Global Economics

Do Consumers Want Fuel-Efficient Cars?


What they buy doesn't always back up what they say. And for the customer, sometimes power still trumps environmental responsibility

In Germany, sales of SUVs have risen by more than 45 percent in the past three years. People proselytize for hybrids and fuel efficiency, but they buy fat, gas-guzzling autos. Why do drivers, businessmen and politicians have such a hard time saving gas to protect the environment?

Children can sometimes be painfully honest. When they play top trumps, there's only one question that matters: Which car is the most powerful -- which is fastest? "Mine has 255 horsepower." -- "Mine has 278." -- "From zero to 100 kilometers an hour in 7.1 seconds."

Later, when the children have become grown-up consumers, their love of truth is no longer quite as strong when it comes to cars. When questioned in surveys, most say they would like cars to consume as little gas as possible. But what cars do people actually buy? What cars do engineers design? And what decisions do politicians make when it comes to this issue?

In Germany, customers are especially fond of sport utility vehicles. The number of such cars registered rose by more than 45 percent between 2003 and 2006. The market for them is booming -- as if asphalt roads had transformed into swamps and deserts during recent years.

Even when they don't buy SUVs, they typically buy cars with powerful engines. Since 2000, the numbers of cars registered with between 136 and 190 horsepower has almost doubled.

GAS-GUZZLING EXTRAS

Consumers are also ordering more cars with four-wheel drive, automatic transmissions, air conditioning, glass roofs and countless little extra engines that open and close windows, adjust seat positions or move rear view mirrors. It all increases the car's weight, its gas consumption and the costs -- but so what?

There's just one thing the common driver doesn't like: Cars with low gas consumption. Volkswagen's three-liter Lupo -- so called because it used as little as three liters per 100 kilometers (close to 80 miles per gallon) -- was no car for the common man. It was intended for do-gooders, the environmentally conscious, but it turns out there are less of them than the Wolfburg-based auto company thought. Demand for the energy-saving car was too low and the company stopped producing the model in 2005. Good mileage, it turned out, isn't a priority for German car buyers.

Buyers, it seems, are providing producers with the perfect alibi. What are we supposed to do, the CEOs of Mercedes, BMW, Porsche and Volkswagen ask? How are they supposed to reach the low target values for CO2 emissions if customers just keep buying big heavy cars?

"ECO-SCHIZOPHRENIA"

DaimlerChrysler CEO Dieter Zetsche has diagnosed many people with a new disorder: "eco-schizophrenia." It's a dangerous disorder -- and apparently highly contagious.

The disease afflicts journalists who demand energy-saving cars in their articles but then order the turbo versions for themselves when they test drive the cars. But the symptoms are widespread on the top floors of automobile industry headquarters too.

CEOs are ordering the development of especially energy-efficient engines, but they are using the new technology mainly to improve engine capacity. In 2005, for example, BMW had the most powerful three-cylinder diesel engine (300 horsepower), until the company was trumped by Mercedes (314 horsepower). Then Mercedes was overtaken by Audi (329 horsepower). Now BMW is leading the race again -- with 329 horsepower. The competition prompted the weekly Frankfurter Allgemeine Sonntagszeitung newspaper to ask: "Where will it end?"

The answer: With a 1,001 horsepower fairy tale. That's the engine capacity of the Bugatti Veyron, whose development cost Volkswagen several hundred million euros. The super sports car has its own way of solving the problem of obtaining enough gas: It's equipped with the fastest fuel injection pump in the world.

Now, the CEOs of car companies aren't all grown-up boys who want to play top trumps. But they have to live with contradictions politicians or investors hardly worry about.

First example: In Europe, cars now need to be built in such a way that pedestrians are less at risk during an accident. It's a sensible prescription, but it leads to higher engine hoods. Those in turn lead to greater air resistance, which amounts to higher energy consumption.

Second example: Some CEOs have realized that the race to develop ever bigger, ever heavier vehicles can't continue this way. But their stockholders demand fast profits. They're not interested in profits that will only materialize in five years time. And the SUV business is currently the one yielding the greatest profits, at least in Europe.

Politicians could eliminate many of these contradictions. They could influence the development of new cars by means of prescriptions and prohibitions, taxes and subsidies. But for now, they're heading in the wrong direction.

SUBSIDIZING GAS HOGS

In Germany, a tax write-off for car-owning commuters rewards heavy drivers. The annual car registration fee is based on cylinder capacity rather than CO2 emissions. And the state indirectly subsidizes purchases of high-horsepower vehicles by making company cars tax-exempt.

Germany's environment minister, Sigmar Gabriel, complains about these things -- but he hasn't done anything to change them. And though the environment minister likes to be seen riding trains when doing government business, the reality is that his driver takes his car to Gabriel's destination. The minister then gets in to travel the last few kilometers, protected by bulletproof windows -- for security reasons, he says. You could say the environment minister is as human as the rest of us -- his relationship to cars is just as contradictory.

And yet even drivers can learn to adapt. Sometimes they even change their attitude faster than the industry would like. That's just what's happening in the United States, of all countries -- the land of gas-guzzling monster vehicles.

Ever since gas prices started climbing there, sales of heavy SUVs and pickup trucks have declined dramatically. Ford and General Motors have failed to offer feul-efficient cars quickly enough and are now suffering huge billion-dollar losses and have to slash tens of thousands of jobs.

Toyota, on the other hand, is benefiting from the Americans' new-found concern for the environment. The company's managers think in the long term and that's why they're the most successful carmakers in the world. They didn't make them much money to begin with. But Toyota is benefiting in terms of its public image. The hybrid models are now in demand and are considered fashionable -- even if you'll look for them in vain in a deck of top trump cards.


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