer buying behavior toward better fuel economy is not aggressive enough to meet the 35.5 mpg standard,” set for 2016.
This declaration seems out of step with the gas price spike of 2011—when automakers are proving they can make serious gains in fuel economy with a dazzling combination of affordable high-mpg gas cars, clean diesel models, hybrids of all stripes, and a wave of new all-electric cars. Just think what kind of cars could be in showrooms during the gas price spike of 2015 or 2020.