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40 Is the New 30, As Automakers Ramp Up MPGs Across the Line

By Jim Motavalli
CBS Business Network
Carmakers, boxed in by regulation and rising prices at the pump, are finally going where they should have gone a long time ago by squeezing serious fuel economy out of the internal-combustion engine. The result is a growing number of cars that reach 40 mpg on the highway. These days, 40 mpg is the new 30

Carmakers, boxed in by regulation and rising prices at the pump, are finally going where they should have gone a long time ago by squeezing serious fuel economy out of the internal-combustion engine. The result is a growing number of cars that reach 40 mpg on the highway. These days, 40 mpg is the new 30.

After decades of not giving a hoot about gas mileage, just about every automaker has a 40-mpg car or is planning to introduce one. Engines are downsizing and engineers are pushing aerodynamics, light-weighting, highly efficient transmissions, start-stop and other technology to shave off a few mpg.

Mark Fields, Ford’s president of the Americas, was at the New York Auto Show to introduce the all-new Taurus, but before he got to that he had something else on his mind: fuel economy. “We lead in 12 market segments,” he said. Four Fords achieve 40 mpg on highway driving.

Of course, Ford still sells a lot of big trucks, too, and until recently the automaker saw fuel economy as an afterthought — at best. But Ford is finally back in the small car business with the Fiesta and Focus. Its secret sauce for these cars is turbocharged small engines, and the Taurus will come with two different EcoBoost options as alternatives to the standard V-6. Under Alan Mullaly, Ford is quickly become the leader among the Big Three — admittedly not that hard, because GM and Chrysler are only now getting it on fuel economy.

Other automakers offered variations on the theme. Mazda said at the show that it’s using some of the same technology as Ford to ramp the next Mazda3 from 33 mpg to what Robert Davis, a senior vice president, called “the magic 40 mpg number.”

Cooling down the horsepower race

Mark Cooper, director of research at the Consumer Federation of America, visits the auto show every year for a fuel economy report card. He likes the trend:

This year the average car has 5.5 cylinders. If you predicted that just last year, people would have thought you were crazy. The new Malibu is coming out, and you can’t even get it with a six-cylinder engine.

The new frugal cars, such as the Honda Civic HF (41 mpg highway) revealed at the show, don’t ask their buyers to compromise, because in most cases there’s no horsepower loss. The smaller engines are coupled to turbos or hybrid drivetrains. The engineers are getting so much efficiency out of the tried-and-true internal-combustion engine that you have to ask why they didn’t do it years ago. But until recently fuel economy was very low on the auto buyer’s list of priorities, and so the companies didn’t much care, either. Now they do.

Regulation is a driver

Existing federal regulations require cars to reach 35.5 mpg by 2016, and California is also specifying quotas for clean cars. If Cooper and other greens have their way, the federal standards would ramp up to 60 mpg by 2025 — a six percent annual increase from 2017 on.

Automakers are likely to balk at that (their opening gambit is an increase to only 40 mpg).  They’re committed to improving the fuel economy of their cars, but they hate being told how far they have to go and when they have to get there. I have a certain sympathy for their position, because 60 mpg would be a really dramatic ramp-up. But they’ve already shown they can get to 40 mpg easily, and 50 wouldn’t be too big a deal. They’ve got 15 years to get there.

Unless the EPA loses its right to set fuel economy standards (not likely at this stage), a compromise probably will put the 2027 target at that 50 mpg point. So 40 mpg now gets them ready for 50 mpg then.

Carol Lee Rawn, a senior manager for transportation programs at the green corporate watchdog group Ceres, was also at the auto show checking out the new models. She’s among those pushing for a 60-mpg goal:

The Auto Alliance had a study done saying it couldn’t afford such a steep increase in the standards. But our research shows that the companies could actually end up with increased profits with better fuel economy.

There’s some logic there, because in an era of $5 a gallon gas consumers are going to opt for the high-mileage cars they once ignored. If those cars are only available from import brands, that’s where the sales are going to go.

A joint study by Ceres and Citi Investment Research released in March claimed that 60 mpg by 2027 is technically feasible, and would result in a 12 percent increase in variable annual profit for the Big Three.

In a recent column on the introduction of the Chevy Malibu, I urged General Motors to produce a green version comparable to the Cruze Eco, which uses a lot of the engineers’ tricks listed above to achieve 42 mpg on the highway. Guess what? GM listened to me, and debuted the Malibu Eco in New York, a cousin to the Cruze that will achieve an estimated 38 mpg on the highway. Like that new Taurus (31 mpg on the highway), it owes part of its achievement to active grille shutters (which shut down to improve aerodynamics.

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