Here's an article I read on my way home from the office tonight. If they anticipate a $6000 increase for the US, I'm scared to think about how expensive cars will become in Canada considering the premium that already exists. This can only spell bad news in a market that is already decreasing and an economy that could be heading towards a recession.

GM says new fuel requirements to add $6,000 per car
Tue Jan 15, 2008 7:23pm GMT

By Jui Chakravorty Das

DETROIT (Reuters) - New fuel efficiency requirements imposed by Congress will add, on average, $6,000 to the price of GM vehicles sold in the United States, the automaker's vice chairman and product chief said on Tuesday.

Congress passed a new energy law in December 2007 that requires automakers to increase fuel economy across the industry to 35 miles per gallon by 2020 -- up 40 percent from current levels.

"We've done the research and it's going to cost us $4,000 on some vehicles and $10,000 on others, with an average of about $6,000," Bob Lutz told reporters at the North American International Auto Show.

"That cost will have to be passed on to consumers," Lutz, a long-time vocal critic of federal fuel regulations, said.

Lutz said the law -- the first mandated increase for passenger car fuel economy in more than two decades -- will force GM to make vehicles lighter.

"We can make the 35 miles per gallon with vehicle size structures more or less like they are today but we will have to restrict our choices when we decide what we want to make next," Lutz said.

Lutz said one example of the restriction in choices is that GM is now reversing its decision to make rear-wheel-drive versions of some vehicles because those models use more fuel.

"We probably have to take a lot of weight out of the vehicles. We will have to use some premium materials like more aluminum, more magnesium," Lutz said. "Which gets you the weight savings but drives the cost up."

"But we are going to try as much as possible to preserve the size of the vehicle the American public wants to buy."

PREMIUM SMALL CAR

Lutz also said GM is looking at entering the premium small car segment in another effort to gain more fleet-wide fuel efficiency.

"We are looking at it," Lutz said. "Making smaller cars that cost more will be part of the process to get to the 35 miles per gallon."

GM's North American sales Chief, Mark LaNeve, earlier Tuesday told Reuters the automaker is seriously considering developing a car for that segment, which would likely be branded a Saab, Hummer or Cadillac.

The luxury subcompact is a category most automakers in the United States have stayed away from so far.

BMW (BMWG.DE: Quote, Profile, Research), the world's largest premium carmaker, is the only automaker to succeed with a small luxury car in the U.S. market -- its Mini Cooper.

Volkswagen's (VOWG.DE: Quote, Profile, Research) premium brand, Audi, is expected to challenge the Mini with a new luxury subcompact called the Audi A1 in 2009.

(Reporting by Jui Chakravorty, editing by Richard Chang)

 

Hi Mike,

Two things come to mind reading the article, I wonder if the manufactures are just crying wolf (as usual) to stop the legislation or with the eventual elimination of fossil fuels (what Ralph used to call dinosaur farts) if this is what we have to pay to drive cars before it all runs out?

What I would really like to know is how you can drive home from work and read the paper at the same time, is that really safe?

 

The 2 worst 4 letter words when it comes to cars are Smog, and CAFE. Regulation has ruined something great

 

Old Ray, I'd like to think that this is just an attempt to divert a bad image away from themselves and onto the government. I think that GM might see an oppurtunity to make more money off vehicles with these new regulations by saying that things like: "we need to do this and this and this in order to meet such guidelines and because of that we have to jack up the prices." I'd like to think that fairly minor improvements to fuel efficiency will not cost that much. I think where GM might start to feel a bit of a crunch is in the sale and production of large trucks and SUV's (which, if I'm not mistaken, are huge profit making vehicles.)

I think some clever bean counter (or corporate fat-cat) has seen a price increase oppurtunity that can be blamed on somebody else and they are trying to run with it!

As a side note: I always read the news on my commute to and from work because I take the train down to my office. This way I rarely use my car and hence don't pay a lot in gas, I don't have to pay $25 to $35 a day for parking and it is a little bit quick (a lot quicker on days when traffic is really bad) plus I get to read the news or other things.

 

I think that everyone has made some valid points. But I remember GM doing the same complaining when CAFE was mandated, when EPA requirements were mandated, when the 3 mph bumper was mandated, etc. etc. So I'm not overly concerned.

Besides that $6000 is over the next 12 years...so $500/year. But technology will improve and the cost will decline somewhat.

 

They can make any car get 35 miles per gallon today you just won`t like the way it performs when you push down the gas pedal.Ever get behind the VW rabbits in the 80`s they took a mile to get to 60 but they got 60 miles to the gallon hiway.

 

Aluminum and magnesium DO cost more than steel, and the manufacturers WILL have to make significant investments in new manufacturing technologies to make it all work to today's standards of reliability and performance.

Essentially, they're going to have to make these new, lighter weight cars stand up to collisions with older, heavier vehicles, provide performance that's on par with today's vehicles, continue to improve reliability to the point where people value these vehicles as appliances, and continue to improve PROFITABILITY so that the shareholders allow them to keep their jobs...

 

This is a great idea... I don't see why an HHR gets 20 MPG. There is no excuse!

 

I hear people say that all the time, but i get 27-28 mpg during city driving and over 30 on the highway. You might want to change gas stations and change your driving style.

 

I read an article on CNN's web site a month or so ago, that stated a guy in upstate New York figured out a way to make an engine run on salt water. Although it was a very tiny engine, there could be unlimited possibilities for this research. Now theres a product that would take a million or so years to run out of. Of course I never saw anything else about it so he was probably knocked by an OPEC agent.