Mercedes Polishes Reputation With Assault on U.S. Gas-Guzzler Tax

YOUNTVILLE, CA – Another year, another handful of Mercedes-Benzes sheds the gas-guzzler label.

For model-year ’12, maintaining a well-established trend, the tri-star brand will have at least two fewer models on the annual hit list published by the U.S. Department of Energy and the Environmental Protection Agency.

The ’11 U.S. fuel-economy guide shows 12 Mercedes models are subject to the “gas guzzler tax,” one less than prior year but 10 fewer than 2006. And that trajectory will continue, the auto maker says.

“It’s going to have to,” says Stephen Cannon, vice president-marketing, Mercedes-Benz U.S.A. “The regulatory environment is demanding.”

The current mandate calls for auto makers to achieve a fleet-wide goal of 35.5 mpg (6.6 L/100 km) by 2016. But there is growing interest in a goal of 62 mpg (3.8 L/100 km) by 2025.

Instituted in 1978, the gas-guzzler tax is applied at time of purchase against cars with “exceptionally low fuel economy,” the fuel-economy guide says. The one-time levy ranges from $1,200 to $7,700.

In addition to eliminating models from the gas-guzzler list, Mercedes says it also has reduced the amount of tax due on five ’11 models: the S 600, S 65 AMG, CL 600, CL 63 AMG and CL 65 AMG.

Biggest winner was the S 65 AMG, which saw its applicable tax fall to $2,100 from prior-year’s $3,000, the auto maker says.

5.5L biturbo V-8 in CLS 550 offers 26.4% fuel-economy boost.

Models expected to escape the onerous stigma for ’12 are the CLS 550 and CLS 63 AMG. Both are redesigned and boast new engines that feature improved fuel economy.

Official ratings are expected early next month, but Mercedes says the 4.6L bi-turbo direct-injected V-8 in the CLS 550 will achieve city/highway fuel economy of 18-26 mpg (13.1-9.0 L/100 km). That’s good for a combined improvement of 26.3% from the 14-21 mpg (16.8-11.2 L/100 km) recorded by the outgoing car’s 5.5L V-8.

The AMG model benefits from a 5.5L bi-turbo direct-injected V-8 expected to deliver 15-23 mpg (15.1-10.2 L/100 km), a combined 26.4% better than the outgoing CLS 63’s 6.3L V-8, which delivered city/highway performance of 12-18 mpg (19.6-13.1 L/100 km).

Cannon notes these improvements are paralleled by output jumps. The CLS 550 V-8 generates 402 hp, for a 5.2% hike, while the AMG’s engine makes 518 hp, a 2.2% uptick.

Both cars also benefit from double-digit percentage increases in peak torque.

The elimination or reduction of the gas-guzzler tax is not a deal-clincher in the showroom, Cannon tells Ward’s. “It becomes less of an aggravation,” he says.

The ’12 CLS 550 and CLS 63 AMG start at $71,300 and $94,900, respectively, so would-be buyers generally can afford the levy. But that doesn’t mean they are not environmentally conscious, Cannon says.

“Gas-guzzler’s got a negative connotation, so even though (buyers) are not necessarily looking for a compact car to make their ‘green’ statement, they don’t want to make the opposite statement that says, ‘(Pollution) doesn’t impact me and I’m not concerned about it.’ To be able to remove that is a benefit for the brand and a benefit for the consumer.”

Mercedes also is working to improve the fuel economy of its vehicles that are not subject to the gas-guzzler tax. One of the most significant advances in its product pipeline is the ’12 C-Class, which will feature a 1.8L turbocharged direct-injected I-4 – the first U.S.-market 4-cyl. Mercedes engine since 2005.

Initially, it will power rear-wheel-drive versions of the C250 and C350. But when the next-generation C-Class arrives in 2013, availability will be expanded to C-Class models equipped with Mercedes’ 4Matic all-wheel-drive system, including the C300.

The auto maker also is keen on expanding availability of its diesel engines. But the technology – a clean, viable alternative to gasoline-powered engines, Cannon says – still carries a stigma from sooty, smelly iterations of decades past.

Today’s clean diesel engines afford fuel-economy advantages in the range of 20%.

“It just underlines how emotional a car purchase is, because if people were purely rational, they would make different decisions,” Cannon says, adding those decisions likely would favor diesel over gasoline.

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