Planet Gore

SAE Conference: What Buyer Demand for Fuel Economy?

Detroit — Even at $3.50 a gallon, a Society of Automotive Engineers panel revealed here today at SAE’s annual convention, industry consumer surveys find that fuel economy ranks well down the list of reasons that Americans purchase a car (“Maybe 18th out of 20,” said Chrysler’s Bob Lee, VP of Powertrain Engineering). In percentage terms, 43 percent of consumers say fuel economy is “a factor” in buying a car – up from 34 percent in 2004 (when gas was two bucks). 

“If fuel efficiency was really the driving force that I think a lot of the media make it out to be today, then we’d see somewhere in the neighborhood of two to three million Kias being sold every year,” said Scott Miller, CEO of  Synovate Motor Research. “Vehicle size, particularly in the United States, is a very important purchase consideration. . . . Fuel economy by itself is simply not a sales factor.”
 

And yet, in the name of fighting global warming, Washington pols have just decreed fuel economy the industry’s Number One priority by mandating an average fleet increase of 40 percent by 2020.

 

How to get consumers to suddenly care about fuel economy without any corresponding price change (i.e., big gas-tax hikes) vexes engineers here.

 

Sticker price (what these guys call “down-stroke costs”) is a far greater factor in a buyer’s decision than potential gas savings. “Consumers don’t do the math,” says Chrysler’s Lee. And even if they did, it would currently take 7.5 years to pay back the $2,000 premium of buying a diesel, and 11.5 years to pay back a hybrid’s premium of $5,000.

 

Only Toyota, with hybrids making up 10 percent of sales, has managed to attract customers to hybrids, despite the fact that the purchase doesn’t make economic sense (in a survey of 100 Prius buyers, for example, not a single one had calculated whether they’d make back the hybrid premium at the gas pump). Lee attributes this to Toyota’s ingenious brand marketing — a feat that other manufacturers may find difficult to emulate — and that the industry will struggle to translate into mass sales.

 

Meanwhile, automakers will have to find a way to sell high-mileage vehicles – whether or not customers want them – in order to meet the federal diktat. In the past, the solution has involved dumping them on used-car companies at a loss (not exactly a winning prospect for money-losing Big Three automakers).

 

Maybe Congressmen can buy them all.

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