The European Union (EU) is bound and determined to cut automotive CO2 emissions; Brussels' bureaucrats are looking to lower the required C02 levels from today’s corporate average of 160 g/km to 130 g/km by 2012. Curious about the cost of the new regs on the auto industry and, hence, consumers, Germany's federal environment ministry commissioned the Transport Research Institute to do the math. The Berlin-based boffins reckon EU car manufacturers will have to invest at least €11.7bn a year in new technologies to meet the new obligations. The "per unit" cost to the consumer: €500 to €1,500. But don't get to thinking that the Institute is lobbying against the stricter regs (perish the thought). Auto Industry reports that the report counters carbon positivists by pointing out that the fuel saving from C02-compliant cars should mitigate the extra cost "over the medium term." The Institute also suggests that funds from fines against corporate CO2 scofflaws should go to national carbon mitigation programmes. But that would be wrong! So they recommend that the regulation should be so constructed as to encourage manufacturers to invest in meeting CO2 norms rather than paying fines, just as BMW, Mercedes, Porsche and VW do on this side of the pond.
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In one fell swoop, anyone can now see why Porsche is buying Volkswagen.
This way, they can retain the production lines for the gas-hog Porsches and offset the low production performance cars with Volkswagens being mass produced.
Now, had the picture been as originally envisioned by the EEC (maximum of 130 g/km for ANY cars) then Porsche would have needed to spend all of its money on development of ultra-light hybrid 911’s to replace the current cars… with probably no more than 1.5 litres of engine (would this have been a 912 HL – hybrid licht – light?)
With all due respect, Mr Glenn126, I thought it was blatantly obvious why Porsche were buying VW. Anyone who COULDN’T see that deserves to drive a VW! ;O)
But I have no sympathy for European car makers. they made this bed and should lie in it. Especially the Germans, in fact the next few years the German Auto scene will change for the following reasons.
1. BMW are a rogue company not affiliated with any large scale manufacturers. This means that their CO2 average will be very high even with Mini, factored in.
2. Mercedes-Benz will be in DEEP trouble as they make most of their money on large, luxury sedans. Smart cars just won’t be enough to save their CO2 average.
This won’t result in a merger between the two because:
a. it’d be market share suicide
b. the merger would never get off the ground because one company would have to take the reins and I can’t see either budging.
Which means it’ll be Jaguar II: the sequel! Trouble is, Jaguar makes good cars (Long live the X-Type!)
The Japanese thought ahead with hybrid technology and even Ford and GM have a decent selection of small cars to choose from in Europe.
You know you’ve messed up when GM and Ford were a step ahead of you!
I’m pretty sure the main reason Porsche are taking control of VW is Piech’s ego, that there might be a business logic to the deal – if you squint really hard and consider proposed regulations – is just coincidence.
I don’t get “KatiePuckrik”‘s schadenfreude? Maybe he’s pissed off that the UK doesn’t have a car industy anymore?
BMW, Porsche and MB build luxury cars because that’s where the margins are, they continuously invest in new technologies including bluetec and alternative fuels.
Right now a disproportionate share of their most profitable models are sold outside the EU, that will continue.
The other European manufacturers, VW, Renault, PSA and FIAT, are as well placed as anyone to meet the carbon targets and certainly as well placed as Ford or GM.
Screw Jag btw they haven’t made a car worth buying since the MkII.
Hal,
With all due respect, I’m a girl, so let’s drop the “he” references, ok?
And also, is it possible that I can express an opinion on TTAC without someone resorting to the “UK doesn’t have a car industry” strawman argument (even though, the UK have Aston Martin back, Noble, Caterham)?
So, by Hal’s logic, the Dutch can’t talk about cars, neither can the Belgians, the Portuguese, South Africans, Mongolians, New Zealanders, Egyptians, Brazlians, Argentinians, Peruvians, well, you get the point!
It doesn’t matter whether the profits are at the high end or not, we’re not talking about profitability, we’re talking about CO2 emissions. And if you think Bluetec will save Mercedes-Benz alone, then I think you’re seriously deluded.
Unless Mercedes-Benz and BMW bring more fuel efficient small cars to their fleets, then they’re in trouble……big trouble.
The EU is chock full of “elected by nobody” bureaucrats trying to justify their existence, grab a few headlines, and increase their ability to hook up with gushing media types and Virgin Atlantic airline stewardesses at Friday afternoon cocktail parties.
If anyone thinks this gang of dangerous socialists will destroy German automobile manufacturing…….then, I’ve got some Nitrogen to sell you.
Katie, Anyone can comment, it was your “they made this bed and should lie in it. Especially the Germans” tone I was questioning. I said nothing that applies to Peruvians.
Your analysis is off. Profitability is relevant. The high end high margin models are also the most polluting as you implied.
You ignore that a lot of those sales are ex EU and unaffected by EU regulation. Or do you think Americans will stop buying AMGs because of European regulation?.
Developing new models and fuel efficient technologies is precisely what MB and BMW have been doing for years, I don’t “think Bluetec will save MB” neither company has put all its eggs in one basket. In any case both of them (and the rest of the Euro carmakers) are profitable and can afford to invest. Unlike Ford and GM, shocker.
In fact European car companies as a whole are doing well which is one reason they are being targeted by regulators. If they were in the same difficulty as the US car industry they would be politically untouchable.
Hal, if profitability is relevant then I’m sure MB and BMW will take that on board when the EU are forcing them to make more fuel efficient cars(!)
As for not putting all your eggs in one basket, I disagree (again). German manufacturers are pushing diesels again, again and again. They haven’t entertained hybrids at all. Whereas the Japanese have petrol, diesel and hybrids in their fleets. Even Ford and GM are pushing hybrids to market. Even Citroen are bring a hybrid diesel to market. Only the Germans are dragging their heels.
Americans won’t stop buying AMG’s, but then MB USA will have the CAFE regulations to deal with…….
hey johnny c you got it right–wait till it cost way to much to make or manufacture anything in Europe because of regulations and it all goes to china. then you will have a huge recession on your hands there. co2 is not even proven to be why the earth is warming and there ready to destroy an economy over it–its happening here in the usa and they blame it on the housing market –ya right,- its energy cost.
Katie, 2 minutes of research and your whole argument falls apart. Maybe hybrids are the be all and end all but in addition to hybrids BMW and MB have several clean diesel technologies (not just Bluetec), CNG, Hydrogen…
BMW and Daimler to Cooperate on Development of a Hybrid Drive System for Premium Segment Cars, March 2007. http://tinyurl.com/2y4ctp
Global Alliance for Hybrid Drive Development: Cooperation between BMW, DaimlerChrysler and General Motors, 2005.
http://tinyurl.com/ypbe9d
DiesOtto – Gasoline engine with diesel genes
http://tinyurl.com/2yazxa
Katie do you really want everyone to have a small hybrid?would you really want to spend your life driving around in a sub 1 litre hybrid egg box?
Katie do you weave yogurt?
Hal, you’re missing the point. The point is that even with these “clean” diesel powertrains, on large sedans (Which is where they make their money, as you say) the effect will be negligible. Meaning that, nothing has been solved!
Their lack of smaller cars (and fuel efficiency) is what is going to cause them trouble. That’s why Porsche have bought into VW (a much larger car maker) which means, they can offset their sports cars against the Polos and Foxes. BMW and MB don’t have such a line up.
DrBrian,
I DO drive a 1 litre “egg box” and find it is perfect for European roads. The roads in Europe are smaller and twisting. Have you ever driven in London or Amsterdam? Trust me, navigating a large sedan down those roads is about as easy as trying to get that “In Defense of American Automakers” posters to see eye to eye driving a tank down an alleyway.
?? MB and BMW ARE developing more fuel efficent small cars.
I pointed out that they are investing heavily in a range “clean” tech. despite what you claimed. Do I need to link to the Mini, 1series, 3series, A B & C class?
I would love to get the figures and see the sales mix for MB and BMW in Europe but from what I have seen small cars are already a high proportion of sales.
You are also assuming that there is only one way to meet proposed CO2 regs and that those regulations will come into force when and as proposed. Lastly it will be a cold day in hell before any German government agrees to regulations that BMW and MB can’t accept.
http://www.acea.be/files/CO2_Leaflet_ENG.pdf
Not really a fair comparison there Katie.Trying to drive a car around london/Amsterdam is like trying to drive inside a volcano or on the moon. London and Amsterdam have been designed to be anti car and its hard to drive anything around there. On the other hand I manage quite well threading a large-ish toyota around the green green valleys of Wales.