New fuel standards spur change
Looking at the dozens of new models introduced at the New York International Auto Show, it's clear that the industry is undergoing dramatic change, most of it driven by tough new fuel economy standards. The EPA's Corporate Average Fuel Economy mandate — also known as CAFE — requires that an automaker's fleet average 29 mpg. That will rise to 36.6 mpg in model year 2017, a mere three model years from now, on its way to a lofty 54.5 mpg by 2025. That may sound far away, but it's not as distant as it sounds.
That poses a problem for luxury automakers, whose vehicles tend to be thirsty. It's easy to sell a buyer of a low-priced or moderately priced car on one with a smaller engine; it's much harder to convince luxury buyers of the same thing.
Larger models are becoming more efficient through the use of diesel or turbocharged engines, eight- and nine-speed transmissions, and costly lightweight materials, such as aluminum and carbon fiber. But it's not enough to get the job done.
Consider the midsize Mercedes-Benz E350 sedan. It returns 23 mpg in combined city/highway driving, according to the EPA. At 26 mpg, the E400 Hybrid is more fuel-efficient, but not nearly enough to meet the new rules. So it's easy to understand why Mercedes-Benz is introducing the CLA in September. It's a compact sedan with a thrifty four-cylinder engine that starts at less than $30,000. Given this is about the same price as a mundane midsize sedan, the car should be a game-changer for the brand and the marketplace.
The German auto manufacturer has revealed a subcompact five-door hatchback that runs solely on electricity, the B-Class. Its price will be close to that of the Chevrolet Volt.
Mercedes-Benz is not alone.
BMW's most popular vehicles, the compact 3 Series and subcompact 1 Series, suffer from fuel economy that belies their size. BMW has downsized engines and will offer a diesel variant of the 3 Series later this year. It will be joined by the i3, an electric car that will offset the thirsty ways of other BMW models.
Cadillac is taking a similar path. Earlier this year, at the Detroit auto show, General Motors' luxury marque introduced the Cadillac ELR, a plug-in hybrid electric car that shares its running gear with the Chevrolet Volt, rated by the EPA at 62 mpg.
They're following the example set by Lexus. Its flagship sedan, the LS 460 L, returns an OPEC-friendly 19 mpg, while the LS 600h L hybrid returns 20 mpg. Both cars cost close to, or more than, six figures. The entry-level Lexus, base price $32,050, is a subcompact hatchback that's rated by the EPA at 42 mpg.
Despite the flood of alternative-fuel vehicles, they accounted for just 3.3 percent of the U.S. market in 2012, according to auto industry publication Ward's Auto. By contrast, the Ford F-150 pickup truck accounted for 4.5 percent.
So, why are automakers releasing electric cars and hybrids given their meager sales? It's simple: Under the new EPA rules, every electric car sale is counted as two sales when it comes to CAFE compliance.
But you have to wonder what this means for luxury brands. The prestige of any luxury label is based on its scarcity and its pricing. If you can buy a Mercedes-Benz or BMW for little more than a loaded Honda Accord, is it a luxury car or is it a pretender?
That's for the marketplace to decide.
Larry Printz is automotive editor at The Virginian-Pilot in Norfolk; email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Stocks shake off Fed’s talk of stepping up interest rate hike
- Kennametal’s CEO to retire at yearend
- Sales, profit fall at retailer American Eagle Outfitters
- Cash stash bolsters U.S. Steel
- Sprint cancels Framily, rolls out new data pricing plan
- Gas production from Marcellus shale sets record despite fewer new wells going online
- HTC to construct Windows version of flagship phone
- Dick’s beats expectations, but golf sinks profits
- PUC appeals ruling that curbed its power to review municipalities’ drilling rules
- Housing starts jump 15.7% to 8-month high, suggesting recovery back on track
- Auto sales increase along with subprime loans