Prices at the pump clearly are high enough to make fuel economy a primary concern for U.S. vehicle buyers today.
And about 29% of suppliers say they will reap benefits asMotor Co. and Corp. proceed with an ambitious rollout of hybrid-electric vehicles (HEVs) in the coming years.
These are among the key findings in Ward’s 28th Annual Supplier Survey, conducted this spring. Participating were 338 industry representatives – all of them Ward’s readers, including 157 supplier employees and 181 from the OEM ranks.
This year’s survey includes a series of questions addressing the subject of fuel economy, an expanding roster of available HEVs and the Big Three’s push for flex-fuel vehicles (FFVs) that can burn corn-derived ethanol, or E85, as well as gasoline.
There are about 6 million vehicles on the road already capable of running on ethanol, and the Big Three vow to double the annual production of FFVs to 2 million by 2010. Problem is, there are only about 800 E85 fueling locations in the U.S.
Still, about 40% of supplier and OEM participants in this year’s survey agree alternative fuels such as E85 will give U.S. auto makers an effective platform for competing with HEVs currently on the road.
However, an OEM reader points out ethanol will be a viable fuel only if there are enough accessible filling stations.
Another OEM participant notes fuel economy suffers when an FFV uses ethanol. “Once consumers realize this, they'll pay the extra for gasoline,” he writes. “Unless ethanol is 40% to 50% cheaper than gasoline, it is not economical to purchase since your vehicle will get 30% worse MPG (miles per gallon) than with gas.”
One route toward great fuel efficiency – at least in Europe – incorporates the increasingly popular diesel engine.
Judging by this year’s survey, respondents think diesels will continue to face an uphill climb persuading North American consumers that today’s diesel looks – and smells – nothing like the smoky, clattery mill of 25 years ago.
About 60% of supplier and OEM respondents agree diesels will continue to sell in small numbers in the U.S., even though they are extremely popular in Europe.
Some survey participants note diesel fuel is more expensive in the U.S. in relation to gasoline than it is in Europe and harder to find than regular unleaded gasoline.
Readers cannot seem to forget GM’s diesel blunder two decades ago. “GM in the 1980s destroyed diesel potential for at least another 10 years,” an OEM survey participant writes. “Many Americans have a bad impression of diesel vehicles,” a supplier reader writes. “No auto maker is willing to invest in diesel in the U.S.”
But a host of written remarks from survey participants suggests a groundswell of enthusiasm for new diesel engines, which, despite burning much cleaner than even a decade ago, will be increasingly difficult to sell in the U.S. in coming years due to stricter environmental regulations.
“The U.S. is ready for diesel,” writes a supplier respondent. “If clean diesel cars are made available in the U.S., they will sell,” writes another.
A number of survey participants single outAG’s TDI turbodiesels for being fun to drive, while achieving outstanding fuel economy.
“VW TDI diesels are the wave of the future,” writes a respondent. “Diesel vehicles are not being made available (in the U.S.) to the extent they are in Europe. That needs to change.”
Survey participants say it is only a matter of time before Americans fall in love with diesels. “The government should give credit to high-mileage diesels the same as they do for hybrids,” a supplier respondent writes. “Our clean-air standards need adjustment to permit diesels,” says another.
“If fuel economy continues to be such a high priority, diesels will gain wider acceptance,” a supplier reader says. “The Big Three have to commit marketing dollars. … GM andhave to offer small/midsize diesel options.”
Likewise, an OEM reader calls it “stupid to outlaw diesels in the U.S. (e.g. in California),” by way of environmental regulations. Another OEM reader considers diesels a better solution than HEVs, while a third OEM reader prods the Big Three to move forward with diesels for light-duty pickups.
“The U.S. should be developing diesel technology. Again, (they are) missing the targets,” an OEM reader says. “I think there is a market for diesels in North America that OEMs fail to satisfy.”
The survey also identifies an apparent disagreement as to how readily auto makers embrace supplier technology in confronting fuel-economy issues. Some 46% of OEM respondents say auto makers are seeking supplier input on fuel efficiency, compared with only 23% of suppliers who say so.
Overall, survey respondents agree the auto industry must put vehicles on the road that achieve much better fuel economy.
“All alternative fuels must be explored for the good of our Earth and our country,” writes an OEM respondent.