Sustainable Solutions April 2009

TRANSPORT
The car industry:
From crisis to sustainability?
Will the introduction of greener cars help motor manufacturers survive the current economic
crisis? Paul Nieuwenhuis investigates.
I
T MUST be a recession when car and pick-up trucks, rather than the smaller engineering expertise, much of which could
manufacturers come knocking on margins of more technically complex - and be leveraged to make greener cars more in
government ministers' doors asking hence more expensive - cars. During the tune with the mood of the early 21st century,
for money; the most extreme example 1990s and early 2000s, Detroit gradually but they have a long way to go.
being the US. Perhaps, it is only fair - the conceded the car market to the Japanese, Einstein's phrase that we will not get out
banks got themselves into trouble and were hoping to keep SUVs and pick-up trucks of the current mess using the same thinking
bailed out, the car industry gets itself into American. that got us into it has been much quoted in
trouble and also wants some support. We Detroit also missed the environmental recent months, but not much heeded.
could argue that in both cases government segment. General Motors so nearly got in Over-consumption and over-engineering
is saving 20th century institutions when there ﬁ rst with its innovative EV-1 electric - the thinking that got us into this mess - is
what is really needed are new 21st century sportscar of 1997. Not only was the car zero therefore probably not the solution.
institutions. emissions at point of use, and innovative Unlike in the last recession, there is
Much of the boom enjoyed by the car in most ways, it enjoyed a dedicated and another cloud hanging over the industry; the
market in recent years was ﬁ nanced with completely new low volume manufacturing need to move cars on to a much lower carbon
borrowed money. Many of those SUVs system. EV-1 also enjoyed a new marketing footing. In Europe it became clear by about
and pick-ups that became the bugbears of approach; it was the ﬁ rst car ever to be 2005 that the carmakers were not on target
environmentalists were bought on cheap badged a 'GM' and it was marketed via GM's to hit the 140g/km limit they agreed with the
ﬁ nance or easy leasing deals, many of them innovative Saturn division. EU for 2008, despite the best efforts of Fiat,
in some respects 'sub-prime': over-borrowing This was a car for the 21st century with a Renault and PSA. In response, the EU began
from ﬁ nancial institutions to enable over- 21st century business model to back it up. So to commission studies of how any legislation
borrowing from our natural environment. the highly paid executives at General Motors on CO2 might be framed and what would be
Carmakers depend for their access to withdrew the car and handed environmental the impact on the car industry. The proposals
ﬁ nance on their share value. The ﬁ nancial leadership to Toyota and Honda. They are came in early 2007 and the carmakers have
institutions have long expected quarterly now belatedly trying to catch up with the - been ﬁ ghting it ever since, lobbying various
results from companies in order to track admittedly highly promising - Chevrolet Volt EU governments.
their ﬁ nancial performance. Product cycles plug-in hybrid concept. The deal that came out of this process was
in the car industry do not lend themselves GM, Ford, and to a lesser extent Chrysler, passed by the European Parliament with 599
well to this. In this context, US auto industry are still ﬁ rms with impressive levels of in favour, 98 against and 60 abstentions. This
executives, perhaps understandably, amounts to a majority of 785 MEPs - quite
preferred to bet on the an impressive level of support for a radical
guaranteed short-term environmental measure.
proﬁ t margins of The detail of the legislation will mean
SUVs that until 2019 the ﬂ eet average that
has to be met is still well above the
130g/km the Commission aimed at.
It is quite possible that technologies
now in the pipeline and other
market and macroeconomic effects
such as the recession will bring
the average down below this legal
maximum in any case.
One interesting element of the
legislation is the fact that a new target
of 95 g/km is included for 2020.
BMW launched its EfficientDynamics pledge in 2007 to help cut CO2 emissions
and improve the performance of the entire BMW range.
SUSTAINABLE SOLUTIONS April 2009
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