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In the battle against distracted driving, NHTSA is looking for the authority to regulate the use of smartphone apps while behind the wheel.
Upcoming corporate average fuel economy (CAFE) standards mandate that new vehicles sold in 2025 and beyond will need to get an average 54.5 mpg, a standard that aims to save the U.S. 2.2-million barrels of oil per day.
President Barack Obama called for a 75 percent boost to the U.S. Department of Energy’s research budget today.
Likely behind countless sleepless nights among the world’s automotive engineers, the Obama administration’s mandate for improved fuel efficiency was expected to take effect yesterday, but the gun remains unfired.
Over the last few months, we’ve seen prices at the pumps steadily rise, to the point that the national average is now some $3.90 per gallon.
Some parts of the US, namely the District of Columbia and 10 states, including the likes of California, Illinois, Michigan, New York and Hawaii, are already above the $4.00 per gallon mark (Hawaii is currently the highest at $4.55).
Back in 2008, gas prices rose dramatically, blamed largely on growing demand from tiger economies in Asia (namely China and India), plus a futures market gone wild. Back then, $4.00 per gallon proved the tipping point at which motorists changed their purchasing and driving habits, many trading in large trucks and SUVs for smaller vehicles and simply driving less.
This time however, some analysts say that rising gas prices; blamed on tensions in the Middle East earlier this year (notably conflict in Libya and possible confrontations with Iran), along with a recovering global economy which has seen increased demand for crude, might have already peaked. A recent Lundberg survey noted that oil prices have remained relatively stable in March.
“If crude oil prices do not spike again, then gasoline prices will be peaking very soon. They may already be doing so,” remarked survey publisher Trilby Lundberg.
With around a fifth of US oil refining capacity still idled and the Obama administration appearing to be dragging its feet on boosting oil supplies (the Keystone pipeline saga being one hot topic), there are still fears that the price at the pumps could rise even higher, stalling fragile US economic growth.
That said, according to the Bureau of Economic Analysis, most Americans are spending less on fuel today than they did a generation ago, with 3.7 percent of national spending going to gasoline, as opposed to around 5 percent in the early 1980s.
As a result, despite still being a thorn in the side for most of us, at present, higher gas prices, aren’t generally hurting as much as they used to.
The Chevrolet Volt was a big part of the restructuring deal General Motors had with the Obama Administration, when it applied for bail-out money.
Now that the vehicle is here, it is not without its problems. Sales of this plug-in hybrid have not been great, and these days, everyone is talking about the recent crash-related fires.
In the last few months, some Volt’s have caught fire and many believe it was linked to its battery system.
Now GM is working on a solution to prevent any future fire issues with the battery. The proposed solutions include laminating the circuitry in the battery, reinforcing the case around the battery pack, and better protecting the coolant system from leaks in a severe accident.
The cost of fixing the issue will cost GM roughly $1,000 per Volt, or about $9-million. This solution, if it works, will still be a lot cheaper than it would be to redevelop a new battery from scratch.
Many believe that the government knew about the risks involved with the Volt, but hid the information to give this car a chance to sell. Negative publicity is never a good thing for a new product, especially one it’s banking its future on. A U.S. Housing committee will meet in January to investigate this matter in more detail.
Meanwhile, the Insurance Institute of Highway Safety (IIHS) said on Monday that it does not plan to change its five-star rating for the Volt. The National Highway Traffic Safety Administration (NHTSA) also has no plans to change its five-star rating for the Volt. Consumers look at results from both these parties to determine which vehicles are safe.
Meanwhile, GM’s CEO Dan Akerson said that the company would buy back any Volt from a concerned customer, or provide any loaner vehicle to its customer while the Volt is being fixed. Will this gesture work? Time will tell. But since the Volt wasn’t flying out of the showroom’s in the first place, the current negative publicity could really damage its future sales.
[Source: Automotive News]
Volkswagen was one of several large automakers that did not sign off on the Obama Administration’s proposed Corporate Average Fuel Economy (CAFE) standards for 2025.
“We still have a dialogue going on with the administration in terms of how we think the policy needs to be adjusted,” said Jonathan Browning, CEO of Volkswagen Group of America.
Volkswagen is worried about the current proposed rules that place an unfairly strict rules on passenger cars. Heavier light trucks on the other hand, have much more lenient terms attached to them. Passenger cars maybe required to achieve 5% annual improvements and light trucks may face 3.5 percent annual improvements. The largest trucks on sale face almost no ruling for the 2017-2020 time frame.
“The proposal encourages manufacturers and customers to shift toward larger, less-efficient vehicles, defeating the goal of reduced greenhouse-gas emissions,” one spokesman said.
Volkswagen is also upset regarding the administration ignoring the improvements the German automaker has made to its diesel models. Diesels offer up to 30 percent better fuel efficiency and are installed in up to 80 percent of some VW models sold in the U.S.
“Diesels are growing to pretty much twice the scale in terms of (U.S. sales) of electric vehicles and hybrids together. It’s a technology that is available and affordable…and we think it should be part of the landscape going forward,” Browning explained.
[Source: Wards Auto]
There’s no question that the US Federal government’s proposed Corporate Average Fuel Economy standards have drawn a lot of fire and widespread opposition from automakers, especially as the Obama administration is now pushing for a 56 miles per gallon fleet average target by 2025.
In particular, General Motors and Chrysler, still on the road to recovery after receiving Government assistance in 2008-09 have expressed dismay at the proposed standards, since large trucks and SUVs, which will find the regulations tougher to meet, still represent a sizeable portion of their profits.
As a result, in an effort to win support for it’s fuel economy plan, the Obama administration is considering proposals that would loosen the requirements for large trucks and SUVs, giving automakers, namely the Detroit three, a larger window with which to comply with the new regulations.
This would mean an improvement of 3.5 mpg per year, instead of the 5 mpg increments required by passenger cars and smaller trucks and SUVs.
Import automakers, whose product portofolios tend to focus more on smaller cars and SUVs, claim these changes would give their Detroit rivals an unfair advantage, citing that such proposals would ultimately defeat the objective of the proposed CAFE requirements.
This isn’t first time this year the Feds have backed off on proposed fuel economy standards. Originally ,the mandate for 2025 was a 60 miles per gallon fleet average, though widespread opposition reduced it to the current 56 mpg proposal.
[Source: Automotive News]
President Barrack Obama’s initiative for government fleet vehicles to be able to run on alternative fuels like E85 ethanol, could result in higher gas consumption, rather than reducing it. That means, this project could end up doing the opposite of what it was set out to achieve.
Only 1-percent of gas stations offer E85 in the United States, so only very few government fleet vehicles can take advantage of this fuel. So most fleet drivers end up using regular gas.
And they end up using more of it, because the vehicles they drive, the ones that can run on both regular gas and E85, are not the most fuel-efficient vehicles sold in the country. So while this initiative had its heart in the ‘green’ place, it could ending up increasing green-house gasses.
In order for the President’s plan to work, the infrastructure needs to improve vastly which would increase the availability of alternative fuels.
President Obama recently said that by 2015 he wants to see more fuel-efficient of alternative fueled vehicles to be used in fleets, as part of the plan to reduce dependency on foreign oil. However, hybrid, plug-in hybrid, and fully electric vehicles aren’t as widely available and cost more to buy. Plus they lack the durability that is required by some government fleets.
In 2009, the first year of the Obama administration, government vehicles increased gasoline use by 3-percent. Figures for 2010 are to be released later this year.
[Source: Automotive News]
Last year, the Obama Administration heavily backed Detroit’s automakers with a big helping of government funding. The bail-out money that was partly provided to General Motors and Chrysler, was for these companies to develop and sell hybrids, plug-in hybrids and pure electric vehicles. The end result was the hardly amazing Chevrolet Volt.
However, the Obama administration still wants to help the electric and hybrid car industry, and their latest move to help move such products is to cut funding for clean-diesel and fuel-cell technology.
So while $80-million was budgeted for clean-diesel development in 2010, for 2011 that budget is cut down to zero. Congress had originally promised $500-million over 5-years for this project. Similar cuts have been made towards the development of hydrogen fuel-cell vehicles.
The money that is being cut from clean-diesel and fuel-cell vehicles will now go to plug-in hybrid vehicles. Under the new plan, the $7500 tax break will be given to the customer at the dealership, not when taxes are claimed at the end of the year.
So while this might be great news for anyone who is looking to buy a plug-in hybrid vehicle, this will have an effect on manufacturers who had invested in other technologies. Essentially, those who manufacture clean-diesel or hydrogen fuel-cell vehicles will see marketing their vehicles in North America pointless.
The Obama Administration has made a significant effort to increase the number of electric cars being produced, but according to a new report by Indiana University it won’t meet its goal of getting 1 million electric cars on the road by 2015.
The report indicates that the current ‘production intentions’ of automakers won’t result in one million EVs on our roads by that time. And whether the current production goals set by automakers can even be met is in question, especially with recent reports that GM’s sales targets for the Volt will not be met.
Currently there are only 5,000 electric cars on the roads in the U.S., of a total of 250 million vehicles. And even one million EVs represents just a third of a percent of the total car sales. By comparison, hybrids currently account for roughly 3 percent of annual sales.
Despite significant government incentives created to cut the costs of EVs to consumers, the report calls for more action by the administration, including a larger (government funded?) demo program to help raise awareness.
[Source: The Detroit News]
If you’re a skeptic of electric and hybrid vehicles and think the only reason they’re having any success in the market is because of support through government incentives then you’re going to love this.
According to a new report by Bloomberg, the Obama Administration is responsible for purchasing almost a quarter of all hybrid vehicles sold by both Ford and General Motors. Purchases of hybrids by the administration have also increased as overall retail sales declined. In 2008 hybrids accounted for one percent of all vehicles purchased by the U.S. General Services Administration, while in the past two fiscal years the agency has purchased 14,584 hybrids – roughly 10 percent of the total 145,473 vehicles. Meanwhile, hybrids are approaching their third consecutive decline in sales.
Often credited for not taking bailouts by the Federal Government, Ford has benefited from the 2009 economic stimulus package with a total of 3,100 hybrids being bought out of a $300 million fund. An additional 5,600 hybrids were bought using cash from selling older fleet vehicles. Since Obama took office, his administration has accounted for 14 percent of all Ford Escape Hybrids sold, 29 percent of all Ford Fusion Hybrids sold and 64 percent of all Chevy Malibu Hybrids sold.
And while Ford and GM certainly aren’t the only automakers selling hybrids, they essentially account for all of the GSA’s purchases, with the department having acquired just 17 Toyota Prius models and only five Honda Civic Hybrids in the past two years.
Critics have long criticized government incentives as propping up sales of hybrids, which wouldn’t otherwise sell. Now it appears as though the government is doing far more to subsidize the ‘green car’ industry.
Chevy Silverado, Ford F-150 now included in list of top 10 vehicles purchased
When the U.S. government first released its list of the most popular Cash for Clunkers vehicles traded in as well as those purchased there seemed to be no surprises. It looked like consumers were getting rid of their Ford Explorers for Priuses. But after taking a longer look at the data, it seems that might not have been the case after all, as two trucks, the Ford F-150 and Chevrolet Silverado, were actually among the top ten vehicles purchased under the Clunkers program.
The reason for the change is that the initial listing classified vehicles specific to their drivetrain, meaning that a rear-drive or four-wheel drive pickup would count as two separate trucks. But by looking at just the vehicle model, the Silverado takes now takes the 8th spot, while Ford’s F-150 sits in 10th. Another winner was the Honda CR-V, which moved from outside the top 10 to sixth place.
As a result, three vehicles that are no longer in the top 10 are the Honda Accord, the tiny Honda Fit and (gasp!) the Toyota Prius.
These new numbers suggest that the Obama Administration’s plan to promote the sale of fuel-efficient vehicles might not have worked as effectively as planned, with the average fuel-economy of the new vehicles rated at 19 mpg, as compared to an average of 35 mpg for the three vehicles dropped from the list. No one can argue that the CARS legislation did, however, give a significant boost to the auto industry – if only temporarily.
Major players Ford, Toyota, Honda see gains while Subaru, Hyundai surge
The U.S. auto industry showed continued improvement in the month of August, helped on by the Obama Administration’s Cash for Clunkers program.
Ford was once again a big winner as sales increased 17.2 percent over last August, a significant improvement over the 2.4 percent growth in July – which was thought to be good at the time.
Honda posted a 9.9 percent increase while Toyota pulled itself from the gutters with a 6.4 percent gain.
Unfortunately for GM and Chrysler, the turnaround seems to have left them behind, with GM slipping 20.1 percent and Chrysler dropping 15.4 percent. Both of those numbers are worse than in July, with GM dropping 19.4 percent and Chrysler dropping 9.4 percent then.
Two smaller players in the U.S. market that are now poised to become larger players are Hyundai and Subaru. Hyundai saw an increase of 47 percent, while Subaru posted 51.5 percent growth. Volkswagen also posted growth of 11.4 percent.
Current estimates now put the total number of vehicle sales for 2009 at the 14.4 million mark, a significant increase from the sub-10 million units forecasted during the height of the recession.
[Source: Automotive News]
See the full U.S. Auto Industry August Sales Results after the jump:
U.S. Transportation Secretary Ray LaHood said the Car Allowance Rebate System (CARS), offering incentives for trade-ins, should have enough funding to support one more weekend of sales. Earlier this month, the U.S. government pumped $2 billion into the program on top of the original $1 billion in funding. At the time, LaHood estimated the total $3 billion in funding would last until Labor Day. Looks like LaHood was off by a couple of weeks.
LaHood said there are no plans to expand the program again, but some representatives, including Democrat Sander Levin or Royal Oak, Mich., say Congress should add another $1 billion into the program.
[Source: The Detroit News]
A week after reports that the original $1 billion allocated for the Cash-for-Clunkers program was running low, President Obama today signed into law an additional $2 billion that will keep the program running and fuel a rebounding auto industry.
In just two weeks since the original bill was passed the Cash-for-Clunkers or CARS (Car Allowance Rebate System) has netted $920 million in rebates and has accounted for more than 220,000 new car sales.
The boost to the auto industry has prompted speculation that total car sales for the year, which only a few months ago were pegged at under 10 million, will now exceed the 13 million unit mark.
Automakers are also looking to boost production output as inventory levels have dropped to their lowest levels since 1992. Measured in the number of days worth of inventory a dealer has on its lot, Chrysler dropped its inventory from 71 to 40 days, Ford shed 9 days (from 57 to 48) while both GM and Toyota lost 18 days, from 82 to 64 and 47 to 29 respectively.
New fuel-saving drivelines and transmissions will appear starting in 2010
Auto parts maker and engineering firm ZF Friedrichshafen AG says that its new lineup of driveline modifications and transmissions, when combined, can deliver up to 18 percent better fuel-consumption on traditional gasoline powered cars. The results are even more impressive for hybrids, with total fuel-economy rising 30 percent.
Harald Naunheimer, VP of research at ZF delivered the news at the Center for Automotive Research’s Management Briefing Seminars in Traverse City, Michigan, earlier this week. Naunheimer said all of his company’s new initiatives will make their way into production cars starting next year.
Included in the list of fuel-saving technologies are lighter transmissions with more gears, as well as electric, rather than mechanical, features. Electrical power steering can account for a savings of 2 to 3 percent, while electric active roll stabilizers add another 1 to 2 percent.
A start-stop function, which shuts off the engine at stop lights or when stuck in traffic, can save up to 5 percent while a new, lighter transfer case for all-wheel drive cars can add an additional 1 to 1.5 percent.
The single largest way to boost fuel-economy, however, is with a transmission with more gears. ZF says its new 8-speed box can deliver a 6 percent boost in fuel economy over a six-speed unit. Lexus already uses an 8-speed transmission and BMW recently launched a new 8-speed box in the flagship 760Li (pictured above). This, however, raises the issue of cost.
With an 8-speed in a six-figure BMW, we’re unlikely to see the same technology make it into a Toyota Corolla any time soon. Still, the race is on for improved fuel-consumption as the Obama Administration’s new CAFE regulations will see fleet averages for passenger cars rise to 35.5 mpg for 2016, up significantly from 27.3 mpg for 2011.
[Source: Automotive News]
If you’ve been trying to decide whether or not to trade in your gas guzzler on a new fuel-efficient model and cash in on the government’s $4,500 CARS rebate, you’ve waited too long. The program, funded with 1 billion dollars of tax payers’ money is already running low – just six days after the Obama Administration officially launched it.
According to the NHTSA (National Highway Traffic Safety Administration), by the end of the Wednesday work day dealers had submitted 22,782 claims for a total of $95.5 million.
At that rate the program will run out of money long before the planned CARS (Car Allowance Rebate System) expiration date of November 1st. Reuters cites Bailey Wood, a spokesman for the National Automobile Dealers Association, who speculates the program will run out of funding before the date.
The Cash-for-Clunkers legislation had been criticized heavily before being passed for not being sufficiently funded.
The good news out of this is that if the CARS rebate system is used up (early or not) it is expected to generate as many as 250,000 car sales – something which should help speed up an economy that already shows signs of recovering.
Reuters cites an unnamed inside government source for the tip, who says the CARS program wil be suspended shortly. There is no word on if there are plans to find additional funding and re-instate Cash-for-Clunkers at a later date.
[Source: Automotive News]
New offer means some models discounted by as much as $9,000
In a bid to get inventory moving out of showrooms in a hurry, Chrysler has decided to offer a new incentive program that would double the value of the government’s cash-for-clunkers program.
Chrysler will offer $4,500 off (or 0 percent financing for 72 months) on most of its 2009 inventory – excluding the Dodge Challenger, Sprinter, Jeep Wrangler and all SRT products. The $4,500 incentive is even available on vehicles that do not meet the requirements for the cash-for-clunkers program, which was recently signed off on by President Obama.
Cash-for-Clunkers, or CARS (Car Allowance Rebate System) gives a $4,500 rebate on a new car when it gets 10 mpg or more better fuel mileage than the one traded in. The rebate is $3,500 on vehicles that get 4 to 9 mpg better or trucks that get 2 to 4 mpg better.
Chrysler, now under new leadership from Italian automaker Fiat is hoping the incentive will help sales rebound. Chrysler has been hit particularly hard this year with sales down 45.7 percent for the first six months.
When combined, these two offers mean a $17,090, Dodge Caliber SE could leave showrooms for as little as $8,090.
Chrysler’s “Double Ca$h for Your Old Car,” incentive starts tomorrow and runs through August.
[Source: Automotive News]
Smaller, more fuel-efficient engines likely needed to meet new fuel-economy regulations
BMW is looking at bringing back for-cylinder engines to the U.S. in order to meet tough new fuel-economy regulations. BMW’s engineering boss, Tom Baloga, told Bloomberg that the smaller and more fuel-efficient engines were likely needed in order to meet the Obama Administration’s 2016 CAFE regulations, which call for a new fleet average of 35.5 mpg – up from 27.3 mpg for 2011.
Last year BMW’s fleet-wide average was 26.5 mpg.
Currently BMW sells the 1 Series, 3 Series, 5 Series and X3 with four-cylinder engines overseas, where fuel-efficient diesel options are also popular. In fact, Baloga says that due to the high volume of diesel sales in Europe, the automaker’s current European fleet average would already meet the 2016 CAFE regulations.
BMW currently offers a high-performance 3 Series diesel, the 335d, in the U.S., but Baloga says BMW will not rely on diesels to offset less fuel-efficient models as demand for diesels in the U.S. isn’t high enough to make a difference.
The real issue in bringing over four-cylinder engines, says Baloga, is keeping the focus on performance. That being said, the four-cylinder models are likely to either be turbocharged or used in significantly lighter models.
BMW is also looking at growing its offering of 1 Series models in the U.S., with numerous new models planned. The higher sales volumes of the more efficient engines will also help to increase BMW’s fuel-efficiency fleet average.
Automaker seeks return to former glory with restructured operations and reduced debtload
Today the sun rose on a New General Motors, a move which will also see the sun set on a lot of people’s careers. GM emerged from bankruptcy protection at 6:30 a.m. Eastern Time with news of a serious corporate restructuring plan that will take effect over the next few months.
Due to leadership (and in some cases arm-twisting) by the Obama Administration, the new GM, headed by CEO Fritz Henderson, is poised to return to its once-great status after shedding its debt and healthcare obligations by a massive $48 billion. Much of this comes as the UAW made serious concessions in accepting a new contract with the automaker. GM also hopes to significantly reduce its cash-burn after eliminating a third of it’s dealership network. Additionally, the automaker looks to profit from the sale of the Saturn, Saab and Hummer brands, as well as through selling-off much of its stake in its European operations, including Opel to Canadian autoparts manufacturer Magna International.
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” CEO Fritz Henderson said in a statement.
Henderson’s plan will see 6,000 (or 20 percent of) white-collar employees lose their jobs by October, with 35 percent of all executives being dismissed. Many executives will be cut from the company’s old Automotive Strategy Board and Automotive Product Board, a complex, multi-tiered system of management which will be axed in favor of a small committee that will meet weekly to make decisions about the future of the company.
Henderson says the move will cut those making the decisions at GM in half as the automaker focuses on its four key brands – Chevrolet, Buick, GMC and Cadillac.
Sales and Marketing will also no longer be under the leadership of one individual, as that part of the company is split. Sales will report directly to Henderson, who was unclear about what that meant for the current Sales & Marketing boss, Mark LaNeve. GM will also bring back veteran Bob Lutz to manage marketing, as well as design, brands and communications.
This will be a particularly vital role as GM looks to introduce a new line of vehicles into the marketplace to help re-brand the company. In total 10 new vehicles will launch in the U.S. in the next 18 months, with 17 overseas.
[Source: Automotive News]
Late Sunday a judge approved the sale of GM’s assets to a group comprised of the U.S. government, the UAW and the Canadian and Ontario governments under the name NGMCO, Inc. The decision will see GM exit bankruptcy court quickly with the ‘New GM’ assets going to NGMCO, while the ‘Old GM’ assets will be sold off to the highest bidder.
Judge Robert Gerber then placed a stay on the proceedings to for four days to hear objections or appeals, but as most of those have already been dealt with, GM is expected to reemerge as a new government-owner company by Thursday.
In a statement Judge Robert Gerber said that he would, “prevent the death of the patient on the operating table.”
Gerber pointed out the seriousness of the matter and the alternative, stating that, “The only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”
The New GM will be majority owned by the U.S. government with a 60 percent stake in the automaker. The UAW will get 17.5 percent, while the Canadian and Ontario governments will get 12 percent.
In response to the news GM’s CEO Fritz Henderson released a statement saying that, “A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”
The Obama Administration’s auto task force has said that sale of GM back to the private sector could begin as early as next year.
[Source: Automotive News]
After passing through both the Senate and the House, the Cash-for-Guzzlers bill has been signed by President Obama. Known also as Cash-for-Clunkers, the official name of the legislation is CARS – the Car Allowance Rebate System.
Vehicles that are traded in must get 18 mpg or worse and be newer than 25 years old. For those who trade in their guzzler for a vehicle that gets (on average) 4 mpg more will receive a $3,500 voucher toward the new car, while those who choose a vehicle that gets 10 mpg more than their current auto will receive the full $4,500.
The rules are slightly different for trucks as the full $4,500 voucher will be available for gas guzzling trucks when traded in on a new truck that gets 5 mpg more.
The hope is that this new legislation will boost auto sales. Similar initiatives (but which target old cars and not gas guzzling ones) have been a huge success in countries like German.
The CARS act will take effect at the end of July.
Those looking for more info can visit the CARS website here: