Detroit's blue skies clouded by worries about fuel economy

Tue Jan 13, 2015 9:22pm EST
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By Joe White

DETROIT (Reuters) - Auto industry executives see nothing but blue skies in the U.S. market, especially compared with troubled Western European economies or slumping emerging markets.

There is just one, increasingly vexing problem: The vehicles American consumers will pay a premium to own are not the fuel-sipping small cars or electricity-powered models that they have been lavishing capital on to meet government emissions regulations. Instead, what is selling as gas prices fall are big trucks, SUVs and high-performance luxury cars.

The disconnect between sales trends in the United States and regulatory demands is the hot topic among executives gathered for the annual Detroit auto show.

“It’s the CO2 stuff that’s wagging the dog more than anything else,” said Fiat Chrysler Automobiles CEO Sergio Marchionne, who tends to say out loud what other industry executives say in private.

FCA loses money on electric cars it sells, he said. But FCA will not stop working on future electric cars because of cheap gas. Oil prices fluctuate, but the U.S. government has not changed its requirement to build vehicle fleets that will average 54.5 miles per gallon by 2025, he said.

“It is making our life a lot more complicated,” Marchionne said.

Marchionne called on the U.S. government to give automakers more time to comply with the 54.5-mpg standard.

Officials at other automakers hint that the U.S. Environmental Protection Agency could flex its rules to give them mileage credit for installing autonomous driving features – which could save fuel – or advanced safety systems, without taking the politically awkward step of abandoning the headline fuel economy target.   Continued...

Fiat Chrysler Chief Executive Sergio Marchionne gives opening remarks during the FCA Investors Day at Chrysler World Headquarters in Auburn Hills, Michigan May 6, 2014.   REUTERS/Rebecca Cook