The doomsayers were saying it would not happen, it could not happen, that car companies were incapable of meeting strict 2016 fuel economy regulations without suffering cataclysmic damage to their health as viable companies. Apparently they were wrong.
Just days ago, for example, Nissan Canada proclaimed that, thanks to a strict diet, technology improvements and an aerodynamic design, the all-new 2013 Nissan Altima will offer best-in-class fuel economy figures of 5.0 litres/100 km highway when this mid-size sedan goes on sale in a few weeks’ time. The Altima, at least for now, is ranked as the most fuel-efficient vehicle in the Nissan lineup, besides the fully electric Nissan Leaf. Nissan says it is the thriftiest at the pump of all four-door cars of this size, too.
For now. But expected this fall are new versions of the Ford Fusion, Chevrolet Malibu, Honda Accord and Dodge Avenger. Ford, naturally, is targeting best-in-class fuel economy and, to get there, the Fusion lineup will consist strictly of four-cylinder engines. The Malibu? Already an Eco version – a mild hybrid – is on sale in the United States and it’s a fuel-miser of a mid-sizer, too.
Honda is anxious to reclaim its fuel-efficiency mojo, starting with the new Accord, and the Chrysler Group has made fuel efficiency one of the pillars of its product revival. The point is, these mainstream sedans are helping various car companies stay on track to meet 2016 fuel economy rules that require each auto maker achieve a fleet-wide average of 6.67 litres/100 km.
Yet, just two years ago almost to the day, highly influential and well informed experts such as auto analyst Dennis DesRosiers were saying this sort of thing would be impossible.
“Think about this: In Canada, we have witnessed a 1.0 litre per 100 km improvement in the last 25 years, moving from 11 litres per 100 km to 10 litres per 100 km. Roughly 10 per cent. And this was an era of unprecedented technological improvement,” noted DesRosiers back then in an “Observations” to clients.
“Does anyone truly believe that we can now move to below 7.0 litres per 100 km in the next six years? I fully understand the potential for hybrids, electrics and other advanced power trains, but this level of improvement is just not achievable.”
Well, yes it is.
DesRosiers also argued in 2010 that the new regulations place the entire burden on auto companies to reach stringent fleet-wide fuel economy standards that are inconsistent with consumer behaviour dating back decades. Governments, he said, “stubbornly refuse to tell the consumer what he does not want to hear: horsepower levels need to fall” for fuel economy to rise dramatically.
Well, no they don’t. Consider again the 2013 Altima. It has a redesigned 182-horsepower (estimated), 2.5-litre, DOHC, inline-four-cylinder engine under the hood. The outgoing 2012 Altima is powered by a 2.5-litre four-banger rated at 175 horsepower. Power up, fuel economy down.
Nissan says the Altima is extraordinarily fuel efficient and more powerful for two main reasons: the 2013 car is 32 kg lighter than the 2012 model and Nissan’s next-generation continuously variable transmission (CVT) is a wondrous piece of engineering. Nissan redesigned 70 per cent of its parts while reducing internal friction by up to 40 per cent (versus the previous design). All with no loss of drivability and responsiveness, thanks to smart software and expanded gear ratio coverage.
There there’s the price issue. Two years ago, Environment Canada estimated the new fuel rules will drive up the average purchase price of a 2016 vehicle by $1,195 over 2008 levels. That is, the technology needed to meet the 2016 standard would add 5 per cent to the average $25,000 cost of a vehicle in 2008.
Well, perhaps not. This summer, Nissan will start selling the 2013 Altima at a base price of $23,698, which is $300 less than the manufacturer’s suggested retail price of the 2012 starter model. As it turns out, Nissan Canada marketing director Judy Wheeler isn’t just spinning us when she says: “The new Altima proves that dynamic driving performance and outstanding fuel economy are not mutually exclusive.”
Exactly. And Nissan is not alone here. All the world’s major auto makers are proving they can do what some said was impossible just 24 months ago. While DesRosiers and others were arguing that the technologies required to meet the upcoming corporate average fuel economy rules would add perhaps as much as $5,000 to the price of a new vehicle, Nissan for one has lowered the price of the highly fuel-efficient 2013 Altima. Some were saying it could take car buyers as many as 10 years to recoup the added cost of the 2016 regulations, but the reality is entirely different.
As DesRosiers himself noted just last month, “With increasing regularity, vehicles in the B- and C-size classes [subcompact and compact cars] are meeting or exceeding stringent 2016 fuel efficiency regulations. Nearly all the major products in these segments have attained or will soon attain that goal, and the pool of 40 mpg sedans continues to deepen with every round of vehicle introductions. With some D-size products now hedging into compliance, it’s evident that technology will win the day.”
Just as Mark Twain famously noted that reports of his death had been greatly exaggerated, DesRosiers points out that “Warnings of negative changes in vehicle mix (i.e., the types of vehicles offered to consumers) may have been overstated …”
The story here is of an auto industry quickly bringing to market new models well on the road to being in compliance with 2016 CAFE rules.
“The past 18-month window has witnessed the introduction of many of the products that will see their makers over the 2016 hurdle,” notes DesRosiers. “We are now deeply embedded in the most challenging product cycle auto makers have faced since the 1970s. Most heads appear to be staying above water.”
Oh, it’s better than that for most car companies. In Canada, sales of new light vehicles are up 8.2 per cent year-over-year and DesRosiers is suggesting the reason why may be a byproduct of those very tough fuel economy rules – the ones that some said were impossible to meet and unreasonably burdensome on car companies and consumers alike. In a nutshell, DesRosiers believes Canadian consumers are buying new vehicles in surging numbers because it’s saving them money at the fuel pump, and not just a small amount.
In 2001, he points out, the top 20 best-selling veh icles used an average of $4,331 of fuel per year (unweighted). That compares to an annual average fuel bill of $3,269 for today’s top 10 sellers. The savings: $1,062 a year, despite spiking pump prices.
“Anyone trading a 2001-generation product (which could include anything sold within five years on either side of that date) for a modern-day equivalent can expect to save an average of roughly a hundred bucks per month on gas,” notes DesRosiers. “That’s a cellphone bill, a trip to the grocery store or a child’s birthday party. But more to the point, at current transaction prices it also represents a 20 to 25 per cent lower monthly payment on a new vehicle.”
Some of what is happening here is the result of a change in the nature of the top 20. As DesRosiers points out, the “Chretien-era list” was comprised of “eight entry-level vehicles, eight mid-sizers and four pickup trucks,” while today the top 20 includes 13 entry-level models, three mid-size vehicles and four pickups.”
Today’s top 20 have a combined 8.7 litres/100 km, versus 11.5 litres/100 km combined a decade. “And fuel efficiency is the gift that keeps on giving; most vehicles bought today will still be on the road 20 years from now,” says the analyst.
The impossible is now a reality and it’s putting money in the pockets of consumers thanks to fuel savings – fuel savings delivered without compromising performance and safety.
And the doomsayers said it couldn’t be done.