Automotive Fuel Economy Program Report to Congress

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

Automotive Fuel Economy Program Report to Congress

The attached document, Automotive Fuel Economy Program, Nineteenth

Annual Report to the Congress, was prepared pursuant to 49 U.S.C. 32916

which requires in pertinent part that ``the Secretary shall submit to

each House of Congress, and publish in the Federal Register, a review

of average fuel economy standards under this part.''

[[Page 16903]] Issued: March 20, 1995.

Barry Felrice,

Associate Administrator for Safety Performance Standards.

Automotive Fuel Economy Program

Nineteenth Annual Report to Congress

Calendar Year 1994

Table of Contents

Section I: Introduction

Section II: Fuel Economy Improvement by Manufacturers

Section III: 1994 Activities

A. Passenger Car CAFE Standards

B. Light Truck CAFE Standards

C. Low Volume Petitions

D. Enforcement

E. Partnership for a New Generation of Vehicles

F. Advisory Committee on Personal Motor Vehicle Greenhouse Gas

Reductions

G. General Agreement on Tariffs and Trade (GATT) Decision

Section IV: Use of Advanced Technology

A. New Models

B. Engine and Transmission Technology

C. Electronics

D. Materials

E. Summary

Section I: Introduction

The Nineteenth Annual Report to Congress on Automotive Fuel

Economy Program summarizes the activities of the National Highway

Traffic Safety Administration (NHTSA) during 1994, in accordance

with 49 U.S.C. 32916 et seq., which requires the submission of a

report each year. Included in this report are sections summarizing

rulemaking activities during 1994 and a discussion of the use of

advanced automotive technology by the industry as required by

section 305, Title III, of the Department of Energy Act of 1978

(Pub. L. 95-238).

The Secretary of Transportation is required to administer a

program for regulating the fuel economy of new passenger cars and

light trucks in the United States market. The authority to

administer the program was delegated by the Secretary to the

Administrator of NHTSA, 49 CFR 1.50(f).

NHTSA's responsibilities in the fuel economy area include:

(1) Establishing and amending average fuel economy standards for

manufacturers of passenger cars and light trucks, as necessary;

(2) Promulgating regulations concerning procedures, definitions,

and reports necessary to support the fuel economy standards;

(3) Considering petitions for exemption from established fuel

economy standards by low volume manufacturers (those producing fewer

than 10,000 passenger cars annually worldwide) and establishing

alternative standards for them;

(4) Preparing reports to Congress annually on the fuel economy

program;

(5) Enforcing fuel economy standards and regulations; and

(6) Responding to petitions concerning domestic production by

foreign manufacturers and other matters.

Passenger car fuel economy standards were established by

Congress for Model Year (MY) 1985 and thereafter at a level of 27.5

miles per gallon (mpg). NHTSA is authorized to amend the standard

above or below that level. Standards for light trucks were

established by NHTSA for MYs 1979 through 1997. NHTSA set a combined

standard of 20.7 mpg for light truck fuel economy standard for MYs

1996 and 1997. All current standards are listed in Table I-1.

Table I-1.--Fuel Economy Standards for Passenger Cars and Light Trucks

Model Years 1978 through 1997 (in MPG)

------------------------------------------------------------------------

Light trucks\1\

Passenger -----------------------------------------

Model year cars Two-wheel Four-wheel

drive drive Combined\2\\3\

------------------------------------------------------------------------

1978............. \4\18.0

1979............. \4\19.0 17.2 15.8

1980............. \4\20.0 16.0 14.0 \5\

1981............. 22.0 \6\16.7 15.0 \5\

1982............. 24.0 18.0 16.0 17.5

1983............. 26.0 19.5 17.5 19.0

1984............. 27.0 20.3 18.5 20.0

1985............. \4\27.5 \7\19.7 \7\18.9 \7\19.5

1986............. \8\26.0 20.5 19.5 20.0

1987............. \9\26.0 21.0 19.5 20.5

1988............. \9\26.0 21.0 19.5 20.5

1989............. \10\26.5 21.5 19.0 20.5

1990............. \4\27.5 20.5 19.0 20.0

1991............. \4\27.5 20.7 19.1 20.2

1992............. \4\27.5 20.2

1993............. \4\27.5 20.4

1994............. \4\27.5 20.5

1995............. \4\27.5 20.6

1996............. \4\27.5 20.7

1997............. \4\27.5 20.7

------------------------------------------------------------------------

\1\Standards for MY 1979 light trucks were established for vehicles with

a gross vehicle weight rating (GVWR) of 6,000 pounds or less.

Standards for MY 1980 and beyond are for light trucks with a GVWR of

8,500 pounds or less.

\2\For MY 1979, light truck manufacturers could comply separately with

standards for four-wheel drive, general utility vehicles and all other

light trucks, or combine their trucks into a single fleet and comply

with the 17.2 mpg standard.

\3\For MYs 1982-1991, manufacturers could comply with the two-wheel and

four-wheel drive standards or could combine all light trucks and

comply with the combined standard.

\4\Established by Congress in Title V of the Act.

\5\A manufacturer whose light truck fleet was powered exclusively by

basic engines which were not also used in passenger cars could meet

standards of 14 mpg and 14.5 mpg in MYs 1980 and 1981, respectively.

\6\Revised in June 1979 from 18.0 mpg.

\7\Revised in October 1984 from 21.6 mpg for two-wheel drive, 19.0 mpg

for four-wheel drive, and 21.0 mpg for combined.

\8\Revised in October 1985 from 27.5 mpg.

\9\Revised in October 1986 from 27.5 mpg.

\10\Revised in September 1988 from 27.5 mpg.

[[Page 16904]]

Section II: Fuel Economy Improvement by Manufacturers

The fuel economy achievements for domestic and foreign

manufacturers in MY 1993 were updated to include final Environmental

Protection Agency (EPA) calculations, where available, since the

publication of the Eighteenth Annual Report to the Congress. These

fuel economy achievements and current projected data for MY 1994 are

listed in Tables II-1 and II-2.

Overall fleet fuel economy for passenger cars was 28.2 mpg in MY

1994, a decline of 0.2 mpg from the MY 1993 level. For MY 1994, CAFE

values decreased below MY 1993 levels for 14 of 22 passenger car

manufacturers' fleets. (See Table II-1). These 14 companies

accounted for over 44 percent of the total MY 1994 production.

Manufacturers continued to introduce new technologies and more fuel-

efficient models, as well as some larger, less fuel-efficient

models. For MY 1994, the overall domestic manufacturers' fleet

average fuel economy was 27.3 mpg. For MY 1994, Chrysler, Ford, and

Mazda domestic passenger car CAFE values fell 1.6 mpg, 0.7 mpg, and

0.6 mpg, respectively, from their 1993 levels, while GM remained at

its MY 1993 level. Overall, the domestic manufacturers' combined

CAFE declined 0.5 mpg below MY 1993 levels.

Table II-1.--Passenger Car Fuel Economy Performance by Manufacturer*

[Model Years 1993 and 1994]

------------------------------------------------------------------------

Model year cafe

(mpg)

Manufacturer -----------------

1993 1994

------------------------------------------------------------------------

Domestic:

Chrysler.......................................... 27.8 26.2

Ford.............................................. 28.3 27.6

GM................................................ 27.4 27.4

Mazda............................................. 29.7 29.1

Sales weighted average (domestic)............... 27.8 27.3

Imported:

BMW............................................... 25.2 25.1

Chrysler Imports.................................. 31.0 31.3

Fiat.............................................. 23.9 19.8

Ford Imports...................................... 26.7 25.7

GM Imports........................................ 30.5 24.6

Honda............................................. 32.5 32.5

Hyundai........................................... 31.3 32.5

Isuzu............................................. 33.0 .......

Kia............................................... 31.7 30.8

Mazda............................................. 31.0 31.2

Mercedes-Benz..................................... 22.9 23.8

Mitsubishi........................................ 29.4 28.9

Nissan............................................ 29.4 29.7

Porsche........................................... 22.5 22.0

Subaru............................................ 29.3 28.3

Suzuki............................................ 46.4 43.8

Toyota............................................ 29.1 29.0

Volvo............................................. 25.9 25.7

VW................................................ 27.2 28.1

Sales weighted average (imported)............... 29.6 29.6

Total fleet average........................... 28.4 28.2

Fuel economy standards........................ 27.5 27.5

------------------------------------------------------------------------

*Manufacturers or importers of fewer than 1,000 passenger cars annually

are not listed.

Note: Some MY 1993 CAFE values differ from those used in the Eighteenth

Annual Report to the Congress due to the use of final EPA

calculations.

In MY 1994, the fleet average fuel economy for imported

passenger cars remained at the MY 1993 CAFE level. Import CAFE was

29.6 mpg in MY 1994. Eleven of the 19 imported car manufacturers

decreased their CAFE values between MYs 1993 and 1994, including 5

of the 9 Asian importers. Figure II-1 illustrates the changes in

total new passenger car fleet CAFE from MY 1978 to MY 1994.

The total light truck fleet CAFE decreased 0.3 mpg below the MY

1993 CAFE level of 20.9 mpg. Figure II-2 illustrates the trends in

total fleet CAFE from MY 1979 to MY 1994 for light trucks.

A number of passenger car and a few light truck manufacturers

are projected to fail to achieve the levels of the MY 1994 CAFE

standards. However, NHTSA is not yet able to determine which of

these manufacturers may be liable for civil penalties for

noncompliance. Some MY 1994 CAFE values may change when final

figures are provided to NHTSA by EPA, in mid-1995. In addition,

several manufacturers are not expected to pay civil penalties

because the credits they earned by exceeding the fuel economy

standards in earlier years offset later shortfalls. Other

manufacturers may file carryback plans to demonstrate that they

anticipate earning credits in future model years to offset current

deficits.

[[Page 16905]]

Table II-2.--Light Truck Fuel Economy Performance by Manufacturer

[Model years 1993 and 1994]

------------------------------------------------------------------------

Model year cafe

(mpg)

-----------------

Manufacturer Combined

-----------------

1993 1994

------------------------------------------------------------------------

Captive Import:

Chrysler Imports.................................. 24.3 .......

Others:

Chrysler.......................................... 21.2 20.5

Ford.............................................. 20.9 20.8

GM................................................ 19.8 19.9

Isuzu............................................. 21.8 20.8

Mazda............................................. 23.6 21.2

Mitsubishi........................................ 21.3 22.0

Nissan............................................ 23.7 22.5

PAS............................................... 18.5 .......

Land Rover........................................ 15.5 16.4

Subaru............................................ 29.1 29.6

Suzuki............................................ 28.9 28.5

Toyota............................................ 22.3 22.0

UMC............................................... 18.8 18.5

VW................................................ 21.0 21.0

-----------------

Total fleet average............................. 20.9 20.6

Fuel economy standard........................... 20.4 20.5

------------------------------------------------------------------------

Note: Some MY 1993 CAFE values differ from those used in the Eighteenth

Annual Report to the Congress due to the use of final EPA

calculations.

Fleet average fuel economy for all MY 1994 passenger cars

combined and for all light trucks combined exceeded the levels of

the MY 1994 standards.

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[[Page 16908]] Isuzu terminated sales of its passenger cars in

the United States after MY 1993; however, the manufacturer continues

to sell its light trucks. Isuzu accumulated substantial CAFE credits

during its 13-year marketing span of its passenger cars in the

United States, but these vehicles sales reached such a low level

that it apparently decided it was economically infeasible for their

passenger cars to remain.

The characteristics of the MY 1994 passenger car fleet reflect a

continuing trend toward increased consumer demand for higher

performance cars. (See Table II-3.) From MY 1993 to MY 1994,

horsepower/100 pounds, a measure of vehicle performance, increased

from 4.56 to 4.79 for domestic passenger cars. However, it decreased

slightly from 4.72 to 4.71 for imported passenger cars. The total

fleet average for passenger cars increased from 4.62 in MY 1993 to

4.76 horsepower/100 pounds in MY 1994, the highest level in the 38

years for which the agency has data. Compared to MY 1993, the

average curb weight for MY 1994 increased 52 pounds for the domestic

fleet and 23 pounds for the imported fleet. The total new passenger

car fleet is 41 pounds heavier than it was in MY 1993, primarily

because of the larger share held by the domestic fleet. Average

engine displacement increased from 184 to 188 cubic inches for

domestic passenger cars and 136 to 137 cubic inches for imported

passenger cars.

The 0.5 mpg fuel economy reduction for the MY 1994 domestic

passenger car fleet may be attributed to increases in performance

and average curb weight. Some of the weight increase reflects

increased applications of safety features such as airbags, improved

side impact protection, and antilock braking systems.

The size class breakdown shows an increased trend towards

subcompact, compact, and large passenger cars and a decrease in two-

seater, minicompact, and midsize passenger cars for the overall

fleet. The domestic fleet shift is from midsize passenger cars to

subcompact, compact, and large passenger cars. The shift of imported

cars to compact size is particularly pronounced; compact cars

increased to 41.6 percent of the imported fleet in MY 1994 from just

36.6 percent in MY 1993. The imported share of the passenger car

market declined slightly in MY 1994. However, for the fifth

consecutive year, imports exceeded 40 percent of the new passenger

car fleet.

The domestic fleet had a dramatic decrease in share of

turbocharged and supercharged engines. Diesel engines declined in

share after a small increase in MY 1993. Diesel engines were offered

only on certain Mercedes models during MY 1994.

Table II-3.--Passenger Car Fleet Characteristics for MYs 1993 and 1994

----------------------------------------------------------------------------------------------------------------

Total fleet Domestic fleet Imported fleet

Characteristics -----------------------------------------------------

1993 1994 1993 1994 1993 1994

----------------------------------------------------------------------------------------------------------------

Fleet average fuel economy, mpg....................... 28.4 28.2 27.8 27.3 29.6 29.6

Fleet average curb weight, lbs........................ 2971 3012 3046 3098 2861 2884

Fleet average engine displacement, cu. in............. 164 167 184 188 136 137

Fleet average horsepower/weight ratio, hp/100 lbs..... 4.62 4.76 4.56 4.79 4.72 4.71

Percent of fleet...................................... 100 100 59.4 59.8 40.6 40.2

Segmentation by EPA size class, Percent:

Two-seater............................................ 1.4 1.2 0.5 0.5 2.8 2.1

Minicompact........................................... 1.0 0.3 0.0 0.0 2.4 0.7

Subcompact*........................................... 23.0 23.4 14.4 17.0 35.4 32.8

Compact*.............................................. 33.7 36.0 31.7 32.2 36.6 41.6

Mid-size*............................................. 29.4 25.6 37.8 31.2 17.2 17.3

Large*................................................ 11.5 13.6 15.6 19.1 5.6 5.5

Percent diesel engines................................ 0.04 0.01 0.0 0.0 0.9 0.02

Percent turbo or supercharged engines................. 1.1 0.9 0.5 0.4 1.9 1.7

Percent fuel injection................................ 100 100 100 100 100 100

Percent front-wheel drive............................. 84.4 83.9 86.0 83.6 82.1 84.4

Percent automatic transmissions....................... 79.9 81.7 87.4 87.8 69.1 72.6

Percent automatic transmissions with lockup clutches.. 93.1 94.9 93.3 94.8 92.6 95.0

Percent automatic transmissions with four or more forward

speeds 77.2 84.7 69.2 79.8 91.9 92.4

----------------------------------------------------------------------------------------------------------------

*Includes associated station wagons.

Passenger car fleet average characteristics have changed

significantly since MY 1978 (the first year of fuel economy

standards). After substantial initial weight loss (from MY 1978 to

MY 1982, the average passenger car fleet curb weight decreased from

3,349 to 2,808 pounds), the passenger car fleet average curb weight

stabilized around 2,800 pounds from MY 1982 to MY 1987, but has

risen to approximately 3,000 pounds since then. Table II-4 shows

that the MY 1994 passenger car fleet has nearly equal interior

volume and higher performance, but with over 40 percent better fuel

economy than the MY 1978 fleet. (See Figure II-3)

The characteristics of the MY 1994 light truck fleet are shown

in Table II-5. Since light truck manufacturers are not required the

divide their fleets into domestic and import fleets based on the 75-

percent domestic content threshold used for passenger car fleets,

the domestic and imported fleet characteristics in Table II-5 are

estimated, based mainly on manufacturer name. The agency assumed

that all products of foreign-based manufacturers would not meet the

domestic content threshold, whether they were assembled in the

United States of Canada, or in another country. The exception to

this is the assumption that the import-badged products of a domestic

manufacturer's assembly plant were ``domestic'' (Mazda Navajo and

pickup and Nissan Quest).

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Table II-4.--New Passenger Car Fleet Average Characteristics

[Model years 1978-1993]

----------------------------------------------------------------------------------------------------------------

Fuel Interior Hosrepower/

Model year economy Curb weight space (cu. Engine size weight (hp/

(mpg) (lb.) ft.) (cu. in.) 100 lb.)

----------------------------------------------------------------------------------------------------------------

1978........................................... 19.9 3349 112 260 3.68

1979........................................... 20.3 3180 110 238 3.72

1980........................................... 24.3 2867 105 187 3.51

1981........................................... 25.9 2883 108 182 3.43

1982........................................... 26.6 2808 107 173 3.47

1983........................................... 26.4 2908 109 182 3.57

1984........................................... 26.9 2878 108 178 3.66

1985........................................... 27.6 2867 108 177 3.84

1986........................................... 28.2 2821 106 169 3.89

1987........................................... 28.5 2805 109 162 3.98

1988........................................... 28.8 2831 107 161 4.11

1989........................................... 28.4 2879 109 163 4.24

1990........................................... 28.0 2908 108 163 4.53

1991........................................... 28.3 2934 108 164 4.42

1992........................................... 27.8 3007 108 169 4.56

1993........................................... 28.4 2971 109 164 4.62

1994........................................... 28.2 3012 108 167 4.76

----------------------------------------------------------------------------------------------------------------

Table II-5.--Light Truck Fleet Characteristics for MYs 1993 and 1994

----------------------------------------------------------------------------------------------------------------

Total fleet Domestic fleet Imported fleet

Characteristics -----------------------------------------------------

1993 1994 1993 1994 1993 1994

----------------------------------------------------------------------------------------------------------------

Fleet average fuel economy, mpg........................... 20.9 20.6 20.6 20.4 22.7 22.0

Fleet average equivalent test weight, lbs................. 4,201 4,274 4,284 4,340 3,727 3,832

Fleet average engine displacement, cu. in................. 237 243 249 255 167 165

Fleet average horsepower/weight ratio, hp/100 lbs......... 3.89 3.86 3.97 3.89 3.47 3.65

Percent of fleet.......................................... 100 100 85.1 87.0 14.9 13.0

Segmentation by type, percent:

Passenger van:

Compact............................................. 23.6 17.0 25.8 18.6 11.1 6.3

Large............................................... 0.3 0.5 0.4 0.6

Cargo van:

Compact............................................. 1.4 1.5 1.6 1.7

Large............................................... 4.7 4.7 5.6 5.4

Small pickup*......................................... 7.9 6.2 6.6 5.3 15.2 12.2

Large pickup*......................................... 34.3 40.0 33.4 40.5 39.8 36.8

Special purpose....................................... 27.8 30.0 26.7 27.8 33.9 44.7

Percent diesel engines................................ 0.07 0.30 0.09 0.30

Percent fuel injection................................ 99.0 99.7 100 100 93.0 97.7

Percent automatic transmissions....................... 76.2 77.3 82.5 82.5 39.9 45.7

Percent automatic transmissions with lockup clutches.. 98.6 98.3 99.1 98.5 92.3 94.0

Percent automatic transmissions with four forward

speeds............................................... 90.5 92.1 89.9 91.6 97.1 98.9

Percent 4-wheel drive................................. 33.7 36.1 32.3 34.1 41.2 49.5

----------------------------------------------------------------------------------------------------------------

*Including cab chassis.

The average test weight of the total light truck fleet increased

by 73 pounds over that for MY 1993. Increased popularity of large

pickups, special purpose vehicles, heavier, and higher performance

trucks contributed to a 0.3 mpg fleet fuel economy decline for MY

1994, offsetting the small increase in the use of fuel injection and

automatic transmissions with four forward speeds. Diesel engine

usage increased in light truck to 0.30 percent in MY 1994 from 0.07

percent in MY 1993. The imported share of the MY 1994 light truck

fleet decreased to 13.0 percent, 1.9 percent lower than MY 1993 and

the lowest share since light truck fuel economy standards were

established.

During MYs 1980 through 1994, CAFE levels for light trucks in

the 0-8,500 pounds gross vehicle weight (GVW) class increased,

beginning at 18.5 mpg in MY 1980 and reaching 21.7 mpg in MY 1987

before dropping to lower values in MY 1988 through MY 1994, as

average weight, engine size, and performance increased. During these

years, light truck production increased from 1.9 million in MY 1980

to 4.7 million in MY 1994. Light trucks comprised 40 percent of the

total light duty vehicle fleet production in MY 1994, more than

double its share in MY 1980.

Figure II-4 illustrates that the light duty fleet (passenger

cars and light trucks together) average fuel economy steadily

increased to MY 1987, but subsequently has been below the MY 1987

level. (See Table II-6). Light truck average fuel economy declined,

but the passenger car average fuel economy remained relatively

constant for MYs 1987-1994. Thus, the overall decline illustrates

the growing influence of light trucks in the light duty fleet.

While both passenger car and light truck fleet fuel economies

decreased from MY 1993 to MY 1994 by 0.2 mpg and 0.3 mpg,

respectively, the total fleet fuel economy for MY 1994 decreased 0.5

mpg over the MY 1993 level (25.1 mpg for MY 1993 and 24.6 mpg for MY

1994). This is attributed to increased sales of light trucks, since

the total light truck fleet fuel economy is far less than that of

passenger cars. The shift to light trucks for general transportation

is an important trend in consumers' preference and has a significant

fleet fuel consumption effect.

Domestic and imported passenger car fleet average fuel economies

have improved since [[Page 16911]] MY 1978, although the increase is

far more dramatic for the domestic fleet. In MY 1994, the domestic

passenger car fleet average fuel economy decreased from the prior

year to 27.3 mpg, and imported passenger car fleet average fuel

economy remained at 29.6 mpg. Compared to MY 1978, this reflects an

increase of 8.6 mpg for domestic cars. For imported cars, the MY

1994 average fuel economy is only 2.3 mpg higher than that of MY

1978.

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Table II-6.--Domestic and Imported Passenger Car and Light Truck Fuel Economy Averages for Model Years 1978-1994

[In MPG]

----------------------------------------------------------------------------------------------------------------

Domestic Imported

-------------------------------------------------------- Total

Model year Light Light fleet

Car truck Combined Car truck Combined

----------------------------------------------------------------------------------------------------------------

1978........................................... 18.7 27.3

1979........................................... 19.3 17.7 19.1 26.1 20.8 25.5 20.1

1980........................................... 22.6 16.8 21.4 29.6 24.3 28.6 23.1

1981........................................... 24.2 18.3 22.9 31.5 27.4 30.7 24.6

1982........................................... 25.0 19.2 23.5 31.1 27.0 30.4 25.0

1983........................................... 24.4 19.6 23.0 32.4 27.1 31.5 24.8

1984........................................... 25.5 19.3 23.6 32.0 26.7 30.6 25.0

1985........................................... 26.3 19.6 24.0 31.5 26.5 30.3 25.4

1986........................................... 26.9 20.0 24.4 31.6 25.9 29.8 25.9

1987........................................... 27.0 20.5 24.6 31.2 25.2 29.6 26.2

1988........................................... 27.4 20.6 24.5 31.5 24.6 30.0 26.0

1989........................................... 27.2 20.4 24.2 30.8 23.5 29.2 25.6

1990........................................... 26.9 20.3 23.9 29.9 23.0 28.5 25.4

1991........................................... 27.3 20.9 24.4 30.0 23.0 28.4 25.6

1992........................................... 27.0 20.5 23.8 29.1 22.6 27.8 25.0

1993........................................... 27.8 20.6 24.2 29.6 22.7 28.0 25.1

1994........................................... 27.3 20.4 23.5 29.6 22.0 27.8 24.6

----------------------------------------------------------------------------------------------------------------

Since MY 1980, the total light truck fleet average fuel economy

and the average for domestic manufacturers have improved. However,

the imported light truck average fuel economy has decreased

significantly. The domestic manufacturers continued to dominate the

light truck market. Domestic light trucks comprised 87.0 percent of

the total light truck fleet. For MY 1994, the domestic light truck

fleet has an average fuel economy 1.6 mpg lower than the imported

light truck fleet. The imported light truck fleet fuel economy

improved substantially up to MY 1981, but has been declining

steadily since then. For MY 1994, the imported light truck fleet

fuel economy decreased 0.7 mpg below MY 1993 to 22.0 mpg.

The gap between the average CAFEs of the imported and domestic

manufacturers is smaller than in earlier years as domestic

manufacturers maintain relatively stable CAFE values while the

import manufacturers move to larger, higher performance vehicles and

more 4-wheel drive light trucks.

Section III: 1994 Activities

A. Passenger Car CAFE Standards

The following synopsis describes recent litigation challenging

NHTSA actions under the CAFE program.

Competitive Enterprise Institute v. NHTSA, D.C. Cir., No. 93-

1210

This case challenges NHTSA's January 15, 1993, decision (D.C.

Circuit's remand in Case No. 89-1422) to again terminate the

rulemaking it commenced to consider amending the MY 1990 passenger

car CAFE standard. The petition for review was filed on March 15,

1993. Briefs were filed between February and April 1994, and oral

argument was held on May 16, 1994. To date, the Court has not issued

a decision.

B. Light Truck CAFE Standards

NHTSA published a final rule establishing the MYs 1996 and 1997

light truck fuel economy standards on April 6, 1994, (59 FR 16312).

The agency set a combined standard of 20.7 mpg for MYs 1996 and

1997.

In the final rule for MYs 1996 and 1997 light trucks, the agency

determined that GM is the ``least capable'' manufacturer with a

combined fuel economy capability of 20.7 mpg. The agency concluded

upon balancing the relevant statutory factors, that the relatively

small and uncertain energy savings that would be associated with

setting a standard above GM's capability would not justify the

economic harm to the company and the economy as a whole. The agency

projected that GM could not achieve a combined fuel economy level

higher than 20.7 mpg for MYs 1966 and 1997. In contrast, NHTSA

concluded that Chrysler and Ford can achieve CAFE levels somewhat

above 20.7 mpg.

The agency selected 20.7 mpg for MYs 1996 and 1997 as the final

combined standards because these values balance the potentially

serious adverse economic consequences associated with market and

technological risks for GM to further increase its fuel economy

levels. Since GM produces more than 30 percent of all light trucks

that are subject to the fuel economy standards, its capability

significantly affects the industry's capability and, therefore, the

level of the standard.

The agency issued an advance notice of proposed rulemaking for

Light Truck Average Fuel Economy Standards for MYs 1998-2006 (59 FR

16324; April 6, 1994). The agency sought information that would help

to assess the extent to which manufacturers can improve light truck

fuel economy, the benefits and costs to consumers of improved fuel

economy, the benefits to the Nation of reducing fuel consumption,

and the number of model years that should be covered by the

proposal.

C. Low Volume Petitions

Article 49 U.S.C. 32902 (d) provides that a low volume

manufacturer of passenger cars may be exempted from the generally

applicable passenger car fuel economy standards if these standards

are more stringent than the maximum feasible average fuel economy

for that manufacturer and if NHTSA establishes an alternative

standard for that manufacturer at its maximum feasible level. A low

volume manufacturer is one that manufactured fewer than 10,000

passenger cars worldwide, in the model year for which the exemption

is sought (the affected model year) and in the second model year

preceding that model year.

The agency acted on two low volume petitions in 1994, which were

filed by Bugatti International Holding, SA (Bugatti International)

and MedNet, Inc.

Bugatti International filed a joint low volume petition for

Bugatti and Lotus high performance vehicles. Bugatti International

requested alternative standards for its passenger cars for MYs 1994,

1995 and 1996. Another petitioner, MedNet, Inc., requested an

alternative standard for its recently acquired Dutcher PTV vehicles

for MYs 1995, 1996, and 1997. NHTSA is reviewing these petitions and

will respond in early 1995.

D. Enforcement

Article 49 U.S.C. 23912 (b) imposes a civil penalty for $5 for

each tenth of a mpg by which a manufacturer's CAFE level falls short

of the standard, multiplied by the total number of passenger

automobiles or light trucks produced by the manufacture in that

model year. Credits that were earned for exceeding the standard in

any of the three model years immediately prior to or subsequent to

the model years in question can be used to offset the penalty.

With completion by EPA of final CAFE computations for MY 1993

for most passenger car fleets, the agency initiated appropriate

enforcement actions for manufacturers that did not meet the CAFE

standard.

Table III-1 shows the most recent CAFE fines paid by

manufacturers.

[[Page 16914]]

Table III-1.--Cafe Fines Collected During Fiscal Year 1994

------------------------------------------------------------------------

Model year and manufacturer Amount fined Date paid

------------------------------------------------------------------------

1991:

Land Rover.............................. $520,520 10/93

Sterling................................ 254,840 12/93

Porsche................................. 1,871,470 02/94

Fiat (revised).......................... 416,385 08/94

------------------------------------------------------------------------

1992:

Land Rover.............................. 607,620 10/93

Porsche................................. 781,575 02/94

Volvo................................... 5,361,515 04/94

BMW..................................... 12,888,750 05/94

Vector.................................. 1,740 05/94

Fiat (revised)*......................... (2,250) 08/94

------------------------------------------------------------------------

1993:

Volvo................................... 5,764,800 06/94

Fiat.................................... 194,220 07/94

Panoz................................... 3,080 07/94

Vector.................................. 870 07/94

------------------------------------------------------------------------

*Fiat was refunded $2,250 after revised calculation of its CAFE.

E. Partnership for a New Generation of Vehicles (PNGV)

At a White House ceremony on September 29, 1993, President

Clinton and Vice President Gore, together with the Chief Executive

Officers of Chrysler, Ford, and General Motors, formally announced

the Partnership for a New Generation of Vehicles (PNGV). PNGV

(previously known as the ``Clean Car Initiative'') is a historic new

partnership between the United States Government and the U.S.

Council for Automotive Research (USCAR) which represents Chrysler,

Ford, and General Motors. It is aimed at strengthening U.S.

competitiveness by developing technologies for a new generation of

vehicles.

PNGV focuses its research and development toward attaining three

interrelated goals:

Improve the productivity of the U.S. manufacturing base

by significantly upgrading U.S. manufacturing technology, including

the adoption of agile, flexible manufacturing and the reduction of

cost and lead time, while reducing the environmental impact and

improving quality.

Pursue advances in vehicles that can lead to

improvements in fuel efficiency and emissions of standard vehicle

designs, while pursuing safety advances to maintain safety

performance. Research will focus on technologies that reduce the

demand for energy from the engine and the drive train.

Within a decade, achieve automotive fuel efficiency

improvements up to three times that of the average 1994 Chrysler

Concorde/Ford Taurus/Chevrolet Lumina with equivalent performance,

size, and utility, and with customer purchase price comparable to

today's sedans adjusted for economics, while also meeting all

current and future safety and emissions requirements, and preserving

in-use safety compared to the target cars.

The development of energy efficient, low emission vehicles is

economically and environmentally critical. From an economic level,

the introduction of a new generation of vehicles will preserve

American jobs and improve the Nation's competitiveness. From an

environmental level, a new generation of fuel efficient vehicles

will produce less carbon dioxide (greenhouse gas emissions) and

decrease American dependency on imported oil.

The following timetable illustrates probable goals the PNGV expects

to achieve within five to ten years. PNGV anticipates a concept vehicle

by year 2000 and a prototype vehicle by year 2005.

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NHTSA's PNGV Role

NHTSA's role in the PNGV initiative is to provide technical support

to ensure that the selected PNGV vehicles meet existing and anticipated

safety standards and to insure in-use safety equivalent to today's mid-

size passenger cars. NHTSA will also ensure that the overall safety of

the PNGV vehicles is not compromised.

NHTSA technical support includes:

Develop advanced computer models of the PNGV platforms and

selected vehicles which represent the fleet in order to evaluate the

crashworthiness of conceptual designs and their safety compatibility

with contemporary vehicles.

Conduct and evaluate research of light weight materials

such as advanced composites and develop new, unique material models for

usage in the finite element model work.

Provide require PNGV transportation infrastructure

analyses.

Provide peer review study of PNGV programs, including

conceptual designs. [[Page 16915]]

F. Advisory Committee on Personal Motor Vehicle Greenhouse Gas

Reductions

As part of the Administration's ``Climate Change Action Plan,'' the

White House formed an advisory committee to develop recommendations to

reduce greenhouse gas emissions by light vehicles to the year 1990

level. The committee is comprised of a number of stakeholders,

including environmental and public interest groups, automotive

manufacturers, fuel suppliers, vehicle users, and representatives of

state and local governments.

The goal of the committee is to develop policy options that will

cost-effectively reduce greenhouse gas emissions from the use of light

vehicles (cars and light trucks) to the 1990 level by years 2005, 2015,

and 2025.

Policy options being considered encompass vehicle-miles-traveled

(VMT) reductions, efficiency enhancement, and alternative fuels. These

policies include:

Vehicle technologies.

Fuels with lower carbon content.

Vehicle-based regulatory strategies such as CAFE.

Vehicle taxes and/or rebates.

Market-based actions to reduce VMT (fuel taxes, congestion

pricing, and pay-at-the-pump insurance).

Others approaches (e.g., changed land-use patterns,

increased mass transit, telecommuting, Intelligent Vehicle-Highway

Systems (IVHS), and increased carpooling).

The advisory group has conducted four meetings: September 28-29,

October 19-20, November 14-15, and December 15-16, 1994. This project

will run for approximately one year, and it is expected to contribute

to a broad-based approach by the Administration to address light

vehicle greenhouse gas emissions.

G. General Agreement on Tariffs and Trade (GATT) Decision

On September 30, 1994, a ruling by a panel under the General

Agreement on Tariffs and Trade (GATT) upheld key provisions of the

United States CAFE law, as well as the ``gas guzzler'' tax and luxury

tax. The panel rejected a challenge under GATT by the European Union

(EU) which alleged that the CAFE requirements, the gas guzzler tax, and

the luxury tax discriminated against cars manufactured by Mercedes, BMW

and other European luxury auto manufacturers. Those manufacturers have

paid a large share of penalties and taxes under these laws. The panel

agreed with EU complaints on one technical issue--the CAFE accounting

rules that establish separate ``domestic'' and ``import'' fleets for

determining overall fuel economy. Because these rules do not have any

actual economic impact on EU auto manufacturers, and therefore no trade

damage results from this requirement, U.S. Trade Representative Michael

Kantor stated that the United States does not intend to make any

changes in the CAFE rules.

Section IV: Use of Advanced Technology

This section fulfills the statutory requirement of Section 305 of

Title III of the Department of Energy Act of 1978 (Pub. L. 95-238),

which directs the Secretary of Transportation to submit an annual

report to Congress on the use of advanced technologies by the

automotive industry to improve motor vehicle fuel economy. This report

focuses on the introduction of new models, the application of materials

to save weight, and the advances in electronic technology which

improved fuel economy in MY 1994.

A. New Models

The domestic automakers introduced and replaced several completely

new cars models and, in addition, introduced updates and redesigns of

many previous passenger car models. Chrysler introduced the New Yorker

and the Chrysler LHS, two all-new luxury sedans, with an average fuel

economy of 22 mpg each for MY 1994. Ford redesigned the Mustang, the

first major redesign since MY 1979. The car is 4.1 inches longer and

200 pounds heavier than the model it replaced, and already meets some

Federal rules of the newly issued emissions and safety standards which

are being phased in for future years. Ford also redesigned the Lincoln

Continental to include a rounded grille, suspension modifications, and

a smaller bumper. The fuel economy of that model has improved 1 mpg for

city driving. General Motors (GM) introduced two all-new vehicles, the

Cadillac De Ville and the Cadillac De Ville Concours for MY 1994. The

De Ville has a 4.9 liter (L) V-8 engine, a new automatic transmission,

speed sensitive suspension and steering. The upscale Concours gets the

270-hp 4.6 L double-overhead cam (DOHC) Northstar V-8 engine and the

electronically controlled 4T80-E transmission. Both models have an

average fuel economy of 21 mpg.

Automobile importers also introduced a variety of new passenger

cars and updates of their previous models for MY 1994. The BMW 325i

convertible is powered by a 2.5 L DOHC I-6 engine and a 5-speed manual

transmission and has improved its average fuel economy over last year's

model by 3 mpg. The 5-series has three new models for MY 1994, the 530i

sedan, Touring wagon and 540i sedan, all powered with a V-8 engine. The

average fuel economy of the 530i and the 540i is 19.5 mpg and the

Touring wagon is 21.5 mpg. The 535i model has been discontinued. BMW

also has an all-new 840Ci model with a 4.0 L 32-valve all aluminum V-8

engine with average fuel economy of 19.5 mpg and a 850CSi model with a

5.6 L 292-horsepower (hp) V-12 engine with an average fuel economy of

16 mpg.

Honda completely redesigned the Accord with a 2.2L SOHC I-4 engine.

The fuel economy has improved by 0.5 mpg over its MY 1993 counterpart.

Honda's Acura division completely redesigned the Integra to include a

1.8L 142 hp DOHC I-4 engine on the RS and LS model and a 1.8 L 170 hp

VTEC variable-valve-timing I-4 engine on the GS-R model. Acura also has

a new top-of-the-line Legend sedan with a 230 hp single overhead cam

(SOHC) V-6 engine and a six-speed manual transmission.

Kia Motor Corporation introduced its first U.S.-vehicle entries

under the Kia badge. Kia has three compact models, front-wheel-drive 4-

door sedans powered by a 1.6 L 88 hp SOHC I-4 engine with an average

fuel economy of 30 mpg.

Mercedes-Benz introduced its new C-class sedan to the line, powered

by a 2.2 L I-4 engine with an average fuel economy of 25 mpg. The C280

model has a new 2.8 L I-6 engine with an average fuel economy of 23

mpg.

Saab has two all-new hatchback 900 series models with a larger 4-

cylinder engine and an optional V-6 engine for the first time. The Saab

900 moved from the EPA compact size class to the midsize class for MY

1994. The average fuel economy of this model is 21.5 mpg for MY 1994.

Toyota introduced a new 2-door Camry with a 3.0 L aluminum V-6

engine with a 4-speed electronic controlled automatic transmission and

an average fuel economy of 21 mpg. Also Toyota has introduced a new

liftback Celicia model with an all-new 110 hp 1.8 L engine and an

average fuel economy of 30.5 mpg for MY 1994.

Volvo introduce an all front-wheel drive 850 wagon in both touring

and turbo versions with a 2.4 L engine and a average fuel economy of 24

mpg. This model replaced the 240 wagon which also had a fuel economy of

24 mpg.

In the domestic light truck area, Chrysler introduced the full-

sized T300 Ram pickup replacing a model which had been in production

since MY 1972. [[Page 16916]] The new model averages 16.8 mpg, the same

as its predecessor despite being substantially larger and heavier. GM's

GMC division completely redesigned the Sonoma's exterior and interior

with a 2.2L I-4 engine and a 5-speed manual transmission. The Sonoma

average fuel economy is 25.5 mpg an improvement of 0.5 mpg over MY 1993

light truck. GM also redesigned the companion Chevrolet S-10 pickup.

B. Engine and Transmission Technology

Some manufacturers made significant improvements in engine

technology for model year 1994. GM has a new pushrod engine, which

bears a close resemblance to familiar engines. The base Chevy Caprices

gets a 4.3 L V-8 variant of the LT1 V-8 to replace the 5.0 L V-8. The

4.3 L engine produces 200 hp at 5200 revolutions per minute (rpm) (30

hp more than last year's 5.0 L) and 245-pound-feet of torque at 2400

rpm.

Ford introduced a more powerful engine controller called EEC-V on

the MY 1994 Thunderbird, Cougar, and Mustang. Compared with EEC-IV, the

new unit operates 20 percent faster and has 66 percent more memory.

Developed in part through Ford's Formula 1 racing program, EEC-V

features a ``Flash Erasable Electrically Programmable Read Only

Memory'' chip (Flash-EEPROM) that allows service technicians to

reprogram the computer, rather than replace it, when defects arise or

upgrades becomes available.

Still in development at Ford is a new two-stroke gasoline engine. A

major obstacle to two-stroke engine development in the United States is

the Tier II emissions requirement of 0.2 grams per mile nitrogen oxide

(NOx) which is, at best, marginally achievable with current lean-system

two-stroke technology. According to Ward's Automotive Yearbook 1994,

GM's two-stroke development program is winding down. GM preferred to

proceed with development of its simpler dry-sump, roller-bearing

version but reportedly was experiencing piston cooling and cylinder-

bore distortion problems. Ford and Chrysler are moving ahead with two-

stroke programs. Ford is field testing a two-stroke hybrid vehicle in

Europe, and press reports indicate that Chrysler expects to show what

it believes is a marketable wet-sump, externally scavenged engine some

time in the near future.

C. Electronics

Applications of electronic components in vehicles continue to rise.

Some of the applications include four-wheel steering, tire-pressure

sensing, instrumentation, and in-car entertainment grouping. However,

the main concentration is in engine management, powertrain management,

antilock braking systems, air bags, air conditioning, and,

increasingly, suspension control.

Electronic controllers are gradually being incorporated in all

modern automatic transmissions, and this year Ford's 4R70W four-speed

automatic truck transmission and GM's 4L60-E rear-drive four-speed

automatic, both have electronic controls. The GM unit features a

performance mode that provides quicker shifts and higher shift point

speeds. In a quest for consistent shift quality, the controller alters

shifting strategies at high altitudes, as components wear, and as

temperatures rise.

D. Materials

For MY 1994, automakers chose aluminum, high strength steel, powder

metal (P/M), and magnesium for a number of significant new component

applications in their cars, and light trucks. The reduced weight of

these components contributes to improved fuel economy of the models

using them.

Aluminum usage has increased by five-eight pounds (lbs.) annually

per vehicle since 1990 in North America, as reported in Ward's

Automotive Yearbook 1994. Since 1990, the annual increase of plastic

usage has been cut in half every year and is likely to increase only

0.5 lbs. per vehicle during MY 1994.

Even as the use of plastics and aluminum has grown, steel continue

as the primary material in U.S.-built vehicles, comprising well over 50

percent of the weight of the average passenger car according to Ward's

1994 Automotive Yearbook. The amount of steel used in vehicles

continues to grow, due mainly to redesigned vehicles that are longer,

wider and/or taller than those they replaced. These models include the

redesigned compact GMC Sonoma and Chevrolet S-10 pickup trucks,

Cadillac's new Sedan De Ville and De Ville Concours, Chrysler's Dodge

Ram pickup, and Ford's Mustang. The new Sonoma/S10 grew 10.6 inches and

added 262 lbs. in MY 1994 over MY 1993. The long-box version of the

truck gained 384 lbs. from the previous year. Ford added 200 lbs. to

the Mustang, and Chrysler's new Dodge Ram full-size pickup has added

226 lbs.

New safety features added to vehicles also increase the amount of

steel usage in todays vehicles. It is the material used for most door

intrusion beams, roof structures and undercarriage reinforcements

designed to protect occupants in crashes, rollovers and side impacts.

The light-truck market has particularly shown an increase in steel

usage as regulations and consumer demands force light truck

manufacturers to incorporate the same safety features as cars. The GMC

Jimmy, for instance, adds new side-door steel guard beams running the

full length of the door. Steel intrusion beams also are standard in MY

1994 Ford's F-series pickups.

Other new applications include composite steel camshafts in GM's

3.1L V-6s and 2.2L 4-cylinder engines, and steel tubing on the Dodge

Ram's radiator enclosure panels. Also the use of medium-strength

steels, mostly bake-hardenable varieties, increased in MY 1994.

P/M makes up about 27 lbs. of weight of a typical family vehicle

accordingly to Ward's Automotive Yearbook 1994. It continues to play an

increasingly significant role because it can be used to make strong and

lightweight parts that have very complex shapes. Applications for P/M

have been growing steadily in recent years, and several new and

expanded applications were introduced in MY 1994, including P/M bearing

caps on GM's 3100 and 3800 series V-6 engines and P/M inserts in the

bearing cap girdles for Ford's new aluminum 2.5L and 3L V-6 engines.

Magnesium use has risen every year since 1988 by 10 to 16 percent.

Magnesium firsts in MY 1994 included knee-bolster retainers, steering

wheel armatures, and seat pedestals, or stanchions. The knee-bolster

retainers, the first large structural magnesium component application

in the U.S. auto industry, debuted on several of GM's standard-size,

front-drive cars, including the Buick Park Avenue. Ford replaced steel

wheel armature subassemblies with magnesium on its Thunderbird, Cougar,

Taurus, and Sable.

E. Summary

The stabilization of oil prices and supply has been a factor

resulting in a shift of consumer demand in recent years to more

powerful and roomier passenger cars and light trucks. The auto

industry, responding to this shift, has increased the horsepower of its

engines and shifted its production mix to somewhat larger cars. Still,

there were some considerable technical gains, particularly in

lightweight material usage, that contributed to improvements in fuel

economy on some models in MY 1994.

[FR Doc. 95-7428 Filed 3-31-95; 8:45 am]

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