Last month, Jonny Lieberman asked if anyone had been hit with a fuel surcharge. And no wonder. News10 says high fuel prices "are being felt particularly hard by small business owners." San Diego's delivery business has been particularly hard hit. With gas at an average of $3.73/gal., "some small delivery businesses [are] wondering what to do." (Deliver packages?) CMF Incorporated's fuel bill has gone up by $4k in the past year– that's not including the cost of diesel fuel for their larger delivery trucks. Even Jonny's dreaded fuel surcharge doesn't guarantee the main man a profit. What's a small business to do? Raise rates too high, and they risk losing customers. Keep them static and they lose money. It's a bummer– for all concerned. "I'm walking into companies where the phone is not ringing and everyone's in this type of slump or depression emotionally," owner/driver Ed Bidwell reports with a distinctly California-esque metaphorical shrug. "And that's what gets to me."

Remember Ford's promise to improve SUV fuel economy by 25 percent by 2005? Or the one about building a quarter-million hybrids by 2010? Well, the Detroit Free Press reports that The Blue Oval Boyz are at it again. FoMoCo's pledged to reduce greenhouse gas emissions from its U.S. and European vehicles (no mention of Chinese or Australian models) by 30 percent by 2020. So what makes them think they can keep this promise? Better modeling, says Ford's VP for sustainability, environment and safety engineering. "We started this 'modeling' three years ago" Sue Cishcke reveals. "And that's given us confidence to be able to say what our thinking and blueprint and plan is, and how it's aligning with the regulations." Of course, meeting the new Corporate Average Fuel Economy (CAFE) standards will increase fuel efficiency by 40 percent– and reduce greenhouse emissions drastically. And when do these new regs go into effect? Why it's 2020! What a coincidence.

Dow Jones Market Watch reports that tight credit, expensive gas and the economy in recession, four cylinder engines are becoming increasingly popular. Four-pot models now make up 37 percent of the U.S. market, up from 30 percent three years ago (when gas was last under $2/gal) Eight cylinder models fell from 28 percent to 18 percent over the same period. Tracing the development to purely economic factors, the report shows that hybrids do not yet offer enough savings to overcome their price premiums; hybrids only make up three percent of the market. "For now, the easiest, cheapest way for new-car shoppers to get better mileage is to choose a model with a conventional four-cylinder engine," says J.D. Power analyst Jason Rothkop. "And they are." The poster child for the four-banger revolution? The Toyotas Yaris. Sales of the four-pot economy car were up 83 percent in March. [For more info on last month's sales, check out Frank Williams' March By The Numbers.]

The European Union's goal of reducing C02 emissions to 120g/km is not attainable by the 2012 target date, says Daimler CEO Dieter Zetsche. Speaking to Wirtschaftswoche, and reported by Auto Motor und Sport , Dr Z says "sixty percent of the vehicles which we will sell in 2012 are already in the factories and are going to customers on the market." With C02 averages currently at 170g/km, Zetsche says it will take another seven years to prepare a new generation of vehicles, leaving EU goals out of reach within the current timeframe. Zetsche also reveals that Daimler will be sticking to its guns on alternative energy development, vowing to push for greater acceptance of hydrogen fuel cells where the automaker has sunk considerable R&D efforts. Zetsche acknowledges that "The last open question is: will there be a universally available hydrogen infrastructure, where will the hydrogen come from, and what will be the energy savings?" Big questions indeed for a company facing tough carbon goals in a short timeframe.

Audi may be right on target with their plans to import diesels . A study by J.D Power (via the Detroit News ) shows diesels and gas-electric hybrids will have 17 percent of the U.S. market by 2015. Surprisingly, Power thinks diesels will outsell hybrids because of the higher cost of admission to the hybrid club; they predict by 2015 hybrids will increase to seven percent of the market (from the current 2.2 percent) while diesel vehicles will make up ten percent. Sales of four-cylinder gas engines are also expected to rise sharply as the automakers scramble to meet the new 35mpg CAFE standard. They don't think hydrogen fuel cells and pure electric cars will have much impact as they won't be available in any significant numbers during the years covered by the study. But what about E85? The proportion of vehicles available that can run on corn squeezin's will nearly double but few of them will be using it because it still won't be available in most places. That won't matter to the manufacturers, though, if the new CAFE standards have the ethanol loophole the current one does.

By now you might have heard from Autoblog or Edmunds' Inside Line the shocking, incredible news that Mercedes is developing a blown 4-banger in the C-Class for sale here in the U.S. I say good. Apparently some "other" blogs have forgotten that Mercedes has, until this latest generation, always offered a 4-cylinder engine in the C-Class in the U.S. The last generation had a supercharged 1.8 and a supercharged 2.3 at different times. Before that there was the C230 Kompressor in the first-generation C, as well as the C220 and C230. And of course the original baby Benz, the 190E was named for its little 4 pot, as well as the 190E 2.3. So now that we've got the history out of the way, is this a smart business idea? Hell yes. Buyers of entry luxury cars tend to be wary of running costs — that include fuel consumption — and then there's the importance of appeasing the CAFE gods. Not to mention,there's something nice about a luxury car focused on ride, rather than keeping up with the Joneses (and the Hondas). If/when it debuts, expect the blown 1.4 liter to make 150-170 horses and to come with Benz's 7-speed auto.

As much as I like the idea of a hydrogen fuel-cell/nuke-plant-powered future, there's a lot of miles left in ye olde internal combustion mill. For instance, if you replaced mechanically-motivated valves with electronically operated ones, you'd increase both power and mileage. And if you could somehow get the power of a two-stroke engine without constantly burning oil and piston rings or needing a carburetor, why you'd be popping wheelies like a Yamaha RZ 350! Ricardo says yes we can. Their "2/4SIGHT" is a single bank from a V6 set-up to run as two-stroke/four-stroke. Allegedly, it seamlessly switches between two- and four-stroke cycles as power demand increases and decreases. In theory, a 2.1-liter V6 [theoretically] would thus produces 265hp and 339 ft.-lbs. of torque at 2,500 rpm, 27 percent fuel savings and lower carbon emissions. Sadly for now, 2/4SIGHT uses a whole raft of high-tech solutions (boost, injection, intake and exhaust valves are all variable for each cylinder); it's not ready for prime time. We'll keep you posted.

The MinnPost reports that the local E85 lobby is joining the Minnesota Auto Dealers Association's opposition to California-style emissions standards. Although ethanol had been [tortuously] justified as an eco-friendly fuel, Minnesota corn growers say the standards would "make it difficult to certify E-85 vehicles." (This despite the fact that California has already certified 300k flex-fuel vehicles.) James Erkel of the Minnesota Center for Environmental Advocacy argues that the corn growers have stopped making sense. "These bills would not curtail ethanol markets and in some respects actually help it." Erkel added that the new regs wouldn't affect Minnesota's attempt to "upgrade" its E10 fuel to 20 percent ethanol. But the Minnesota Auto Dealers Association have convinced their agricultural pals that stricter-than-the-feds tailpipe standards would kill the market for new pickups and SUVs, including flex-fuel versions of same. 

Around here, our favorite items are of the "News That Will Shock No One" variety. Hot on the heels of yesterday's "shocking" revelations that Lutz hates oil burners and the April Fool's strike truckers' shutdown protesting spiraling fuel costs, no one here at TTAC is, well, shocked that Bentley isn't pursuing a diesel option. For the time being. Motor Authority is reporting that even though Bentley's marketing director feels mega-torque, slow-to-rotate mills are perfect for the brand, customers (shock) simply aren't interested. Especially here in the US of A, by far Bentley's largest market. However, as diesel motors are as popular as petrol engines in Europe (if not more so), and even stricter emission and fuel economy standards are just around the corner, Bentley's diesel hand might be forced. Luckily for the ultra-rich, Big Daddy VW has a lethal arsenal of killer no-spark plug motors– including and not limited to a simply mental new 6.0-liter V12 that delivers 500 hp. God can only guess at the torque. And he'd probably drive one, too.

Like Coke, the basic recipe for the Ford Mustang's success has remained relatively unchanged since its introduction: a low sticker price, some pretty sheet metal, a V8 (halo-ing for a V6), a live rear axle and an intangible sense of Americana. That hasn't stopped Ford from experimenting with "New Coke" every now and then– you'll recall the Mustang II and the SVO. Well, get ready for more: Motor Trend reports that Ford's suits are considering losing the V8 entirely and inserting the upcoming 3.5-liter V6-TT EcoBoost engine in the 2010 Mustang. The move is no doubt inspired by the same federal regs which have forced GM to consider slotting a turbo-four into the Camaro (and cancelling its DOHC V8 program). On the plus side, the V6-TT engine is slated to make 340hp and a very muscular 340 ft.lbs of torque. These figures easily blow the current V6 used in the Mustang out of the water. In fact, the TT's a match for the 4.6L-liter V8 currently inhabiting the 'Stang GT's engine bay. But can you have a "real" Mustang without offering a V8? And if the new six this becomes the Mustang's top-line engine, could an EcoBoost turbo-four in the base Mustang be far behind? BTW: all those Coke variants didn't up their total market share. 

With Toyota set to begin selling hybrids in South Korea this year, Hyundai is fighting back by announcing it will begin mass-producing its own hybrids. Donga reports that the announcement of a liquid petroleum gas (LPG/LNG)-electric hybrid and gas-electric hybrid versions of the Avante (Elantra) sedan coincided with Chairman Chung Mong-koo's visit to a Kia factory over the weekend. The automaker has already provided hybrid cars to the Korean government, but this announcement heralds Hyundai's first attempt to go after the commercial market. The LPG-hybrid will be available in 2009, followed by a standard hybrid and larger LPG-hybrid models in 2010. Also planned are fuel-cell models to go on sale in 2012. No word yet on whether these models will be available in the States, but since Hyundai cites the projected million-unit hybrid market of 2010 as rationale for this move, one has to assume that we'll be seeing these gas-sippers at some point.

In The Wall Street Journal [sub], Daimler CEO Dieter Zetsche and GM Car Czar Bob Lutz discuss their respective companies' approach to environmentally-friendly vehicles. Dr Z wants to sell more diesels. (And there you have it.) Maximum Bob eschews oil burners to hang his proverbial hat on E85. Of course, Lutz' preference for corn juice will cost consumers plenty through government spending on ethanol infrastructure and corn price supports. But the winner of TTAC's first annual Bob Lutz Award reckons developments in corn breeding will blunt E85's inflationary impact on food prices. "So I think that people who say, well, the ethanol industry is taking food from the mouths of babies and it's driving tortilla prices up– I think these are highly suspect conclusions." Meanwhile, both executives say Daimler's success selling the smart in the U.S. heralds the end of the efficiency vs safety debate. "There are no statistics that would support [the idea] that you are less safe in the smart than you are in any kind of vehicle," says Dr Z. Lutz appears equally oblivious the laws of physics, stating "If a vehicle is registered for sale in any developed market of the world, it is going to be an extremely safe vehicle."

During our recent audience with GM Car Czar Bob Lutz, Maximum Bob proclaimed "diesels are not the answer." While cynics might say that even a stopped clock is right twice a day, props to Bob for doing the math. Reuters reports the average price for a gallon of diesel has hit $4.06. It's as high as $4.60/gallon in places. As MB pointed out, "asking people to pay a 20 percent premium for a diesel engine and a 20 percent premium at the pump makes no sense at all." True dat. Without huge gains in fuel economy over regular gasoline counterparts, manufacturers are going to have a hard time getting people to switch to diesel-powered propulsion. The next step: the feds intercede to drive down the cost of diesel and diesel cars, as they are doing with ethanol and E85-compatible vehicles. And then high mileage U.S. oil burners will fly off the showroom floor. [Note to Bob: will GM be ready?] Lest we forget, $4.00/gallon diesel has a huge impact on our truck-based shipping infrastructure. And that could be a BIG problem… News of an April first trucker's strike to follow. 

A few years back it was safety. Before that it was reliability. At some distant point in the past it was (maybe) performance. These days, the ever-fickle and typically totally misinformed car buying public is obsessed with mpg– at least according to AAA. And why not? Gas is flirting with $4 a gallon. Milk, egg, your gas bill, beer, Viagra– everything is up, up, up! The MotorAuthority reports that consumers are fighting back by purchasing more fuel-efficient cars. In other words, they're being rational rather than emotional. But how do you define rational? This past weekend a friend asked my girlfriend what the latter thought of her 2001 Ford Focus, a vehicle held together by duct tape and bumper stickers. The friend asking had a 2000 Ford Escort which fell apart in less than 100k miles. She currently owns a 1998 Ford Explorer. She's thinking about getting a new Focus. She's from Michigan, so she can only buy Fords. Or a Prius. Go figure.

Scientist/environmentalist Amory Lovins believes that America can solve oil dependency with efficiency. In the early '90s, Lovins conceptualized the Hypercar: an ultra-light, aerodynamic hybrid vehicle with three-to-five-times better mpg than your average bear, with comparable performance, safety, usefulness and affordability. According to US News and World Report, Lovins recently told a National Academy of Sciences energy summit that building cars with advanced lightweight materials like carbon fiber (instead of steel) would boost automotive efficiency to 85 mpg for midsize cars, 66 mpg for midsize SUVs. Lovins claims that "lightweighting" would also improve vehicle safety since the advanced materials can absorb "up to 12 times as much crash energy per pound as steel." Automakers aren't buying it. Literally. "Lightweight materials are horrendously expensive," GM Vice Chairman Bob Lutz told Automotive News [sub]. "People keep forgetting the cost equation." D'oh! Anyway, Lovins and Lutz must live in parallel worlds. "I'd say lightweighting is the hottest strategic trend in the industry right now," Lovins counters. Ah, "strategic." Meanwhile, Lovins' FiberForge seeks to capitalize on his faith in adding lightness.