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      07-07-2011, 11:35 AM   #1
mdosu
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WSJ: Fuel Law Looms Over Luxury Cars

WSJ article on government regulations and possible effects on BMWs/MB/Porsche

Mainly because it's based on average FLEET mpg, larger manufactuers like Toyota can offset it by cranking out more Toyota Corollas at a per unit loss as long as the loss margin is small.



Achtung, fans of German high performance cars: your gas-guzzling rides may get harder to come by.

Future U.S. government fuel economy regulations could saddle auto makers with steep fines or even bar the sale of certain models. Violations of proposed government standards could cost auto makers up to $25,000 a vehicle beginning in 2016, up from current levels of $5 to hundreds of dollars per vehicle.

Fleet economy standards have been in place for decades, but traditionally have assessed only nominal fines to auto makers whose cars burn more gas than the law allows. The Obama administration wants to toughen those regulations, suggesting penalties that have car companies worried, particularly German luxury-car makers.

Daimler AG's Mercedes-Benz, which paid fines of $2.9 million in 2010 for not meeting existing rules, was a vocal critic of the plan in meetings last week with White House officials, said people familiar with the talks.

"This is basically an attack on the way they do business because the things they traditionally sell are based on size and power," said Bill Visnic, an analyst for car-research firm Edmunds.com. "To do something like this is essentially putting them out of business here."

Mercedes, Porsche and Jaguar declined to comment. The EPA also declined to comment.

Auto makers have been meeting with regulators and White House officials over their plan to roughly double the corporate average fuel economy from current fleet levels to 56.2 miles a gallon by 2025. The regulations would be phased in starting with 2017 model-year vehicles.

Luxury car makers for the most part haven't developed battery technology to be able to produce high miles-per-gallon electric and hybrid vehicles.

"BMW and Mercedes aren't ready for battery technology—they have avoided the investment until now," said says Scott Painter, chief executive of car-research site TrueCar.com. "Now the American government is saying, 'You've got to go do it.'"

A key change from past rules: the Environmental Protection Agency would enforce and fine companies that don't meet standards for emissions levels, which are closely tied to fuel economy. Until this year, only the National Highway Traffic Safety Administration was involved in regulating auto makers through fuel economy rules. The EPA became involved this year; but accommodations spare companies that violate emissions regulations through 2016.

NHTSA's rules currently require a penalty if a manufacturer's fleet falls below the current 27.3 mpg level. Its fine is $5.50 for each 0.1 gallon below the rule, multiplied by the sales volume of the auto maker. In 2010, the largest fines were paid by Porsche, Jaguar Land Rover and Mercedes-Benz.

Most European manufacturers now regularly pay fines of less than $1 million a year, accepting the fines as the cost of doing business here. U.S.-based and Asian manufacturers have never paid a penalty, the agency said.

But should the tougher penalties go into effect in 2016, the rules could significantly upend the luxury market, said analysts. Bigger fines could significantly raise the cost of vehicles. And there is a chance car makers would not be able to sell in the U.S. their least-efficient models, typically large sedans or SUVs with eight-cylinder engines.

Negotiations are continuing between auto makers and regulators over the 56.2 mpg level and how the new rules will be applied. The plan floated by the White House doesn't include an extension of the accommodation for luxury car makers, which was designed to give them more time to comply with existing standards, said to people familiar with the talks.

European car makers in the past have argued that U.S. regulations are unfair. Because the rules are based on average fleet fuel economy, larger manufacturers including General Motors Co., Ford Motors Co. and Toyota Motor Corp. can offset their sales of gas-guzzlers by selling money-losing smaller cars.

Last edited by mdosu; 07-07-2011 at 03:58 PM.
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      07-07-2011, 12:09 PM   #2
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When governments regulate, individuals lose. This is just another example. On the bright side, at least this might lead to the US finally getting some more diesel options. I'm feeling a 123d, myself.
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      07-07-2011, 03:56 PM   #3
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it's extremely unfair as it's bias against sports car manufacturers. Pretty soon a M3 will cost $100k like in Europe.
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      07-08-2011, 02:02 PM   #4
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Quote:
Originally Posted by mdosu View Post
it's extremely unfair as it's bias against sports car manufacturers. Pretty soon a M3 will cost $100k like in Europe.
Not to mention the point at which you have to start paying realistic prices for fuel as well
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      07-08-2011, 06:50 PM   #5
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well i guess im keeping my m3 till the wheels fall off.
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      07-08-2011, 08:43 PM   #6
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Wait till 2012. Then depending on how the presidential election goes, this may no longer be an issue.
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      07-09-2011, 10:09 PM   #7
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Quote:
Originally Posted by Jon D View Post
Not to mention the point at which you have to start paying realistic prices for fuel as well
With all due respect fuel prices in the spot market are about $2.97 USD per gallon. Europe pay more due to gov't regulation and taxes. It the way Europe forces you to use public transportation. In the US about 1/3 of the price of gas is tax.

Your comment of realistic prices only support the argument that the gov't screw both business and individual by having transportation cost increase everything from food to the prices of goods since everything in this global economy is shipped from some place.

This is how gov't who think is all knowing screw with individual liberty by making even the simplicity of car ownership be out of the reach of most people.
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      10-05-2011, 01:44 AM   #8
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PA
Tuesday, 1 March 2011

Average petrol prices have passed the 130p a litre mark for the first time, the AA said today.

Prices at the pumps have reached an average of 130.03p a litre - only 2p away from the 6 gallon.

Diesel is now averaging 135.44p a litre, the AA said.
It added that at the start of the year, petrol averaged 125.19p a litre before hitting 127.74p following the VAT rise on January 4. Diesel started at 129.30p before reaching 132.01 after the VAT increase.

A year ago, the pump price of petrol was 112.74p and diesel 113.79p. This means that filling up a typical 50-litre petrol tank now costs 8.65 more than a year ago. A two-car family is now paying 36.71 a month more for petrol than a year ago.

And to this people retaliated by sharing a similar consent to
Punish the politicians who are vague or ignorant or who can see nothing wrong in the current and predicted price of fuel, by not voting for them and by telling all your friends not to vote for them either.

it's October and we're witnessing the worst crunch ever,..don't know what next to come..!

we need change...!
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      10-05-2011, 08:20 AM   #9
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Quote:
Originally Posted by cmk227 View Post
With all due respect fuel prices in the spot market are about $2.97 USD per gallon. Europe pay more due to gov't regulation and taxes. It the way Europe forces you to use public transportation. In the US about 1/3 of the price of gas is tax.

Your comment of realistic prices only support the argument that the gov't screw both business and individual by having transportation cost increase everything from food to the prices of goods since everything in this global economy is shipped from some place.

This is how gov't who think is all knowing screw with individual liberty by making even the simplicity of car ownership be out of the reach of most people.


Some gov't regulation is good, but whe it interferes with major aspects of your life, it needs to stop. Gov't meddling in free markets, artificially supporting prices, currency, demand, supply etc is overboard.
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      10-05-2011, 10:23 PM   #10
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Quote:
Originally Posted by mdosu View Post


Some gov't regulation is good, but whe it interferes with major aspects of your life, it needs to stop. Gov't meddling in free markets, artificially supporting prices, currency, demand, supply etc is overboard.
If the government had its way, we'd all be driving the same shit box but had good gas mileage.

If the government had its way, we'd all have a BMI of 20, LDL of 70, BP of 110/70 and work for cheap until we dropped dead.

Unreal... I'll watch these laws closely and may have to pick up an M3 before the laws come into effect.
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