Consumers in the driver's seat

It’s shifting consumer demand that will drive increases in vehicle fuel efficiency 25

I frequently read about perceived (or alleged) disagreements between the environmental community and the auto industry. A few of them are real disagreements over policy, many are practical disagreements over how best to achieve common goals, but many perceived disagreements are not, in fact, disagreements at all.

For instance, some people believe the auto industry stands in the way of higher average fuel efficiency in the U.S. That's just not the case, which I'll explain in a moment. First, an area of agreement: in his New York Times column, Paul Krugman writes about fuel efficiency and our automotive future:

Europeans who have achieved a high standard of living in spite of very high energy prices -- gas in Germany costs more than $8 a gallon -- have a lot to teach us about how to deal with that world. If Europe's example is any guide, here are the two secrets of coping with expensive oil: own fuel-efficient cars, and don't drive them too much. Notice that I said that cars should be fuel-efficient -- not that people should do without cars altogether. In Germany, as in the United States, the vast majority of families own cars (although German households are less likely than their U.S. counterparts to be multiple-car owners).

But the average German car uses about a quarter less gas per mile than the average American car. By and large, the Germans don't drive itsy-bitsy toy cars, but they do drive modest-sized passenger vehicles rather than S.U.V.'s and pickup trucks. In the near future I expect we'll see Americans moving down the same path.

This may come as a surprise to some people, but ... we agree. In fact, this is what we in the auto industry have been saying all along. Automakers don't simply watch the latest sales figures and crank out whatever cars consumers wanted last month. For years now, we've been developing new designs and new technologies. However, the key is not what the auto industry is willing to make -- we make more than 70 models of alternative fuel automobiles available, and more than 100 models that have fuel economy ratings of more than 30 mpg on the highway -- but what consumers will buy. The fact is that from May 2002 to March 2008, we have only had one month where passenger cars outsold light trucks. Why? Because, despite a few spikes, gas was relatively inexpensive.

But with gas prices climbing -- and staying high, rather than fluctuating back and forth -- consumers are actually changing their habits, changing driving patterns, and buying more fuel efficient cars. They're doing it because the market works. People respond to incentives. Gasoline at almost $4.00/gallon is doing more, faster, for fuel efficiency than any government regulations.

This sustained increase in the price of gas is what we have been saying is needed to drive a significant increase in the fuel efficiency of the cars American choose to drive.

The only complaint I would have with Krugman's piece is the oversimplification of the difference between Germany (EU) and the U.S. There are glaring differences in diesel penetration, transmissions, and cylinder counts, all illustrated in the following chart:

U.S. and Europe, diesel

Contrary to Krugman's assertion, the vehicles sold in Europe are much different than the U.S. Those differences have an impact and that fact that should be recognized. In fact, this is a point the Wall Street Journal brought up last year, pointing out:

A main reason Europeans buy smaller, diesel-powered vehicles is that fuel taxes are heavier on gasoline than diesel, and diesel vehicles enjoy other tax breaks. In the U.S., diesel fuel has at times cost more than gasoline. Add stern clean-air regulations, and diesels claim less than a 1% market share in the U.S., according to Ward's Automotive Group.

The auto industry really does want to be part of the solution, and we've been developing the green technologies and car designs for many years so that we will be ready for this emerging shift in consumer demand. However, to do what needs to be done -- enhance energy security, reduce greenhouse gas emissions, and ultimately lower the price at the pump -- we need a comprehensive policy that addresses not only vehicle fuel efficiency but also alternative fuels, refueling infrastructure, and consumers, too.

Charles Territo is director of communications for the Auto Alliance, which represents BMW, Chrysler, Ford, GM, Mazda, Mercedez Benz, Mitsubishi, Porsche, Toyota, and Volkswagen.

Advertisement
Advertisement
  1. GreenEngineer Posted 3:28 am
    20 May 2008

    car-centricismNotice that I said that cars should be fuel-efficient -- not that people should do without cars altogether. In Germany, as in the United States, the vast majority of families own cars (although German households are less likely than their U.S. counterparts to be multiple-car owners).
    The fact that Krugman felt it necessary to make this distinction points our a serious failure of activists to effectively communicate the necessary changes.  The thing that we must achieve is NOT the elimination of the personal automobile, but the change of the automobile from the primary mode of transportation to one of several modes that people can choose from.  This implies major changes in urban design, transit investment, and consumer culture, but it is not the same as getting rid of the car altogether.  For large areas of low population density, the personal automobile really is the best and most feasible (and probably most efficient) transportation solution.  For urban areas, other solutions are both possible and necessary.  It's a matter of using the right tool for the job.
    It is unfortunate that, with this as with so many environmental issues, the entire discussion is defined by the extremes of the scale: it's as if we either have to maintain a culture in which the car is king, or we have to give it up entirely.  Some part of this blame falls to the environmentalist community for falling into knee-jerk extremism, part with the media because extreme positions are easier to explain than nuanced ones, and part with the industry itself, which realizes that, as long as the issue is framed in those terms, Americans will continue to hold tightly to their cars and their "American way of life" until the very end.
  2. Nell Posted 3:31 am
    20 May 2008

    LudicrousThe auto industry has routinely resisted major change from seat belts to air bags and pollution controls--done largely through their lobby arm, the Alliance of Auto Manufacturers.  The idea that the American auto industry "really does want to be part of the solution" flies in the face of every backward step the industry has taken to block progress from killing the electrical vehicle to waging legislative war against California and multiple other states for attempting to reduce global warming pollution from tailpipes.  Honestly, if the auto industry is just waiting for consumer demand to rise so they can sell their already green cars it's no wonder they're losing market share to Japan.
    Additionally, while opposing views should always be encouraged on a blog forum, inviting a pr flack for the auto lobby to pollute one of the best environmental blogs on the web is poor form.  

  3. Bart Anderson's avatar

    Bart Anderson Posted 3:34 am
    20 May 2008

    Let bygone be bygonesThanks for braving the lion's den, Mr. Territo. I have noticed that there's been an uptick in the green awareness of auto manufacturers lately.
    Still, what is most convincing is action, not words.
    Also, it would be good to have an honest reappraisal of the role of the auto industry. Yes, there were consumer preferences which it was profitable to respond to (e.g. pick-ups and SUVs), but the U.S. industry was not been overeager or forward looking when it came to efficiency. I think part of this is inertia, part culture.
    The Japanese manufacturers were selling to the same consumers and have managed to come up with some profitable high-efficiency designs.
    But let it pass. The main thing is what happens in the future.
    One thing to look out for -- the price of oil will probably continue rising in the long run. I hope the auto industry has some think tanks and white papers with plans for when oil is $200 or $300 a barrel.

    Bart


    Energy Bulletin
  4. Alex 77 Posted 4:12 am
    20 May 2008

    I can't believe my lying eyes!Has Grist now taken to publishing the sophistry of one of the industries most responsible for the environmental destruction it lives to fight? Can we now look forward to a column by a "guest author" extolling the common goals of the environmental movement and the coal-to-liquids industry? I'm disgusted that you've chosen to print this. Every word is a lie, and your entire staff knows it. Auto manufacturers have done everything in their considerable power to block responsible energy and environmental policy for a century, no matter how massive the cost to the planet, no matter how tiny the cost to their margins. And to let this shill float the idea that manufacturers are manufacturing their vehicle fleets "according to consumer demand" is the biggest letdown of all. These companies CREATE consumer demand in whichever direction maximizes their profits, via omnipresent marketing and PR throughout our culture, which has usually meant persuading people to desire the largest, least safe, least efficient vehicles available.
    Please realize that your readership is more educated and discerning than to let this piece stand.

  5. javaearth Posted 4:22 am
    20 May 2008

    another important graphYou need to show another important graph. - How many people use public transport in the US versus EU.

  6. David Roberts's avatar

    David Roberts Posted 4:40 am
    20 May 2008

    WordsAdditionally, while opposing views should always be encouraged on a blog forum, inviting a pr flack for the auto lobby to pollute one of the best environmental blogs on the web is poor form.  
    I'm confused how the two parts of this sentence fit together.
    Please realize that your readership is more educated and discerning than to let this piece stand.
    Then don't let it stand. You have an open forum.

    grist.org
  7. Tasermons Partner Posted 4:51 am
    20 May 2008

    0.2% diesel......I presume that doesn't include 18 wheelers and delivery trucks, since I would think that category (which is almost entirely diesel) makes up much more than .2% of America's total vehicle fleet.
  8. Tasermons Partner Posted 4:53 am
    20 May 2008

    Driving Distance......another important factor is driving distance, since Europeans typically don't drive near as far as average Americans do.
  9. kmp Posted 5:35 am
    20 May 2008

    Hard to swallowThe auto industry really does want to be part of the solution, and we've been developing the green technologies and car designs for many years so that we will be ready for this emerging shift in consumer demand.
    OK, so what you're telling me is that the American auto industry has their own version of a Prius, but they are just "waiting until the time is right" to bring this car to the market?  With the Prius posting record sales for at least a year now, what are American car manufacturers waiting for?  And if you have the green technologies and fuel efficiency to solve the problem, why is the sales gimmick du jour subsidizing consumer gas payments in order to sell gas-guzzling vehicles?  If automakers "want to be part of the solution" why, less than a year ago, was the Alliance running ads to fight against the increase in CAFE standards?
    Let's face it: you dropped the ball and you've been scrambling to preserve the status quo until you can figure out what the hell to do in this new economy.  Fighting legislation aimed at increasing the fuel-efficiency of the American car fleet is not "part of the solution." Continuing to make fuel-inefficient cars & trucks because "that's what consumers want" is like only feeding your kid jellybeans, because "when I offer him jellybeans or carrots, he always picks jellybeans."
    I find this attitude insincere at best and condescending at worst.  I would have much more respect if you simply came out and said "Look, we underestimated the severity and speed with which the impacts of global warming & peak oil would affect our business.  We are now forced to play catch-up, but here are the strategies we are aggressively pursuing - here is how the American auto industry can put itself back on top of the market and save the planet at the same time."  
  10. racc Posted 7:29 am
    20 May 2008

    Shut the Industry DownThe US auto industry is a disaster both for the environment and investors. Time to shut it down and invest in transit and rail. We need to catch up with the rest of the world and can no longer afford to prop up a failing industry based on yesterdays form of transportation. The automobile is simply not an option in a resource constrained world.
  11. bigTom Posted 7:33 am
    20 May 2008

    marketting as driver of demand.   Auto marketing is probably the dominant employer of the main stream media in the Untied States. Instead of being proactive about the coming liquid fuels crisis, the American Automobile industry has promoting the cultural meme, that the consumer needs big overpowered vehicles in order to be considered fully human. The goal is always to sell those vehicles, and vehicle classes with the greatest profit margin. Rather than looking forward to what is needed for the long term viability of motor travel, and the American economy, the industry has continued to promote the types of products and lifestyles, which now that peak oil is hitting, are being seen to be so problematic for the country, and for the individual consumers. The industry should be looking ahead, ten twenty, even thirty years, and recognizing that a liquid fuels crisis would eventually come, start using it's advertising muscle to prepare the country for the coming changes. Instead they have focused on short term results, promoting what will help the next few quarters, at the expense of long term viability of the industry.
       This is really a structural problem, based upon the current system of executive incentives, which encourage a focus of short term profitability (i.e. being able to cash in stock options so that the executive need not care about long term viability).
  12. Delay And Deny's avatar

    Delay And Deny Posted 10:38 am
    20 May 2008

    What about houseprints?

    Europeans also have much higher population densities.   Things are smaller, and much closer together.
    I'm really surprised that Grist Ecologists worry their heads about how much fuel a car uses, but then completely ignores the size of peoples' "houseprint" on the planet.   Is that because it would soil relationships with their rich Hollywood sponsors?  I mean, you've got Ed Begley Jr promenading around in a 3-wheeled electro-buggy, but then parking it in a 20 room mansion.   As Arsenio said, things that make you go "hmmmm...."



    Texeme.Construct(function(x)=Participation(x))
  13. Tasermons Partner Posted 10:44 am
    20 May 2008

    Memory loss...I'm really surprised that Grist Ecologists worry their heads about how much fuel a car uses, but then completely ignores the size of peoples' "houseprint" on the planet.
    jabailo, ya act like you've only been on this site a few days.  Really now, I can't even count the number of articles and discussions we've had on this site 'bout McMansions and inefficient housing.
  14. Tasermons Partner Posted 10:46 am
    20 May 2008

    Here......browse through this section, jabailo.
    http://www.grist.org/topic/green_living
    There's at least several dozens articles in that section alone that refer to city size and housing footprints and related stuff.
  15. Delay And Deny's avatar

    Delay And Deny Posted 10:51 am
    20 May 2008

    Always Look for...the Union LabelThere's at least several dozens articles in that section alone that refer to city size and housing footprints and related stuff.
    Sure, sure...but I'm talking about day to day type stuff.   It seems that Grist often stereotypes the suburban dweller as this wasteful guy, although I'm suburban and live in a one-bedroom apartment.   Meanwhile they idealize Hollywood types and Greeners in Vermont who live in gigantic houses.  
    How about some scrutiny?
    How about setting up an EPA standard for housing energy costs per person?  How about having a label on everyone's house and land that says how much energy per person is being used?

    Texeme.Construct(function(x)=Participation(x))
  16. Tasermons Partner Posted 11:11 am
    20 May 2008

    LEED...How about setting up an EPA standard for housing energy costs per person?  How about having a label on everyone's house and land that says how much energy per person is being used?
    Ever hear of LEED?  Doesn't really work on a per-person basis, but works great in terms of comparitive energy consumption.  'Specially when building size categories are taken into account.
  17. Delay And Deny's avatar

    Delay And Deny Posted 11:26 am
    20 May 2008

    4 kids in the SUV versus one in the Prius...Doesn't really work on a per-person basis
    Nor does mileage for cars...

    Texeme.Construct(function(x)=Participation(x))
  18. Quinn Posted 1:19 pm
    20 May 2008

    Damn you Adam Smith!The auto industry is appealing to a specific demographic when you see a Hummer hauling 20,000 tons of concrete and steel in between possessions in a Patriots game.  Now unless you volunteer your spare time chasing illegal immigrants in the New Mexico desert or need to ford a river to get to your house, I think we can all agree that a Hummer is pretty excessive.  Now who is to blame for promoting such excessiveness?  The consumer who wants to buy one or the industry that wants to sell one?  In my opinion, it's not that simple.  Arguing over if industry drives consumer culture, or if consumer demand drives industry direction is oversimplifying the issue and placing 100% of the blame on one side.  The relationship is not mutually exclusive.  Both parties, consumer culture and industry, share the blame for the American gas-guzzling fetish.  Not only that, but there are hidden parties that ought to be held accountable that haven't even been mentioned in this forum.
    Here's my list of blamable parties (some overlap):
    -Auto Industry

    -Consumer Culture

    -Adam Smith and David Hume

    -Consumerism

    -Capitalism

    -Oil and Gas Industry

    -Government

    -Lobbyists
    And here's my logical reasoning.
    I blame the auto industry for irresponsibly offering to the public vehicles of blatant excessiveness.

    I blame consumer culture for demanding vehicles of blatant excessiveness.

    I blame consumerism for establishing excessiveness as a status symbol and a sign of wealth.

    I blame capitalism for spawning consumerism.

    I blame Adam Smith and David Hume for capitalism.  ;-)
    I blame government for not having the balls to enforce reasonable mpg standards (cough, cough, cafe, cafe)

    I blame lobbyists for castrating the government.

    I blame both the auto industry and the oil and gas industry for their lobbyists.  

    I blame capitalism for the aforementioned industries' motives.

    I once again blame Adam Smith and David Hume for capitalism.
  19. spaceshaper's avatar

    spaceshaper Posted 1:38 pm
    20 May 2008

    Part of the solution? Which part would this be?"Life - life is high school with money" (Cadillac Escalade ad directly tapping peer group status anxieties).
    Pretty typical of the irresponsible boy racer sh*t auto marketing of the last couple of decades. So much for just selling what people want to buy.
    Vroom vroom. See you in hell.

    The true meaning of life is to plant trees, under whose shade you do not expect to sit.
  20. hapa's avatar

    hapa Posted 2:20 pm
    20 May 2008

    i don't understandwhat's the use of this piece?
    begging for enviros not to block a government bailout of domestic auto production?
    car company person, your industry's about to shrink mightily, and you'll be lucky if your grandkids don't hate you and us and everybody adult right now for bringing down long misery on their heads.
    i'd get into the wind turbine business, the bus business, the train business -- if i were you.
  21. Biodiversivist's avatar

    Biodiversivist Posted 2:33 pm
    20 May 2008

    Oh brother (...eyes rolling)However, the key is not what the auto industry is willing to make -- we make more than 70 models of alternative fuel automobiles available, and more than 100 models that have fuel economy ratings of more than 30 mpg on the highway [but in the mid twenties everywhere else] -- but what consumers will buy.
    Consumers were buying the Prius faster than Toyota could to make them long before this gas price spike. Detroit CEOs have had their collective heads up their collective asses. Here is a good example of what I'm talking about.
    Alternative fuel vehicle = Flex Fuel corn ethanol debacle, food shortages, Gulf of Mexico dead zone, and carbon sink usurpation.
    we need a comprehensive policy that addresses not only vehicle fuel efficiency but also alternative fuels, refueling infrastructure, and consumers, too.
    Refueling infrastructure? You don't need gas pumps for ethanol. Assuming it isn't worse for the environment than fossil fuels, you could just blend more of it into our gas supply.

    In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
  22. wgartist Posted 2:08 am
    21 May 2008

    Car hegemony"not that people should do without cars altogether"

    This is where people like Krugman (and many others) really don't get it. Cars are a hegemonic technology. They don't co-exist with other methods of transportation, they drive it out. If you don't believe this, just try walking along any 4 or 6 lane road in your vicinity. Or biking along it. Or waiting for the bus along it. Cars take up space, they degrade the environment severely. They're dangerous and threatening. They allow the rich to push aside the poor.

    One of the major efforts of environmentalists should be to break the hegemony of the car completely. Do away with them completely and never let them return.

  23. Delay And Deny's avatar

    Delay And Deny Posted 2:42 am
    21 May 2008

    Car SegregationCars are a hegemonic technology. They don't co-exist with other methods of transportation, they drive it out.
    I strongly agree, but our fixes would be different.  I am in the middle of advising on the new Transportation Master Plan here in Kent as a member of the Kent Bicycle Advisory Board.   One member of the board is strongly in favor of mixed use roads, more bike lanes, sharerows, road "diets" (ceding lanes to bike use).
    I am of the opinion you express, that cars are completely incompatible with pedestrians and bicycles and attempts to "integrate" will only result in more fatalities and accidents.
    My bent, however, is not to elimiate the automobile, but to provide more and further segregation.  Get the cars away from the sidewalks and bike lanes as fast as the driver hits the road...take them to segregated highways, and let them re-emerge as close to their destination as possible.
    They're dangerous and threatening. They allow the rich to push aside the poor.
    True, but for the opposite reason.  Why is it the countries that have a large middle class also have more cars.  Cars put power into the hands of the Average Joe.   Think of royalty.   They stay up on their horses to trod the Commonfolk.   The car is the horse.
    With a car, Joe is no longer dependent on the state run transit systems.   He can live in more places and have more choices of home.    This is why the current situation wants to curtail him...because it's the notion of American Independence that is at stake!

    Texeme.Construct(function(x)=Participation(x))
  24. hapa's avatar

    hapa Posted 3:24 am
    21 May 2008

    "more choices of home"yes, please. i'd like to live on mars. this planet's getting all wored out.
  25. wgartist Posted 3:52 am
    21 May 2008

    State run transit systemsWhat kind of ignorance is this? It's the state that builds roads and all the other infrastructure needed to support cars.

    Railroads, at least in the U.S. are privately owned. So are (or were) many bus and streetcar companies. It's the car that deprives the people of freedom and allows the state to control transportation. Pedestrians aren't required to show their papers, drivers are. Cars are constrained to go only in certain places, at certain speeds, and are required to arbitrarily stop and go. And you've got to pay every time you use one.

    Cars are not only hegemonic, they're dictatorial. traffic lights train you to be an easily controlled moron.

Add a Comment

You are not logged in. Thus, you cannot post a comment. If you have an account, log in. If you don't have an account, well, by all means go make one! Meet you back here in five.

Hello, Visitor!    Why not register?

Advertisement