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GM, Ford may benefit from new fuel rules
Report: Shift to size-based fuel-efficiency standards for light trucks could help big SUV makers.
July 29, 2005: 6:58 AM EDT
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NEW YORK (CNN/Money) - An overhaul of current fuel-efficiency standards for light trucks may spell good news for embattled U.S. automakers Ford Motor and General Motors and hurt Japanese rival Toyota, a news report said Friday.

The Wall Street Journal reported the Bush administration is considering a major overhaul of the regulations.

As the rules stand now, companies that rely on sales of the biggest pickup trucks and SUVs get punished, the report said. Those companies include GM (Research), which relies heavily on sales of its Yukon and Tahoe SUVs, as well as Ford (Research), which sells more than 900,000 F-Series pickups a year, the newspaper said.

To meet the government's current fleet wide average of 21 miles a gallon, those companies have to sell more efficient smaller trucks -- sometimes at a loss, the Journal reported.

A new system that judges light trucks against other trucks of similar size is likely to change that, the newspaper said. Under the proposed new rules, which are expected by Labor Day, smaller vehicles would have to meet higher mileage targets than larger ones, the Journal said. That's a change from the current standard, which is calculated by averaging an entire fleet's gas mileage, according to the report.

The specific changes to be made aren't clear yet, the report said, but the shift to a size-based standard for light trucks -- a category which includes pickups and SUVs, as well as minivans -- could help domestic automakers while hurting Toyota (Research), which hasn't had much difficulty meeting current standards.

"It could be slightly more challenging ... for a manufacturer who sells a greater percentage of smaller or lighter trucks," Tom Stricker, regulatory-affairs manager for Toyota North America, told the paper.

But, the report said, the specifics of the overhaul aren't clear and could change. For instance, the administration could set a relatively high mileage standard for the biggest gas guzzlers, it said.

What is clear is that there will be some who benefit and some who lose out from the revised regulations.

"Any change in the system will create new winners and losers," Dennis Fitzgibbons, director of public policy at DaimlerChrysler's (Research) Washington office, was quoted as saying.

Overall, industry officials expect the government to raise the fuel-efficiency standards, but how it chooses to do so remains unclear, the newspaper reported. The changes for light trucks have to be finalized by April 1 of next year in order to take effect for the 2008 model year, it added.


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