New US MPG rules favour Detroit Three

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IOL mot pic aug13 Ford F-150

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Under proposed new US fuel-efficiency rules, bakkies suc has the best-selling Ford F-150 would be under little or no pressure for at least the first three years.

The Obama administration's proposed fuel-consumption standards for 2025 are unfairly tilted in favor of the three US automakers and put their foreign-based rivals at a disadvantage, according to a House Republicans report released on Friday.

According to the report written by the House Oversight and Government Reform Committee staff, the standards are also based on an “overly optimistic” outlook of American consumers' willingness to buy hybrid and electric cars. The committee is chaired by California Republican Darrell Issa.

The report comes days before the White House is expected to release the fuel-consumption standards in their final form. The proposed standards call for companies to roughly double their average fuel-efficiency to 4.3 litres per 100km by 2025.

The figure was announced in 2011after more than a year of talks between the Obama administration and automakers. The House Republicans' report quotes emails and handwritten notes from executives and government officials that shed light on those negotiations over a new target for automakers' corporate average fuel economy, or CAFE.

POINT OF CONTENTION

White House spokesman Clark Stevens defended the new CAFE standards, saying they “will save families thousands of dollars at the pump and dramatically reduce oil consumption.” Stevens said more than a dozen major automakers supported the new rules.

According to Friday's report, one key point of contention was the separate standards made for cars and bakkies, which some executives said favoured General Motors, Ford and Chrysler.

According to the proposed standards, automakers must show an average annual increases in fuel economy of five percent for cars and 3.5 percent for light trucks until 2021, with a five percent increase for all vehicles after that.

In an email, Tom Lehner, a lobbyist for Toyota, described the separate fuel economy standards for bakkies as a “second auto bailout.”

Toyota spokesman Steven Curtis said the Japanese automaker “has long supported a single national fuel economy programme” and has worked with the administration on the standards for model years 2017-2025.

Curtis said: “Our objective was to help achieve a true, single national standard with some certainty, clarity and flexibility.

“PROPOSAL LACKS COMPETITIVE EQUITY.”

The three Detroit automakers build the vast majority of bakkies sold in the United States. These vehicles also boast higher profit margins than passenger cars.

David Geanacopoulos, general counsel for Volkswagen US, said the overall proposal “lacks competitive equity.” He added that the bakkie proposal was unfair because the largest trucks made by the US automakers were under “almost no burden in the first three years.”

Volkswagen, one of the few automakers which did not back the proposed rules, was not immediately available for comment.

Automakers are now redesigning their cars and trucks by using lightweight, but costly materials such as aluminium to meet the standards. They are also expected to build more electric vehicles and hybrids, which need pricier batteries. - Reuters

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