Detroit Plays Catch-Up in Migration to Smaller Engines

As gasoline prices continue to rise, installations of thrifty 4-cyl. engines have trended upward, larger mills have become scarcer and Chrysler LLC is tracking ahead on all fronts, according to Ward's data.

Related document: % Engine Installations on U.S. Domestic Cars and Lt. Trucks, '07 Model Year

Among ’07 passenger cars assembled in North America and sold in the U.S. through January, 4-cyl. engines were the most popular, accounting for 50.6%, or 1.7 million units of production through January. That compares with 2.8 million units, or 48.5%, for the entire ’06 model year.

Chrysler ranks as the biggest booster, buoyed by wider availability of 4-cyl. engines. The auto maker features the economical mills in five model lines this year compared with one in 2006.

Through January, Chrysler built 83,008 ’07 cars with 4-cyl. engines, or 42.5% of its total passenger-car run. That is well ahead of the 18.1% installation rate for the entire ’06 production run, when 92,478 engine bays were filled with 4-cyls.

On the volume side, however, the Detroit Three remain well behind their Japanese rivals. Toyota Motor Engineering & Mfg. USA led the way, installing 4-cyl. engines in 516,052 of the passenger cars it assembled in North America. That represents 81.5% of its ’07-model production through January. For the entire ’06 model year, Toyota’s installation rate was 80.1%.

Honda of America Mfg. Inc. was next with 422,108 4-cyls., or 78.2%, up from 76.4% for ’06.

Meanwhile, General Motors Corp. is on course to record an increase to 35.3% from 33.5%, but its volume ranked third with 303,524 units.

Toyota Camry’s 2.4L, in-line 4-cyl. engine.

Ford Motor Co. also saw an increase. Its 197,106 4-cyl. cars represent a 30.7% installation rate, compared with 25.4% for the ’06 production run.

Meanwhile, 8-cyl. engines were installed in 240,945 North American-made passenger cars, or about 7.1% of ’07 domestic car production, through January. That compares with 596,449 units, or roughly 10.2% of all domestic passenger-car production, for the full ’06 model-year.

Ford accounted for the largest share of 8-cyl. installations, with 131,820 units, or 20.5% of its ’07 passenger-car production. The Ford Mustang grabbed more than one-third of the installations.

Chrysler used 8-cyl. engines in 27,342 of its cars for 14% of its passenger-car total, while GM installed 8-cyl. mills in 81,783 units for 9.5% of its passenger-car total.

Installations of V-8s are down most sharply at Chrysler, which has trimmed 8-cyl. use in passenger cars by roughly half. Ironically, Chrysler also lays claim to what is arguably the best-known 8-cyl. engine on the market – the Hemi. However, take-rates have slipped as gasoline prices have risen.

Hemi take-rates were well above 60% when the engine first launched in 2004. And they declined more slowly, hovering near 50%, than the industry norm for a new product.

They now stand at about 37%, Chrysler says.

Gasoline prices have spiked in spring every year, since 2005. All-time highs have been recorded twice during that period.

And like the 8-cyl. mills, installations of 6-cyl. engines are trending downward, Ward's data reveals. Through the initial months of ’07 production, auto makers installed 6-cyls. in 36.8% of all domestically produced passenger cars, or 1.3 million units.

That compares with 2.3 million units, or 38.8% of all ’06 passenger-car production.

Among Detroit-based auto makers, Chrysler leads the pullback, installing 6-cyl. mills in 43.5% of its ’07 production versus 53.2% for all of model-year ’06. GM, Ford, and Toyota have cut use of the architecture more modestly.

The light-truck story is slightly different. Through January, 8-cyl. engine installations stood at 1.7 million units, or 44.8% of all light truck production through January.

That’s up slightly from the 3.2 million, or 41.6% of trucks that carried an 8-cyl. mill for the entire ’06 model year.

GM has driven that growth, supplying the architecture to 957,332 units, or 61.1% of its ’07 trucks, compared with 1.2 million units, or 49.6% of its truck mix for all of ’06.

Ford trimmed its 8-cyl. truck installations to 54.4% from 63.2%. And the same holds true with Chrysler, which saw a reduction to 22.6% from 26.5%.

In a trend that reflects the soft sales of its first fullsize pickup, Toyota installed 8-cyl. engines in 61,636 Tundras for a rate of 21.4%. The last model-year of the previous-generation Tundra saw 152,510 8-cyl. installations for a 24.6% rate.

Nissan North America Inc. also is tracking a decline in 8-cyl. installations. Through January, 29.8% of ’07 Nissan trucks featured 8-cyl. mills, down from 34.1% for ’06.

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