European Carmakers Unfazed by Obama Proposal

Several of Germany's top carmakers said they likely won't be affected by changes to U.S. emissions and fuel standards on May 19, 2009.

Several of Germany's top carmakers said Tuesday they likely won't be affected by changes to U.S. emissions and fuel standards, staking a claim to be the market leaders in efficiency.

Birgit Hiller, a spokeswoman at BMW AG in Munich said the company would probably have an advantage over its competitors in the U.S. - its largest market - if the proposed changes were made to U.S. policy.

"Being the leader in the premium segment in fuel efficiency and emissions, we could have an advantage in the market," Hiller said.

The X5, BMW's largest, most luxurious sport utility vehicle rivals the 2009 Toyota RAV4 in fuel economy ratings, rated at 19 miles a gallon in city driving and 26 mpg on the highway by the U.S. Environmental Protection Agency.

Hiller added that, "We haven't heard anything on the president's proposals. This is not the final version."

Porsche SE spokesman Dirk Erat in Stuttgart, said he didn't think the new policy would have much of an effect on sales at the sports car maker. The U.S. is also Porsche's biggest market, where it sells about one third of its total production annually.

"The Porsche sports cars are the most efficient in the branch.

If you compare the Porsche 911 to others in the branch, they are more fuel efficient. They are very effective," Erat said.

Spokespeople at Daimler AG, maker of Mercedes luxury cars, could not immediately be reached.

Volkswagen of America provided a statement from the Washington-based Alliance of Autombile Manufacturers, saying that the company supported the president's program. The alliance includes VW, Porsche, BMW, Daimler's car division Mercedes-Benz, Toyota and Mitsubishi.

Jeremy Anwyl, CEO of the auto Web site Edmunds.com, said that one disadvantage for European automakers is that they don't make many vehicles that fit into the light truck category. Anwyl said the U.S. automakers have been able to place their larger vehicles, such as crossovers, in the truck category which has lower fuel economy standards than the one for cars.

On the flip side, the mainstream European automakers are much more used to meeting high fuel economy standards.

"In their home markets they've been dealing with demand for fuel efficient vehicles because of the high price of fuel and have been meeting that demand with turbo chargers, fuel injectors and diesel," Anwyl said.

Meanwhile, Europe's high-end luxury vehicle makers resigned themselves years ago to paying of millions of dollars in penalties year after year because of their focus on gas guzzling vehicles, he said.

"The fines are based on volume, so it's not a big deal when you're talking about a $200,000 Lamborghini," Anwyl said.

The tone was far different from December 2008 when the European Union and European Parliament struck a provisional deal to give car makers more time to meet stricter limits on greenhouse gas emissions.

That deal was a partial victory for Volkswagen and BMW, who claimed they would be crippled by new climate change rules that forced them to change the kind of cars they make.

They have said that they could not afford to spend heavily on developing new technology and refitting plants amid slumping sales wrought by the recession.

Earlier Tuesday, Daimler took a stake in U.S. electric car maker Tesla Motors to augment its own battery-powered electric car efforts. Daimler said the first fruits of that partnership would be the production of electric Smart fortwos, the small two-seaters common in European cities.

Earlier this year, Porsche showed off its Cayenne S Hybrid prototype SUV, which uses a parallel full hybrid design developed with Volkswagen and Audi engineers, the prototype Cayenne S Hybrid relies on a combination of internal combustion and electric power to reduce C02 emissions and boost mileage from 14 mpg in the city to 24 mpg.

German car makers have also embraced diesel-powered models, with VW's diesel-powered Jetta TDI sporting 40 mpg in highway driving, according to the EPA.

Mercedes-Benz also sells several "clean diesel" vehicles under its "BlueTEC" badge. Audi and BMW also offer diesel vehicles in the U.S.

Diesel engines are more expensive to produce, pushing up a car's price, but U.S. buyers can be eligible for federal tax credits, which are based on a formula that considers vehicle weight, fuel economy and other factors.

(AP)