[xsb00st]

By STEPHEN POWER

German luxury auto makers including BMW AG and Daimler AG's Mercedes-Benz are close to benefiting from a U.S. concession that will allow them and a few other foreign makers to keep selling cars that emit more greenhouse gases than those made by mass-market rivals such as General Motors Co. and Toyota Motor Corp.

Under a provision of a plan to curb greenhouse gas emissions, the Obama administration has proposed to set less stringent standards for car makers that sell fewer than 400,000 vehicles a year in the U.S. That target defines the major German brands as well as a few smaller Asian manufacturers such as Suzuki Motor Corp. and Mitsubishi Motors Corp.

The easier targets are expected to apply to a limited portion of a car maker's sales volume, and last for about four years -- unless the government grants an extension.

"Once companies become dependent on these provisions, they have an incentive to hire lobbyists and exert political pressure to extend those same provisions," said John Graham, who helped craft automobile fuel-economy regulations under President George W. Bush.

"The German provision" -- as it is known to industry lobbyists -- resembles a California law that effectively exempts some foreign car makers from having to meet the same emissions standards as their U.S. rivals. BMW and Daimler declined to say whether they lobbied for the provision.

In effect, the provision would make it easier for Mercedes to keep selling cars like its $147,000, 12-cylinder S600 sedan, rated at 13 miles per gallon, while GM or Toyota would be required to meet tougher mileage standards with smaller, more efficient cars.

The rules are expected to be formally proposed later this year by the Environmental Protection Agency and the Department of Transportation to enforce the administration's mandate that makers boost the average fuel efficiency of their fleets to 35.5 miles mpg by 2016.

Executives from most major car makers doing business in the U.S. backed Mr. Obama's fuel economy plan at a White House ceremony in May.

"We wanted to make sure that the entire proposal was something the industry could support," said Jody Freeman, counselor in the White House Office of Energy and Climate Change, who helped negotiate the agreement among car makers.

Between 2007 and 2008, the U.S. collected $76 million in fines from German auto makers for violating fuel-economy regulations, according to a government report published this year. The German companies say the U.S. rules are unfair, since as makers of sporty, powerful vehicles they cannot offset their most gas-guzzling models with smaller, more fuel-efficient models as easily as can high-volume car manufacturers with broader product ranges.

A spokesman for GM -- now majority-owned by the federal government -- said the Obama administration's proposal "creates fewer concerns" than California's policy because it is expected to exempt only a quarter of each qualifying auto maker's fleet, rather than all vehicles sold by those companies. It also would be in effect for only four years, compared with seven under the California program.

Other industry experts and some former government policy makers take a more critical view of the administration's plan.

David Cole, chairman of the Center for Automotive Research at the University of Michigan, said the provision would hand "a distinct competitive advantage" to German and other exempted companies that compete with the major U.S. and Japanese brands in the U.S.

Daniel Becker, director of the Washington-based Safe Climate Campaign, which advocates tougher regulation of automotive fuel economy and greenhouse-gas emissions, said BMW and Mercedes "should be required to meet the same standards as General Motors and Ford."

"Once companies become dependent on these provisions, they have an incentive to hire lobbyists and exert political pressure to extend those same provisions," said John Graham, who helped craft automobile fuel-economy regulations under President George W. Bush.

Spokespeople for Daimler and BMW said the provision would be consistent with similar regulations adopted by the European Union as well as California regulators.

Vehicles made by Mercedes and some other lower-volume manufacturers, a Daimler spokesman added, "typically are heavier due to more safety equipment and enhanced electronics that are absent from vehicles in the large-volume manufacturer segment."

A spokesman for Porsche AG said the German sports-car company "will comply with any future fuel and emission standards but cannot discuss the details on how this will affect us until we have seen the key provisions and exact language of the rules."

[skh]

http://online.wsj.com/article/SB124873997073285323.html

German luxury auto makers including BMW AG and Daimler AG's Mercedes-Benz are close to benefitting from a U.S. concession that will allow them and a few other foreign makers to keep selling cars that emit more greenhouse gases than those made by mass-market rivals such as General Motors Co. and Toyota Motor Corp.

Under a provision of a plan to curb greenhouse gas emissions, the Obama administration has proposed to set less stringent standards for car makers that sell fewer than 400,000 vehicles a year in the U.S. That target defines the major German brands as well as a few smaller Asian manufacturers such as Suzuki Motor Corp. and Mitsubishi Motors Corp.

The easier targets are expected to apply to a limited portion of a car maker's sales volume, and last for about four years -- unless the government grants an extension.

"Once companies become dependent on these provisions, they have an incentive to hire lobbyists and exert political pressure to extend those same provisions," said John Graham, who helped craft automobile fuel-economy regulations under President George W. Bush.

"The German provision" -- as it is known to industry lobbyists -- resembles a California law that effectively exempts some foreign car makers from having to meet the same emissions standards as their U.S. rivals. BMW and Daimler declined to say whether they lobbied for the provision.

In effect, the provision would make it easier for Mercedes to keep selling cars like its $147,000, 12-cylinder S600 sedan, rated at 13 miles per gallon, while GM or Toyota would be required to meet tougher mileage standards with smaller, more efficient cars.

The rules are expected to be formally proposed later this year by the Environmental Protection Agency and the Department of Transportation to enforce the administration's mandate that makers boost the average fuel efficiency of their fleets to 35.5 miles mpg by 2016.

Executives from most major car makers doing business in the U.S. backed Mr. Obama's fuel economy plan at a White House ceremony in May.

"We wanted to make sure that the entire proposal was something the industry could support," said Jody Freeman, counselor in the White House Office of Energy and Climate Change, who helped negotiate the agreement among car makers.

Between 2007 and 2008, the U.S. collected $76 million in fines from German auto makers for violating fuel-economy regulations, according to a government report published this year. The German companies say the U.S. rules are unfair, since as makers of sporty, powerful vehicles they cannot offset their most gas-guzzling models with smaller, more fuel-efficient models as easily as can high-volume car manufacturers with broader product ranges.

A spokesman for GM -- now majority-owned by the federal government -- said the Obama administration's proposal "creates fewer concerns" than California's policy because it is expected to exempt only a quarter of each qualifying auto maker's fleet, rather than all vehicles sold by those companies. It also would be in effect for only four years, compared with seven under the California program.

Other industry experts and some former government policy makers take a more critical view of the administration's plan.

David Cole, chairman of the Center for Automotive Research at the University of Michigan, said the provision would hand "a distinct competitive advantage" to German and other exempted companies that compete with the major U.S. and Japanese brands in the U.S.

Daniel Becker, director of the Washington-based Safe Climate Campaign, which advocates tougher regulation of automotive fuel economy and greenhouse-gas emissions, said BMW and Mercedes "should be required to meet the same standards as General Motors and Ford."

"Once companies become dependent on these provisions, they have an incentive to hire lobbyists and exert political pressure to extend those same provisions," said John Graham, who helped craft automobile fuel-economy regulations under President George W. Bush.

Spokespeople for Daimler and BMW said the provision would be consistent with similar regulations adopted by the European Union as well as California regulators.

Vehicles made by Mercedes and some other lower-volume manufacturers, a Daimler spokesman added, "typically are heavier due to more safety equipment and enhanced electronics that are absent from vehicles in the large-volume manufacturer segment."

A spokesman for Porsche AG said the German sports-car company "will comply with any future fuel and emission standards but cannot discuss the details on how this will affect us until we have seen the key provisions and exact language of the rules."

[jopa489]

I'm all for weight savings and turbo 4-bangers (and some smaller diesels) but this would be fantastic. Putting such a high requirement on BMW would take something away from the driving experience - and that's why we love these cars.

Similar to back in the 70s when everyone started cost cutting and using tiny engines, the cars were awful (from what I hear, not old enough to know this first hand).

I'm confident BMW R&D will make even the cheaper, less powerful, and more fuel efficient models drive like a BMW should. Maybe I'm not the greenest person on the planet, but I like cars, power, and driving.

Let the zombies sitting in the left lane doing 10 under the limit drive the super green cars - they wouldn't know the difference anyway.

[F32Fleet]

This really saves Porsche more than anything else. I'm sure this was part of some concessions we obtained from Germany regarding their involvement in our own little pet projects that we have going on in the world.

Mercedes and Porsche are already freaking out over the new EU CO2 requirements so easing the rules in their largest market (U.S.) helps take off some of the sting.

[ragingclue]

Originally Posted by Socom

This really saves Porsche more than anything else. I'm sure this was part of some concessions we obtained from Germany regarding their involvement in our own little pet projects that we have going on in the world.

Mercedes and Porsche are already freaking out over the new EU CO2 requirements so easing the rules in their largest market (U.S.) helps take off some of the sting.

I thought that Porsche was able to group its figures with VW/Audi to get around this. Is that not the case? Wasn't that Lambo's out? And Ferrari grouping with Fiat? Or is that just for European standards?

[F32Fleet]

Originally Posted by ragingclue

I thought that Porsche was able to group its figures with VW/Audi to get around this. Is that not the case? Wasn't that Lambo's out? And Ferrari grouping with Fiat? Or is that just for European standards?

I think that may have been why Porsche tried to buy VW (which IIRC is currently flipped around but deal is not done). IIRC Porsche had initially tried to get a waiver as a low volume producer (~6x,000 cars year) that number appears to have shifted somewhat judging from the OP. I read this about 2 years ago in The Economist so my numbers are probably off.

[ohaywood]

Love this.

[Indy335iCp]

And the world rejoices....

[pruettfan]

I know Maybach, Ferrari, Lamborgini and many other european companies were lobbying for this. Of course all of those cars bring luxury tax dollars so I am sure that is one of the more compelling reasons. I am sure BME will do more over the years to get better economy but my car gets 28 mpg on the freeway, seems like expecting much more is silly. I am not totally convinced that these CAFE standards will be fully implemented.

[NaTuReB0Y]

These are probably the companies that killed the electric cars..........

[AZ-BMW]

Originally Posted by skh

http://online.wsj.com/article/SB124873997073285323.html

One down, one to go: Now they need to find a way to eliminate the Gas Guzzler tax

[stickypaws]

Good.

Let us buy the big, safe, and super fast cars, everybody else buy the efficient little cars, and then quit building SUVs. Except maybe a few pickup trucks for farmers and ranchers and a couple of people who live out in the boonies and have to tow their boat 1000 miles to the nearest water.

Perfect. That's the world according to me.

[datbimmerdoe]

...what more could I say?

[NightStalker]

anyone know waht picture is that or from what post in the home page that ahite m3 looks sick

[LateBraking]

YES!

[vAnt826]

Wait, how is this going to work?

Will Lexus/Audi/Infiniti be counted with Toyota/VW/Nissan or without?

[M3_WC]

Do the treehuggers know their savior Obama is doing this this?

It will break the prius driving green freaks little hearts.

Bring on the twin turbo 12 cylinder gas eating monsters.

[Peter@VMRWheels]

Seems that BMW can easily find some ways to comply with the MPG requirement... such as changing the hp/torque curve, or creating a more defined "Sport" vs "Regular" mode like the one found on the M5. Or they can seriously detune the motors to leave the dirty work to chip tuners . There are lots of things one can do to manipulate MPG especially on a turbo car!

Lets hope our gov't does not implement a tax based on the engine size.. These laws are crazy in Europe & Asia. I think this would be catastrophic!

[Big Windy]

Originally Posted by Socom

I think that may have been why Porsche tried to buy VW (which IIRC is currently flipped around but deal is not done). IIRC Porsche had initially tried to get a waiver as a low volume producer (~6x,000 cars year) that number appears to have shifted somewhat judging from the OP. I read this about 2 years ago in The Economist so my numbers are probably off.

You are dead on. The deal failed (and the CEO and CFO are losing their jobs because of it), but it was targeted at acquiring VW for the sake of fuel and emissions regulations. If Porsche could lump their vehicles under the massive VW umbrella, they would be essentially be shielded from future laws and regulations.

[The Cthulhu]

efficient engine R&D and weight reduction are good things

[iPhil]

Originally Posted by Romiie

anyone know waht picture is that or from what post in the home page that ahite m3 looks sick

HERE:
http://www.m3post.com/forums/showthread.php?t=279471

[Imola.ZHP]

Makes perfect sense to me, and I agree with the decision. Average of 35.5mpg would force BMW to sell higher MPG cars almost against their own will. Toyota, on the other hand, loves selling high MPG cars...