There will soon be an influx of small and fuel efficient vehicles in the United States market – including the recently unveiled Ford Fiesta and Chevrolet Cruze – but new study finds that a lack of government support could put the brakes on the small car revolution.
While it’s hard to argue with a vehicle that returns better than 40 miles to the gallon, CSM Worldwide’s latest research suggest that small cars will require further policy changes to be successful in the United States. With gas prices well under $3 a gallon around most of the country, only about 4 percent of new car shoppers are buying B-segment or smaller vehicles.
In order for that figure to climb to the government’s ideal level of 40 percent, CSM finds that further gas taxes will be necessary. Other regions such as Europe and Asia currently employ higher gas taxes as a way to promote more fuel efficient vehicles – and with great success — but CSM vice president of global vehicle forecasts Michael Robinet doubts whether such legislation will ever come to fruition in the U.S. “It comes down to political fortitude and whether we have the guts to do it,” Robinet told The Detroit News.
CSM’s research also found that the added cost of green technology could hold back more fuel efficient vehicles in the market place. Even at a modest price bump of $1,000 for small engines with start/stop technology, it would take buyers 5.4 years to recoup the added purchase cost in fuel savings — given gas prices remain constant at $3. The hybrid equation is even worse, taking 8.2 years to pay off the price premium. Electric vehicles are the worst offenders, with a massive payback period of 14.7 years.
Despite the current roadblocks, something will have to give in the coming years. Whether through gas taxes or massive incentives, automakers will have to find a way to sell more fuel efficient vehicles in order to comply with the newly minted 35.5mpg standard by 2016.
