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Taxpayer Gift Goes to GM for Fuel Economy Work

U.S. Department of Energy grants General Motors $7.7 million to improve fuel efficiency and reduce exhaust emissions.

by on Jan.20, 2010

Should taxpayers support commercial research?

The U.S. Department of Energy is awarding General Motors Company a $7.7 million grant to help the development of four technologies to improve the fuel economy of light-duty vehicles.

Economy gains of up to 25% are possible, according to GM, which has long-standing research programs in the areas involved — lean combustion, stop-start, and active thermal management, which are all common areas of automotive research and development at other makers.

The fourth area, what’s known, as “passive selective catalytic reduction (SCR), is an exhaust gas after-treatment system to handle the creation of nitrous oxides, which is a natural consequence of operating an engine’s air-fuel ratio on the backside of the theoretically ideal curve for maximum power.

At stake is the potential commercial implementation of lean combustion, which can provide huge efficiency gains needed to meet the Congressionally mandated 35.5 corporate average fuel economy standard by 2016.

Consumers, thus far, appear largely unaware that because of the regulation cars could increase in cost by several thousand dollars or more, and that a drastic downsizing will be forced on them, given the current state of automotive development. A consumer revolt is by no means out of the question if this happens.

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Technology in Context!

Compounding the looming cost issue is the struggling U.S. economy, the diminishing car-buying middle class and the ongoing gutting of our wealth-creating manufacturing industries.

Democrats were humiliated by angry voters yesterday in a special election in Massachusetts for the late Ted Kennedy’s Senate seat by an unknown Republican in the most Democratic of states. The job shedding economy, with unemployment at levels not seen since the Great Depression because of the longest and deepest recession in post-war history appears at the center of the rout.

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First Look: Mini Countryman

Fourth model joins the line. Can it end the sales slump?

by on Jan.20, 2010

Here's the debate: Can repackaging the basic car strengthen the brand and increase sales?

BMW’s slumping Mini brand is adding what it calls a crossover to its lineup, as the fourth model.

The Mini Countryman is needed in the U.S. and globally to reverse a sales decline of the minicars after their marketing momentum, which allowed premium pricing for what are after all econoboxes, ran out of fuel as the Great Recession took hold during the past 18 months.

Countryman – and it won’t be called that in all markets – follows the original Mini two-door, the Clubman and the Convertible. As the first four-door in  the line, it will debut at the Geneva Auto show in March. Countryman will be sold in the U.S. beginning early 2011, while sales in Europe and some other markets outside North America will begin in the fall of 2010.

Last year, worldwide Mini sales came in at 216,538, a roughly 7% drop in a depressed industry. In the U.S., volumes were off 16%, falling to 45,225, but that was still better than the industry overall drop of 24%, officials point out.

Country is still extremely small for the U.S. mass market – 4,097 millimeters or 161.3 inches in length. At first glance, it appears to be just a renaming and repackaging of existing models, although executives say it is a new platform. The wheelbase has been stretched a bit to  2,595 millimeters or 102.2 inches. And the body height has been raised to increase visibility on roads where much larger crossovers abound. All-wheel-drive is optional.

It will be interesting to see if buyers respond to what could be characterized as just the same old crossover formula applied to the smallest vehicle by far of the class — if you can call this a crossover at all. Put the other way, is this an innovative approach to extending the Mini brand, which follows the successful Mini formula?

A split/folding three-seat bench is available as a no-cost option.

Countryman comes with four seats. A three-seat rear bench is available as a no-cost option. The rear seats move fore-and-aft,  either individually or in a 60:40 split for the three-seat bench. The backrests may be tilted for angle either individually or in a 40:20:40 (three-seat bench) arrangement, increasing capacity in the luggage compartment from 350 to 1,170 liters or 12-41 cu. ft.

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CO2 Blues as Makers Grapple with EU Regulations

In a declining and weakening market, stringent requirements dictate more downsizing and more cost increases.

by on Jan.19, 2010

CO2 reduction is no walk in the park for automakers or their unsuspecting consumers.

Increasingly severe CO2 standards in Europe requiring average fleet emissions of 130g/km by 2015 are forcing automaker to undertake a drastic downsizing of vehicles in a market already dominated by relatively small cars.

The regulations backed by tax incentives and special treatment of makers and classes of vehicles have global implications as Asia and the United States debate and institute their own future auto regulations.

The U.S. now is looking at CO2 limits of roughly twice that of the European Union, but all bets are off after 2015 as to what the next regulatory steps are.

What happens in a volatile political and regulatory environment will determine the types of vehicles you can buy – potentially eliminating the vehicle you are driving now– how small remaining vehicles will be, and how much more – and it will be more — you will pay for them.

At risk are the recovery and future profitability of heretofore wealth-creating automakers who in the depressed world economy will have a difficult time passing on the large costs incurred to make already small efficient cars cleaner still.

About 8-10 million cars are expected to be in the less than 130g/km CO2 emission band in Europe by 2015, according to automotive consultancy Frost & Sullivan. That’s about two-thirds of the market, which by definition will come to define the market.

This is resulting in a complex three-dimensional game of chess just underway behind the scenes, as mass marketers will by necessity try to squeak by with minimal investments.

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CO2?

Luxury makers, with their affluent and relatively well-educated customers, have the opposite problem – how much to spend on advanced technologies that the buyer can’t access or even see in terms of traditional luxury features so that they can continue to offer larger sizes, more engine power and more gadgets that define luxury without offending the greenish sensibilities of potential customers. Here, too, makers ultimately face a pricing problem. Too much in price might be too much even for the relatively affluent, or too little in social responsibility will not be enough.

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