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Washington Watch

Think Gas Prices Are Leading to Higher Fuel Economy? Think Again!

Little Change Since 1980s, EPA Finds

Why Is Auto Industry Enabling the Oil Industry?

Based on reports by The Washington Post and others.

On June 27th, the Envrionmental Protectation Agency once again announced that automakers have made no progress in improving vehicle fuel economy over the past year. This now extends the industry's record of failure to 24 years.

The industry-wide fuel economy of 2006 model-year vehicles was 21 miles per gallon, the same as the year-ago level. Certainly to no surprise of Kicking Asphalt readers, Detroit automakers trailed their Japanese, Korean and European counterparts.

Honda Motor Co. continued to rank at the top of the list with the best fuel economy, an EPA-estimated 24.2 miles per gallon. Toyota Motor Corp. was No. 2, with 23.8 miles per gallon. Volkswagen AG and Hyundai Motor Co.'s Kia and Hyundai brands tied for third at 23.5 miles per gallon.

While Detroit automakers lagged behind their competitors, General Motors Corp. had the best showing of the Big Three, with 20.5 miles per gallon, followed by Ford Motor Co., at 19.7 miles per gallon, moving it up one slot from last place a year ago. DaimlerChrysler AG, which includes the Mercedes division and the Chrysler brands, was at the bottom of the list, with fuel economy of 19.1 miles per gallon.

The EPA said its study found the 2006 model-year vehicles to be the heaviest, fastest and most powerful vehicles than in any year since the agency began collecting data. Disappointingly, even the Japanese manufacturers have started to emphasize power over fuel economy.

Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which represents many of the automakers, told The Washington Post that the industry is building more vehicles with fuel-saving technology, but consumers are still buying heavier, faster vehicles in large numbers.

"The fuel-efficient models are out there, we just need to sell more," she said. "We are trying very hard."

Fuel economy made rapid increases in the mid-1970s and in the 1980s. The 1982 level was 21.1 miles per gallon, almost exactly today's level. The U.S. government began pressing for improvements in fuel-economy rules after the oil shocks of the early 1970s. Mileage for the industry peaked in 1987 and 1988, when the EPA estimated vehicle fuel economy was 22.1 miles per gallon. But industry economy levels gradually declined during the 1990s, as large, gas-hungry sport-utility vehicles rose in popularity.

The report's fuel-economy measurements were based on laboratory data which is now adjusted downward by about 15 percent to better represent real-world driving conditions. The data are equivalent to the estimates provided to consumers on new-vehicle labels.

So far this year, lawmakers have rejected attempts to offer legislation to increase the government's fuel-economy rules. In a speech in Washington today, James E. Press, chief executive of Toyota's U.S. division, is expected to reiterate his company's pledge to build more fuel-efficient models, including a goal to sell 1 million hybrid models annually worldwide by 2010.

Last month, Ford dropped a pledge to build 250,000 hybrid models annually by 2010, saying it will expand into other fuel-saving technologies, such as ethanol, a fuel made from corn or potentially from other agricultural products.

The EPA, in its report, said recent technological developments such as improved transmission and engine designs, clean diesel technology and hybrid vehicles hold promise for improving fuel economy in the near future.

As gas prices climb, U.S. car buyers are steadily moving to smaller cars and trucks. This shift caught some automakers off guard, particularly those in Detroit. The U.S. automakers rely heavily on big vehicles for profits and are suffering as that market has contracted.