The Most Fuel-Efficient Luxury Brands
- by JEFF ZYGMONT, ForbesAutos.com
Improvements in the next decade will come in the form of revised engines, new diesel and hybrid systems, lighter materials, and new body structures. Luxury automakers promise significantly better gas mileage in the next 15 years without having to drastically downsize their vehicles or compromise comfort, performance, and amenities.
Today, all passenger cars sold in the United States each year by every automaker must average 27.5 miles per gallon (11.6 km/l) as rated by the U.S. Environmental Protection Agency. The current average for light trucks, including sport utility vehicles, is 22.2 mpg (9.4 km/l). Under new Corporate Average Fuel Economy (CAFE) standards, the yearly crop of new cars and trucks combined must hit 35 mpg (14.8 km/l) by 2020.
Raising corporate average fuel economy by 7.5 mpg (3.1 km/l)over the next 12 years might not sound significant to consumers, but it's a serious issue considering that luxury automakers like BMW, Mercedes-Benz, and Porsche already have trouble meeting current CAFE standards.
See full list of Most Fuel-Efficient Luxury Brands
"BMW, Porsche and Mercedes have been paying millions of dollars in fines," says Michael Omotoso, senior manager of global powertrain research for J.D. Power and Associates. "They basically see it as a cost of doing business here, almost as a form of taxation. Because they charge premium prices, they make enough to absorb the fines."
Every year the National Highway Traffic Administration (NHTSA) asses CAFE standards and any manufacturer that misses the market gets fined $5.50 US for every one-tenth mile-per-gallon below the standard, multiplied by the manufacturer's total production for the American market.
BMW automobiles hit the target in 2007, but missed 2003 through 2006. Porsche missed the CAFE standard for automobiles 2003 through 2007; it has fallen short on truck CAFE standards every year since introducing its Cayenne SUV in 2004.
The imported fleet of DaimlerChrysler automobiles, consisting almost entirely of Mercedes-Benz models, missed the CAFE minimum from 2003 through 2007.
Ranking the Luxury Automakers on Fuel Efficiency
As a guidepost for the ground each luxury automaker must cover by 2020 to meet the federal government's new CAFE standard of 35 mpg (14.8 km/l), we've compiled what amounts to fuel-economy scorecards for the luxury brands. The list ranks the average fuel economy for each fleet of 2008 models sold by the major premium nameplates. We've included all of the premium brands, 13 total, that sell more than 5,000 vehicles in the United States annually.
Official CAFE figures for most luxury brands are unavailable because the NHTSA lumps together the various brands under one corporate parent. Therefore Cadillac's CAFE score is lost within the figure for General Motors. Lexus is buried inside the Toyota CAFE result each year, and so on.
As a result, our ranking is based on averages of the EPA fuel-economy estimates for all variations of each model a luxury automaker sells. We computed a separate city average and highway average for each brand, then used those city/highway averages to calculate a combined miles-per-gallon rating for the nameplate, which we then used to rank them.
For the miles-per-gallon averages in used in our ranking, each model is counted only once, no matter how many a manufacturer sells. Therefore these averages do not equal the brands' official CAFE figures.
The NHTSA determines manufacturers' corporate average fuel economy by weighing how many of each particular vehicle in a manufacturer's lineup is sold each year. Vehicles that sell in higher numbers have a greater impact on CAFE scores. So even if a company sells gas-guzzling road rockets with low mpg ratings, as long as few are produced relative to other models, CAFE scores don't suffer greatly for it.
Lexus, Volvo, and Acura, made the top three spots in that order, with average fuel-economy ratings of 20.51 mpg (8.71 km/l), 20.44 mpg (8.68 km/l), and 20.27 mpg (8.61 km/l). In theory, companies near the top of the list have less ground to cover in order to comply with the 2020 CAFE standards. Brands in the bottom half, such as Lincoln (17.22 mpg/7.32 km/l), Mercedes-Benz (16.54 mpg/7.03 km/l), and Land Rover (14.81 mpg/6.29 km/l), which are the bottom three, sell premium vehicles that are, on average, the least fuel efficient. In theory, these companies have the most work ahead of them to be in compliance with the new 35-mpg (14.8 km/l) standard.
Luxury automakers insist that efforts to increase gas mileage have been underway before the new CAFE standards became law late in 2007.
"Fuel economy was not on the radar screen of the luxury buyer in the past," says Caldwell. "Now, for some luxury buyers it is in the mix. Technologies that increase fuel economy are entering the luxury market because they are desired by consumers."
With many affluent car-buyers, fuel-economy concerns likely have less to do with saving money and more to do with fashion. As the public embraces conservationism, well-heeled drivers who typically didn't worry about gas mileage could start to do so for fear of what their neighbors might think.
"It may become unfashionable to drive a gas guzzler," Global Insight's Wolkonowicz says. "People don't want to look like they're being socially irresponsible. They will want to drive a vehicle that looks more fuel efficient."
As evidence that the migration toward greater fuel efficiency is already underway, Cadillac's Caldwell points to improvements in the company's V6 engines that boost power while conserving gasoline, especially when compared to larger, V8 engines.
"Direct-injection technology on our 3.6-litre V6 has boosted the desirability of the base engine significantly," Caldwell says. As a result, fewer than 15 percent of Cadillac STS sedan buyers choose the beefier, V8 upgrade. Several years ago, about 20 percent of STS buyers chose the V8. "Sticking with the base engine does not represent as much of a sacrifice as it did in prior eras," he says.
At BMW, an engineering program called Efficient Dynamics has been underway for five years now. It focuses on reducing fuel consumption and exhaust emissions while at the same time enhancing the vehicles' driving dynamics, says BMW spokesperson Jan Ehlen.
The Efficient Dynamics improvements are varied and not just limited to engines. For example, an electric power steering system being phased into various models reduces energy usage by activating the steering motor only when needed.
Turbocharging Ahead
In the immediate future, luxury brands will achieve greater fuel efficiency without compromising performance by relying more on turbocharged engines, says J.D. Power's Omotoso. "You can have a turbocharged four-cylinder engine with similar power to a six-cylinder, but the fuel economy of a four-cylinder," he says.
Audi already touts its turbocharged 2.0-litre four-cylinder engine, which also benefits from advanced, "fuel-straight injection" — a method of improving combustion efficiency by controlling fuel injection more precisely, says Audi spokesperson Andrew Lipman. "There's a convenience factor involved in simply not having to fuel up as often, and time saved not at the gas pump is a luxury in and of itself," he says.
Diesel engines, which are inherently more efficient than gasoline engines, will grow in popularity and will account for 10 percent of U.S vehicle sales by 2015, and 15 percent by 2017, Omotoso says.
Similarly, hybrid systems will spread to more models and become more varied, Omotoso says. Currently, Lexus is the only luxury automaker to offer hybrids —including the GS 450h, LS 600 h L, and RX 400h — but BMW, Mercedes-Benz, and Porsche all have hybrids in the works.
At the same time, automakers will continue to replace traditional sport-utility vehicles, built on stout pickup-truck frames, with crossover utility vehicles, which employ a lighter car-like body structure and often use front-wheel drive, which Omotoso says is more efficient than all- or rear-wheel drive setup.
Global Insight estimates that prices of new cars will increase anywhere from $2,000 to $10,000 per vehicle as a result of new technology designed to boost fuel economy. "There's likely to be a cost in terms of reliability and durability, because of the complexity of these technologies," says John Wolkonowicz, senior automotive analyst for the research group Global Insight.
While vehicle dimensions won't necessarily decrease, neither will they increase with each new generation, as they persistently have over the last decade. Wolkonowicz and other industry analysts expect the average car sold in America to shrink only slightly in the coming years. "Technology is coming to the rescue here," Wolkonowicz says. "If people can afford the technology, they will still be able to drive the type of vehicle they want."
That's particularly important for premium cars, which are judged on a different set of criteria than the average vehicle. "Luxury-car buyers are typically not willing to sacrifice safety, technology, and performance, not to mention comfort and productivity," says Donna Boland, spokesperson for Mercedes-Benz USA. "They expect the manufacturer to figure out how to lessen the environmental footprint" while retaining the traditional attributes of premium-class models.
Luxury automakers face tough challenges as affluent buyers remain focused on attributes beyond fuel efficiency. "The addition of fuel economy as a consideration does not reduce the importance of all the other aspects of desirability that go into a luxury purchase," says Cadillac spokesperson David Caldwell "It's added to a long list, along with power, performance, quietness, technology, comfort, capability. Luxury buyers want everything."
Under the new law, which passed late in 2007, the penalty for missing the annual CAFE requirement remains unchanged. However, the new law discards the single, uniform CAFE requirement currently imposed on all manufacturers alike. Instead, NHTSA will devise different fuel-economy floors for different manufacturers. These have yet to be determined.
Mathematically, the various CAFE requirements will have to bring every new car and truck sold in the U.S. annually to an average fuel-economy of 35 mpg (14.8 km/l). But NHTSA can get there by assigning CAFE levels below 35 mpg (14.8 km/l) to companies that make predominately large cars, and levels above 35 mpg (14.8 km/l) to others that favor smaller cars, for instance.
The idea is to emphasize fuel efficiency relative to vehicle size and other key variables, says Michael Harrington, NHTSA director of external affairs. "Under this bill, CAFE is going to be set per manufacturer. Carmaker A might be at 38 miles per gallon (16 km/l). Carmaker B might be at 33 (14 km/l)," he says. "This way, people can build the kind of models they want, but overall, all their models have to become more fuel efficient."
NHTSA plans to conduct public hearings on the re-regulation beginning in the spring, before making the actual CAFE assignments to car companies. The phasing in of new targets will begin with 2011 models.
The fuel-economy ranking in our slideshow gives an idea of how the nameplates currently stand in fuel efficiency. The averages are based on the official fuel-economy estimates published for each model and model variation in the Environmental Protection Agency's 2008 Fuel Economy Guide, the most comprehensive and authoritative source.
Our scorecard excludes the Hummer brand from General Motors. Because of its mass, the Hummer H2 wins government classification as a special-purpose vehicle. That exempts Hummer's primary model from reporting fuel economy. Otherwise, the averages include all the low-volume, performance-enhanced special editions, as well as the standard models each brand offers. The many low mileage, high performance AMG models from Mercedes, like the M cars from BMW, pull down their scorecard averages more than they would affect actual CAFE. Still, they help show how high performance hurts fuel economy. Attending to both has become one of the greatest challenges luxury brands now face
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