Significant cut in gasoline use is decades away: automakers
by Mira Oberman
Sun Feb 11, 6:51 PM ET
CHICAGO (AFP) - It will be decades before the world will see a significant cut in global automotive gasoline consumption, automakers and analysts said.
While there have been major improvements in fuel economy and reduced emissions through the development of technologies such as hybrids and clean diesel, consumers are not adopting them quickly enough to make a serious dent.
Gasoline electric hybrids -- which can improve fuel economy by anywhere from 20 percent to 60 percent -- currently make up less than one percent of global sales.
Hybrid demand is primarily in the US market and is not expected to expand significantly as consumers shy away from the high price tag coupled with fuel economy improvements that only apply to stop and go city driving, said Eric Fedewa, an analyst at CSM Worldwide.
Biofuels such as ethanol -- which were touted by President George W. Bush in his state of the union speech last month -- actually reduce fuel efficiency and there are questions as to when they will become widely available.
Zero-emission hydrogen and electric-powered vehicle are still five to ten years away from becoming marketable and a hydrogen fuel delivery system still has to be developed.
Aerodynamic and engine efficiency improvements to traditional vehicles can barely keep pace with an expected two-percent annual increase in driving as a result of economic expansion.
But the biggest delay will come from the length of time it will take consumers to adopt new technologies and for automakers to shift the production systems away from traditional vehicles, said Larry Burns, GM's vice president for research and development.
"There are 850 million internal combustion vehicles in the world today. No matter what you come up with you're going to have to let that global car park play out and that's going to consume petroleum for some time going forward," Burns told AFP.
About 66 to 70 million new vehicles are sold every year and it will take 12 to 15 years to replace the global fleet, Burns said.
"It's going to take time to totally fix it and we don't have a 70 million unit a year solution sitting here that we can implement immediately nor will we take it in a step that big because that's not how technology is developed."
One major source of improvement in petroleum consumption has come from a preference shift among consumers towards smaller more fuel-efficient vehicles amid rising and unpredictable gasoline prices.
"That pressure on economy is going to continue going forward," Mike Manley, vice president for sales and market at the Chrysler Group told AFP.
"Many consumers now are looking at the total cost of ownership which obviously includes alternative fuels."
Manley said Chrysler expects demand for gasoline-electric hybrids and clean diesel vehicles -- which also improve fuel economy by 30 to 35 percent -- to grow to five to fifteen percent of the US market over the next five years.
But he warned that a dramatic shift away from trucks and large sports utility vehicles is unlikely, especially given that sales in those segments have already started to bounce back.
"A large percentage of the consumer market does care about (the environment) but for a lot of segments, their purchase decisions are not as discretionary as we think," he said.
"You get down to a level where people need a truck for the work they do and they need the utility," he said, adding that consumer preferences for riding high in an SUV also play a large part in purchasing decisions.
Ford has also shifted its production plans with the expectation that consumers will continue to focus on fuel economy and alternative vehicles, said Cisco Codina, vice president for North American sales and marketing.
The automaker is fighting perceptions that it has not focused on alternative fuels -- despite the fact that it was the first domestic automaker to bring a hybrid vehicle to the US market -- and plans to offer E-85 flexible fuel engines in half its nameplates, Codina told reporters recently.
"We are committed to being more fuel efficient and bringing more fuel efficient vehicles to the marketplace," he said.
"I think the consumer is really going to look at whether they want a V6 a 4-cylinder or a hybrid and that's just going to be another powertrain in the market place."
The question is how many consumers will choose the hybrid -- and how much more damage will be done to the environment in the meantime.
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