German car makers upset by US pick-up-truck exemption

By Daniel Schnettler Aug 17, 2011, 4:06 GMT

Washington - All new cars in the United States must radically reduce their fuel consumption by the year 2025 but making an exception for big American pick-up-trucks is stirring the ire of German car makers who are feeling disadvantaged.

Average fleet consumption of all new cars is to be reduced to 4.3 litres per 100 kilometres compared to 8.1 litres last year. US President Barack Obama wants fuel consumption to drop dramatically.

The problem is that the reduction will hardly be possible with the high number of fuel-guzzling Sports Utility Vehicles (SUVs) and pick-up-trucks on the road. Pick-up trucks like the Ford F-150 are loved by the handyman and family man wishing to transport heavy cargo on the large loading bay.

The Ford F-150 at best has a consumption of 10 litres and at its worst about 21 litres per 100 kilometres. But it is precisely with these cars that the Big Three car producers in the US - General Motors, Ford and Chrysler - earn their money, which is why they managed to push through an exemption of the trucks from the ruling.

While ordinary cars will be required to reduce their consumption to 3.8 litres, the big trucks will be allowed 5.4 litres. The major German car producer Volkswagen lambasted the rule as an 'unjustified burden'. The Daimler concern also described the exemption as giving the American SUVs and pick-up-trucks a clear advantage.

The German car makers mainly sell passenger vehicles in the US. Daimler for instance sells the C- and E-Class cars, Volkswagen the Jetta and Audi the A4. They would all be affected by the stricter fuel plans.

Only BMW supported the Obama plan. 'We accept the challenge,' said US head of production Josef Kerscher.

However, BMW has the advantage that the Mini is a sales hit in the United States and is included in the equation. At the same time the car producer has made huge progress in the development of electric vehicles.

Daimler is also selling it two-seater Smart in the US but has had poor sales. It is now planning to bring the compact Mercedes A-Class to the US in 2013. Volkswagen is trying to boost sales of its diesel cars which has always been difficult on the US market.

At the moment the fuel consumption ceiling is a voluntary accord between Obama and 13 car producers. The plans still have to be approved by congress. Volkswagen meanwhile is hoping to make its influence felt in the White House by pushing for tax concessions for diesel cars.

But for some of the car makers there is still a back door left open. Halfway through to the year 2025 the administration will assess whether the ceiling is realistic, which is likely to set off another round of negotiations.