Fuel Efficiency
The US auto industry is really in the dumper…
Credible analysts are discussing the very real possibility that GM will file for bankruptcy protection. http://money.cnn.com/2005/06/08/news/fortune500/gm_healthy_hurting/index.htm
Ford lost $1.6 billion dollars last year (It has to be around here somewhere. Think! Where were you when you last had it??). In order to put a stop to such hemorrhaging, Ford is planning to slash jobs and idle plants: 25k-30k jobs and 14 plants by 2012. http://www.msnbc.msn.com/id/10946664/
Reflecting such problems, both Ford and GM have been downgraded to junk bond status. While Chrysler is making money, its bond rating is still anything but good (CCC) and the problems at GM and Ford could show up at Chrysler relatively quickly if its sales slump even slightly.
A lot of people have suggested that the US auto makers are suffering because their offerings have poor efficiency. With the US average price of regular unleaded better than $2.50 per gallon and showing every sign of continuing its steady 4 year climb there are good reasons to suspect that fuel efficiency is an important issue to American motorists. http://www.msnbc.msn.com/id/8533441/
Having said that, the CAFE fuel efficiency standard for cars is 27.5 mpg and for light trucks and sport utility vehicles only 21.6 mpg for MY 2006.
http://www.nhtsa.dot.gov/nhtsa/Cfc_title49/ACTchap321-331.html#32902
http://www.nhtsa.dot.gov/portal/site/nhtsa/menuitem.d0b5a45b55bfbe582f57529cdba046a0/
Since manufacturers are notorious for balking at these standards, complaining that they're just too high, and barely meeting them, that means the standards are a good estimate for the actual average fleet mileage. Further, we can do a quick calculation to show that the average annual travel of 14,500 miles per person costs a car owner getting 28 mpg and paying $2.50 per gallon a total of about $1300 annually or better than $100/month.
http://www.bts.gov/publications/highlights_of_the_2001_national_household_travel_survey/html/executive_summary.html
Given that people haggle for hours over a difference in $50 per month in their car payments, I cannot believe that such a cost is incidental. I'm sure that consumers consider fuel efficiency when buying a car such that consumers seeking high fuel efficiency are being force to turn to foreign-based manufacturers for the vehicles they want.
It's clear to me that the problem is not the engineering required: very efficient vehicles can be produced with the currently existing technology- no fuel cells or uranium or magic dust are needed. One example is the Hayes M1030M1 JP8/Diesel motorcycle. This thing will run on a laundry list of fuels and gets 95 mpg. http://news.thomasnet.com/IMT/archives/2005/03/diesel_motorcyc.html?t=archive
Using those stats as a swag, there's absolutely no reason why US commuter cars shouldn't be getting around half that: 47 mpg. Similarly, a West Philadelphia High School team recently built a car that is supposed to do 0-60 in 4 seconds, gets better than 50 mpg, and runs on nothing more exotic than biodiesel. While the prototype cost was high, the cost for the parts alone composing the sole prototype was estimated between 80k and 100k, every prototype is expensive compared to production models…
http://evteam.gambitdesign.com/gallery/albums.php
http://www.cbsnews.com/stories/2006/02/17/eveningnews/main1329941.shtml
Yes, that's right. The cutting edge automotive technology in the US is being done by urban high schoolers...Why in the world aren't US auto makers trying to emulate these guys???
I conclude that consumers want and will buy fuel efficient cars but that Detroit isn't making them. Moreover, this failure is not due to any technological limitation but rather to plain old lack of vision on the part of the US auto makers. I hope they get their heads out of their rears and build the decent, efficient, high power vehicles that technology allows and consumers want before their competitors drive them out of business…
Credible analysts are discussing the very real possibility that GM will file for bankruptcy protection. http://money.cnn.com/2005/06/08/news/fortune500/gm_healthy_hurting/index.htm
Ford lost $1.6 billion dollars last year (It has to be around here somewhere. Think! Where were you when you last had it??). In order to put a stop to such hemorrhaging, Ford is planning to slash jobs and idle plants: 25k-30k jobs and 14 plants by 2012. http://www.msnbc.msn.com/id/10946664/
Reflecting such problems, both Ford and GM have been downgraded to junk bond status. While Chrysler is making money, its bond rating is still anything but good (CCC) and the problems at GM and Ford could show up at Chrysler relatively quickly if its sales slump even slightly.
A lot of people have suggested that the US auto makers are suffering because their offerings have poor efficiency. With the US average price of regular unleaded better than $2.50 per gallon and showing every sign of continuing its steady 4 year climb there are good reasons to suspect that fuel efficiency is an important issue to American motorists. http://www.msnbc.msn.com/id/8533441/
Having said that, the CAFE fuel efficiency standard for cars is 27.5 mpg and for light trucks and sport utility vehicles only 21.6 mpg for MY 2006.
http://www.nhtsa.dot.gov/nhtsa/Cfc_title49/ACTchap321-331.html#32902
http://www.nhtsa.dot.gov/portal/site/nhtsa/menuitem.d0b5a45b55bfbe582f57529cdba046a0/
Since manufacturers are notorious for balking at these standards, complaining that they're just too high, and barely meeting them, that means the standards are a good estimate for the actual average fleet mileage. Further, we can do a quick calculation to show that the average annual travel of 14,500 miles per person costs a car owner getting 28 mpg and paying $2.50 per gallon a total of about $1300 annually or better than $100/month.
http://www.bts.gov/publications/highlights_of_the_2001_national_household_travel_survey/html/executive_summary.html
Given that people haggle for hours over a difference in $50 per month in their car payments, I cannot believe that such a cost is incidental. I'm sure that consumers consider fuel efficiency when buying a car such that consumers seeking high fuel efficiency are being force to turn to foreign-based manufacturers for the vehicles they want.
It's clear to me that the problem is not the engineering required: very efficient vehicles can be produced with the currently existing technology- no fuel cells or uranium or magic dust are needed. One example is the Hayes M1030M1 JP8/Diesel motorcycle. This thing will run on a laundry list of fuels and gets 95 mpg. http://news.thomasnet.com/IMT/archives/2005/03/diesel_motorcyc.html?t=archive
Using those stats as a swag, there's absolutely no reason why US commuter cars shouldn't be getting around half that: 47 mpg. Similarly, a West Philadelphia High School team recently built a car that is supposed to do 0-60 in 4 seconds, gets better than 50 mpg, and runs on nothing more exotic than biodiesel. While the prototype cost was high, the cost for the parts alone composing the sole prototype was estimated between 80k and 100k, every prototype is expensive compared to production models…
http://evteam.gambitdesign.com/gallery/albums.php
http://www.cbsnews.com/stories/2006/02/17/eveningnews/main1329941.shtml
Yes, that's right. The cutting edge automotive technology in the US is being done by urban high schoolers...Why in the world aren't US auto makers trying to emulate these guys???
I conclude that consumers want and will buy fuel efficient cars but that Detroit isn't making them. Moreover, this failure is not due to any technological limitation but rather to plain old lack of vision on the part of the US auto makers. I hope they get their heads out of their rears and build the decent, efficient, high power vehicles that technology allows and consumers want before their competitors drive them out of business…
posted by Minotaur at 11:22 AM
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