TRENDS: Fuel-ecnomy requirements changing vehicle mix

Speaking at an industry event this month, Greg Horn, vice president of industry relations for Mitchell International, discussed the impact that increases to federal fuel economy standards are having on automakers. In late 2009, the Corporate Average Fuel Economy (CAFE) requirements were changed to require each automaker by 2016 (rather than by 2020, as earlier established) to sell a fleet that averages 35.5 miles per gallon.
“That is an ambitious goal,” Horn said. “A lot of auto manufacturers for whom it takes four years to get from the drawing board to the showroom floor, are in a state of panic.”
Global automakers, Horn said, are looking at the most fuel-efficient cars they sell elsewhere in order to bring those vehicles into the U.S. market. Though its late summer debut has been delayed indefinitely by the situation in Japan, the Scion IQ is one example of new micro-cars coming to U.S. streets. The tiny vehicle, powered by a 90-horsepower, 1.3-liter 4-cylinder engine, will be sold as a 4-passenger vehicle even though the headrests for those in the backseats butt up against the back glass. Horn said to help the vehicle meet federal safety standards, it has nine airbags.
“The good news is you’re going to survive the crash. You’ll suffocate afterwards, but you’ll survive the crash,” Horn joked.
Similarly, Chevrolet is introducing the Sonic, a less-well-equipped version of the Aveo, Horn said, and Nissan is introducing the $9,000 Micra (on which the radio and air conditioning are options). Chrysler will bring in the Fiat 500, which is four inches shorter than a Mini Cooper, and Mini is showing a concept vehicle that is a foot shorter than its existing vehicles.
The problem with many such vehicles for collision repairers, Horn said, is their low values will tend to put them into the total loss category even with only minor damage. The Ford Fiesta is coming back into the U.S. market at about $14,000, Horn cited as one example. One of the vehicle’s distinctive features are its long Xenon headlights, which stretch much of the length of the fender and, as Horn said, “are about half an inch from the edge of the front bumper cover.” Replacements sell for $480 each.
“In a couple years when those cars are valued at about $10,000, rear-ending someone and having the bags blow and the windshield and both of those headlights go? You’re not going to be fixing a lot of those Ford Fiestas,” Horn said.