Fuel Economy Comparison

A Senate bill to raise fuel economy mandates by 40 percent would force Detroit's Big Three automakers to significantly reduce sales of more profitable SUVs and pickup trucks, according to a Wall Street analyst.

Under the Senate bill, regulating the fuel economy increase to 35 miles per gallon for cars and trucks by 2020. Manufacturers have said that this mandate would require them to add an expensive technology to reduce the size of some vehicles and stop selling larger vehicles.

Automakers said the bill the Senate passed 65-27 last Thursday, which would be the first increase in fuel consumption of cars in 25 years, would cost tens of billions of dollars. DaimlerChrysler AG's Chrysler Group said it could bankrupt the company.

"We believe that the Big Three could meet the standard 35 miles per gallon just by significantly reducing the sales of large SUVs and pickup trucks by 60 percent while improving fuel economy car for about 34 percent and fuel economy of trucks by 25 percent, "Brian Johnson, auto analyst at Lehman Brothers in New York, wrote in a recent report.

Environmentalists and supporters of the Senate bill have argued that there would be no need for automakers to reduce vehicle size to meet the requirements. What is not disputed that the sales of SUVs and pickups have been the bread and butter of General Motors Corp., Ford Motor Co. and Chrysler for years. In 2007, 34 percent of GM's sales were large SUVs and full-size pickup. At Ford, it was 31 per cent, and Chrysler, it was 20 percent. By comparison, large SUV sales and size accounted for only 10.5 percent of sales at Nissan Motor Co. so far this year and eight percent in sales of Toyota Motor Corp..

One major area of concern for GM and Ford is their dependence on large, powerful engines, but less effective, "said Johnson. While about 60 percent of Honda Motor Co. and Toyota's 2006 production was the four-cylinder engines, only 14 percent of the production of Chrysler and Ford engines were four cylinder and only 21 percent GM.

The Alliance of Automobile Manufacturers, a trade group that represents the Detroit Three and Toyota among others, said the report shows that there is a real impact to a dramatic increase. "Fuel economy standards should be increased, but at reasonable levels for workers will not lose their jobs or pensions or other benefits," spokeswoman Gloria Bergquist said. "As this report, the economic threat is real and it is serious. "

In May, Standard and Poor's issued a report saying that the fuel economy and vehicle emissions legislation would be difficult "poses a real risk to global automakers financial performance, particularly as some are already under pressure from the very margins thin. " With the bill passed the Senate, the legislation is now moving to the House, which should not raise the Corporate Average Fuel Economy address the mandates until autumn.

Tough mandate fuel economy would require the development of equipment for engines, brakes, radiator, EBC pads , and other auto parts. Ad it means additional costs for domestic manufacturers recover.

On Wednesday the House Energy and Commerce Committee is expected to approve a package of six bills aimed at improving energy efficiency. U.S. Rep. John Dingell, D-Dearborn, the chairman of the commission and an ally of the auto industry on Friday urged the CEOs of GM, Ford and Chrysler, as president of United Auto Workers, to discuss the bill fuel economy. He urged companies to be more aggressive in focusing on what they can agr.