Realistically, there are plenty of profits to be made on small cars as well, there just has to be the will and creativity to make the cars that consumers want.
WSJ.com - How U.S. Shifted Gears to Find Small Cars Can Be Safe, Too
For decades, whenever the federal government leaned on auto makers to improve fuel efficiency, the industry had a ready response: Research showed that lighter, more fuel-efficient vehicles weren't as safe as their heavier, gas-guzzling cousins. Even shedding as little as 100 pounds could lead to a serious increase in traffic fatalities.
The result has been a virtual standstill in fuel-economy improvements for cars, trucks and sport-utility vehicles over the past 20 years.
Now a wave of new studies and technologies -- strong, light materials, better airbags and smarter designs -- are beginning to break the logjam. The upshot: A big shift in government thinking that is paving the way for regulators to revamp fuel-economy rules for SUVs and pickup trucks for the first time in three decades.
Over the past 15 years, when gasoline was generally cheap, the industry came to rely on heavy, fuel-thirsty models such as SUVs and pickup trucks for the bulk of its profits. Much of auto makers' fixed costs, such as retiree expenses, labor and benefits, are similar from vehicle to vehicle. So the bigger and pricier the car or truck, the more profit it generates. To protect this profit stream, the industry has long fought calls for tougher fuel-economy rules, citing safety, consumers' preference for bigger cars and lost jobs at truck factories.
Spurring the change in government thinking is new research, including a study that argued that the quality of a car can play as much of a role in safety as its weight. To measure quality, the study used resale values, which tend to correlate with better design and more safety features. Honda Motor Co. also broke from the industry, commissioning studies that found reducing a vehicle's weight while maintaining its size actually saves lives.“There's now a credible opposing view to what used to be the only view,” says David L. Greene, a research fellow at Oak Ridge National Laboratory, a Department of Energy research lab. A paper he co-authored in March, looking at car-crash fatality rates from 1966 to 2002, found no statistically significant relationship between fuel economy and increased traffic fatalities. Mr. Greene says that previous research that did find a correlation studied only the immediate years after fuel-economy reform when weight drops were most significant. But studied over a longer period, that correlation disappears, he says.
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Honda, which mostly produces smaller and lighter vehicles, was tired of the argument that undercut its lineup. So in 2002 the Japanese auto maker, which traditionally stood on the sidelines while the rest of the industry waged political fights on Capitol Hill, began to spread the notion that small, fuel-efficient cars can be safe. Its case in point: the 2001 Civic Coupe. When the car was redesigned in the late 1990s, engineers built a shorter engine and moved up the gear box to create more space for the front end to crumple and absorb a collision's impact, among other measures.The two-door Civic became one of the first cars to get the government's top five-star rating in four different crash-test scores in late 2000. The only other car at the time with the same rating was Volvo's S80, which weighed 1,000 pounds more than the Civic's 2,500 pounds and cost up to three times as much as the Civic's starting $13,500 price.
Honda also hired Dynamic Research Inc., an auto and aerospace consulting firm in Torrance, Calif., to update Mr. Kahane's study using newer vehicles. In 2002, DRI concluded a 100-pound drop in an average newer vehicle had a “very small and not statistically significant” effect on the number of traffic deaths. (A 100-pound drop in weight improves fuel efficiency on average by 1% to 2%.)
Tags: automobile, /Honda
