New fuel standards advancing lighter cars, hybrids

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A brave new world of smaller and likely more expensive vehicles -- electric cars, hybrids, and diesel-powered cars -- is right around the corner for U.S. consumers.That's because auto manufacturers must make dramatic changes in their product lineups to meet federal standards for fuel economy that will go into effect on an interim basis in 2011, and as a final step in 2020.The Corporate Average Fuel Economy (CAFE) standards dictate the number of miles per gallon that an automaker should get for the entire range of vehicles it sells.Currently, overall gas mileage for each company's fleet must average 27.5 miles per gallon (combined city and highway mileage). Trucks must get an average of 22.5 miles per gallon.Last month, interim rules were approved that require that each company's fleet average 31.6 miles per gallon after the 2011 model year has ended. By 2020, car and truck makers must meet CAFE requirements of an average of 35 miles per gallon."There are two basic ways that manufacturers can respond to the tightening CAFE standards," said Tom Libby, senior director of industry analysis at the J.D. Power Information Network. "All manufacturers will either take weight out of vehicles, or use new technologies with their existing powertrains. They have to make vehicles that are much lighter and more fuel efficient."But more fuel-efficient vehicles aren't expected to come cheap."That's what the manufacturers are complaining about," said Michael Omotoso, senior manager of global powertrains at J.D. Power. "Even though they can achieve the standards, they say it may cost $4,000 to $6,000 more per vehicle. So manufacturers can either pass the entire cost onto the consumer, or they will have to eat some of the costs, and thus lower their profits or lose money on every vehicle they sell."The need to increase fuel efficiency is expected to drive further technological innovations."We're going to see a dramatic change in the nature of the automobile, and we will have to plug our cars in much more often," said Peter Morici, a professor at the University of Maryland's Robert H. Smith School of Business and a follower of the auto industry. "The idea of Chevy's Volt is great -- you can plug it in for a 40 or 50 mile commute and not use much gasoline."The changes will "offer great opportunities for entrepreneurs," he added. "There's nothing written in stone that Ford, GM and Chrysler have to be the manufacturers of electric cars."But for now, increasing gas mileage is on the front burner.In response to the tightening federal rules, some companies are rumored to be outright dumping some models, mostly large SUVs and high-performance cars.General Motors has stopped work on a replacement V-8 for its famed NorthStar V-8 engine that powers many of its larger cars. Nissan has announced plans to sell a reasonably priced electric car in California in 2010, and everywhere else in 2012. GM has promised its Chevrolet Volt, a long-awaited "plug-in" electric car, will be available by 2010. And according to Automotive News, Ford will introduce a smaller, lighter version of its popular F-150 pickup truck by 2011.Consumers will be harder pressed in the future to find full-sized pickup trucks, large SUVs, and V-8 powered automobiles. Minivans will be more like the modestly sized Mazda5.And while the high-performance car such as the Dodge Challenger, Ford Mustang and the upcoming Chevy Camaro all may have V-8 engines now, turbocharged four-cylinder engines or V-6 engines most likely will become more common on those sorts of cars.Luxury car makers will be especially hard hit because their fleets, by and large, do not contain many small economy models."Mercedes Benz, for instance, will have to adjust their powertrains and model mix. ... It will be difficult for them, although their difficulties could be offset somewhat by the Smart Car," Libby said. BMW, which is in a similar situation, also will benefit from having a small car in the portfolio, in this case, the Mini Cooper.(E-mail Don Hammonds at dhammonds@post-gazette.com)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)