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Auto industry backs commitment to fuel economy

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Author: The Associated PressMon, 2017-03-20ID: 1489950340737707200DEARBORN: Just because President Donald Trump may weaken US fuel economy requirements; do not expect gas guzzlers like the giant 13 miles per gallon (mpg) Hummer H1 to make a comeback. Executives from automakers and suppliers recently gathered at a conference outside of Detroit said looser fuel economy standards might allow for sales of more trucks in areas where they are popular. But otherwise, the pursuit of fuel-efficiency technologies will proceed unabated.Last week, Trump visited Detroit to announce that his Environmental Protection Agency (EPA) will re-examine gas-mileage requirements that were affirmed in the Obama administration’s last days. Those regulations require the fleet of new cars and trucks to average 36 mpg in real-world driving by 2025, about 10 mpg over the current standard. Environmentalists warned Trump’s decision could reverse years of reduced tailpipe emissions.“We are all global companies. We have to design our vehicles to be fuel efficient not only in the US, but in Europe and Asia,” said John Juriga, director of powertrain at the Hyundai-Kia technical center near Ann Arbor, Michigan.Automakers lobbied Trump hard to get the government to reopen a “midterm review” of the standards for 2022-2025. They say the EPA under Obama rushed out the review just a week before Trump took office, reneging on promises to get industry input. The agency also did not place enough weight on the pronounced consumer shift to sport utility vehicles (SUVs) and trucks, the automakers claim.The EPA decided the standards are flexible enough to account for the market shift, and that automakers have the technology to meet them. The agency calculated that higher standards would raise vehicle costs by $875, but that would be offset by $1,620 in savings at the gas pump.Given Trump’s promises to auto CEOs about easing regulations, it is likely the requirements will be weakened when the new review is finished by April of next year. Here is what that means for new vehicles:Truck and SUV sales likely will keep rising. Auto companies do not expect a major cut in the 36-mpg requirement. But they are hoping for standards that are flexible enough for them to sell more trucks and SUVs without penalties. Lower mileage requirements will let the industry sell more trucks and SUVs in areas like the Southwest, where they are popular. Profits from those sales will help pay for low-margin electric and other efficient cars sold on the West Coast, says Sam Abuelsamid, a senior analyst for the market research firm Navigant. If the standards remain the same and gas prices stay low, the industry contends it would lose money trying to sell efficient cars to people who do not want them.Like other automakers, Hyundai and Kia have the technology to meet the standards, but the cost has to be weighed against consumer demand, Juriga says.Paul Nahra, director of the Advanced Engine Group (AEG) for parts maker BorgWarner, says his company sells to automakers worldwide including regions with stricter gas mileage standards. “We need to be pushing the right technology that is going to get broad acceptance,” he says. For instance, China, Europe and Japan will all require fleets to average 47 mpg or higher by 2020.Work continues on downsizing engines, shedding weight and on new engine technology that makes a gas engine perform like a more efficient diesel. “So far there is no indication there is going to be any backtracking on this stuff,” says Abuelsamid.Proponents of the Obama standards are not happy. Environmental groups and the states of California and New York took legal action after Trump’s announcement and warned that higher pollution could harm children and senior citizens.
Main category: Business & Economy

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