Consumer group: Big 3 dragging heels on fuel economy

Car companies not reacting quickly enough to increasing fuel prices and consumer demand, Consumer Federation says.


Washington D.C. (CNNMoney.com) -- Despite losing sales to Japanese car companies, auto manufacturers, particularly U.S.-based manufacturers, have been slow to respond consumer demands for better fuel economy, according to a report released Tuesday by the Consumer Federation of America.

The report, citing data on sales and on new model introductions over the past several years, concludes that more stringent average fuel economy regulations are needed to push General Motors, Ford and Chrysler competitiveness in the burgeoning small-car market.

"During the past ten years, as gas prices have gone up, the number of models (trims) with 30 mpg or higher has gone down," the report says.

The CFA report counts 61 models available with mpg's greater than 30 in 1998 compared to 46 in 2007. That represents a shift from 8 percent of available models in 1998 to 4 percent today.

Meanwhile, according to the report, the number of models getting less than 30 mpg has gone up from 746 in 1998 to 1083 in 2007. That represents a change from 92 percent of available vehicles in 1998 to 96 percent today.

As gas prices increased between 2000 and 2005, Asian manufacturers improved the fuel economy of 68 percent of their most popular models while Detroit-based manufactures improved the fuel economy of only 48 percent of theirs. Meanwhile, fuel economy actually got worse for 52 percent of the most popular domestic models, while it declined for only 32 percent of the most popular Asian imports, according to the release.

U.S.-based auto manufacturers have also suffered a decline in sales over the past three years that, according to the CFA's analysis, can be tied directly to the increasing popularity of more fuel-efficient compact and small SUVs while Detroit manufacturers have continued to emphasize large trucks and SUVs.

"By passing a strong [Corporate Average Fuel Economy] requirement, without loopholes, Congress will be providing a blueprint to help the 'Big 3' become competitive again by building the vehicles that the American consumer really wants."

There is currently a proposal in Congress to increase the required average fuel economy for all passenger vehicles to 35 miles per gallon by 2020.

Rather than waiting for car manufacturers to respond to market pressures, congress should force them to act, said Jack Gillis, a spokesman for the CFA.

"If we don't make them change soon, they're probably going to kill themselves," said Gillis, "and we don't want that to happen."

General Motors counters that the CFA's analysis favors the Japanese manufacturers, such as Toyota (Charts) and Honda (Charts), by focusing on percentage of available models.

"It just so happens the Detroit manufacturers are happy to be full-line manufacturers," said Greg Martin, a GM (Charts, Fortune 500) spokesman. "unlike Honda which is content with a very specific segment of the market."

A "full-line manufacturer" is one that competes in all market segments from small cars to large trucks and SUVs.

General Motors sells 24 models that get 30 miles per gallon or better, said Martin, compared to 12 for Toyota and six for Honda.

"They should be embarrassed," Martin said of the CFA. "The report is bereft of any intellectual or academic rigor." Top of page

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.