The first thing I thought of when I read this was Opel. Obviously the brand doesn't exist in the US market, but if things get dicey with Opel and GM in the years ahead due to the deal with Magna/Sberbank (and GM needs a way out), I wonder if they would be considered a takeover target by Mercedes or BMW?

Granted, each has tried their hand at merging with a mass-market manufacturer, but neither was a home-grown German company. I could imagine that taking a stake in a fellow German carmaker as a means to achieve CAFE mandates may be an interesting way to circumvent the rules down the line...

Just my two cents.

 

I have always envisioned a BMW - Honda partnership. Acura would be the casualty, but the up end is that they would both thrive independently if they were aligned to do so.

MB is in big kaka. Opel would be a nice catch, but it isn't going to happen. Chrysler was their one shot at glory, but they blew it. Maybe they can pick the spoils again when Fiat/Chrysler folds. Or perhaps they could align them selves with (ugh) Hyundai.

It's a given that only about 9-10 marques and their luxury counterparts (20 brands) will survive the current worldwide meltdown. The world economy just can't support any more than that.

The world is getting smaller, and the global auto manufacturing glut has to shrink enormously.

 

What I think will happen is more cooperation in development on engines trannys etc by BMW and MB, since that way they could reduce the development cost, hell I always wondered why when Ford bought LR from BMW they didnt make some kind of deal so that Jag could develop with BMW some kind of platform so they could reduce cost in some way or hell ask BMW to be a minority owner in Jag so they could had helped them back then to get new platforms and not the mess that happened

 

Small displacement diesels. Easy fix.

 

That is probably why they are starting to push diesels here more and more. I guess the question is whether they can get people to buy them. So far they really haven't brought a small diesel here like VW. They have targeted the larger 6 cyl diesels since they work in both SUV's and cars. I think in a car like a BMW 3 series or the C or E Class they would sell better as diesels if it was a much more fuel efficient 4-cyl. They probably need to offer both and see how many customers they can get to bite on one or the other.

 

And at the same time demand in the US for German cars is increasing. But since American's driving German cars don't care at all for how these cars drive, and only about the status they're gaining be being seen driving one, these companies could do anything they want to these cars and the US consumer wouldn't care- put 3 cyclinder engines in there, 2 stroke engines, etc.

 

fine by me if they have to merge or cease like everyone else. nobody needs a bimmer. maybe cadillac can gain some sales this way.

besides, just merge with VW then. problem solved.

 

That's like saying nobody needs a Cadillac. Just sayin... :drive:

 

Wasn't there a sales loophole in the rules? If the manufacturer sells fewer than 60,000 - 100,000 cars/year (I don't remember the number) in the US, they're exempt?

 

S-class will continue to be the CAFE-burdening vehicle. Expect the BMW 320 to debut shortly.

 

I thought I read that there was a regulatory break for under 400,000 sales. The Germans have to be careful on this. A prestige DB that is slower than a Ford Focus will be in trouble. No performance plus an expensive sticker price = fewer sales.

 

There was a previous thread that the German car manufacturers had lobbied for a rule that would allow them to be exempt because they make a relatively small amount of vehilces - as if 400,000 is somehow small builder. I don't know if that happened or not.

Der Reich doesn't like being messed with....

 

If stupid Americans can figure this thing out it ought to be a piece of cake for these German engineering geniouses....

 

Marchionne has already admitted that Americans will shun 1.8L turbo four cylinders

Actually, I believe Fiatsler is busy either refitting the GEMA engines with Multiair (turbo), or refitting the factory to build the original Fiat Multiair engines (1.4, 1.8)

 

Welcome to a somewhat level playing field. How will your vehicles compare to Cadillac when forced to live under the same CAFE umbrella? Enjoy the pain.

 

Agreed. Plus I don't see why it is ok for rich people to pollute because they can afford to, where I must buy an average car and pay extra for technologies that don't pollute.

 

If they really are going to boost fines, it could be the best thing to happen to GM in forty years. GM has gone along with CAFE while the Germans totally blew it off (you'd be surprised at some other CAFE scofflaws - Subaru for example).

One thing that is missed in this report is that the law was passed in congress for 35mpg period - no 'light truck loophole.'

But then the Obama administration construed its enforcement by putting through a 39mpg car standard and kicking light trucks back to like 30mpg.

Wonder what that will result in?

Mercedes: the leader in super luxury light trucks.

 

BMW, MB and Audi all sell very economical cars in the rest of the world, just not here. It wold be a hard sell in the US to get Americans to pay $70000 for a 730i sedan with a 230hp 6 cyl engine or a Audi A6 2.0T for $55000. Even a 320tdi BMW would go for $46000 here. Americans don't see value in a large expensive luxury car with a small engine and slow acceleration. Almost every German car is available with either or both smaller gas and diesel engines than are available here. Cost of certification, larger more diverse inventory, smaller markets and longer supply chain keep those cars in Europe. Take the 3 series BMW for example, 3 diesels, 3-4cyl gas, 4-6cyl gas and a V8 are available in Europe with highway mileage starting as high as the mid 40's. In the US we get 1 diesel, 2-6cyl gas and the V8 and equivalent BMW models are cheaper here than in Germany. A good barometer will be how many 4cyl LaCrosses are sold in the premium trim levels.

 

I doubt it. They have already started that will pass the cost on to the consumer so no harm. And yeh they will just introduce their smaller engines that they already have in the EU.

 

"The German premium manufacturers' business models and profit structures are utterly reliant on selling high-end, high-powered variants. The incremental costs of building large engines are negligible, yet the price points are vastly higher. In simple terms, the top 10 per cent of mix makes all the EBIT (profit before interest and tax) at these companies," Warburton said.

Ummm....
What carmarker in the world doesn't have this business model?

And as Audi has found out with their Q7, the diesel is outstripping supply. They expected the diesel to be ~10-15% of total. It turned out to be ~50%. And we all know just how powerful that diesel is.
The next S-Class is purported to be 100% hybrid.

The Germans already have the technology in place to make an impact. It's just a matter of getting it to market.

Marchionne has already admitted that Americans will shun 1.8L turbo four cylinders and 2.0L JTDM diesels. So, Fiat is not going to try to force feed the beast something it doesn't want.

If you were shopping for a new Cadillac CTS, would you consider either of the aforementioned engines as acceptable? I don't think so.

Audi has proven otherwise with Q7.

 

Unless the Germans get some kind of preferential treatment -- something I think is highly unlikely -- they're hosed.

I don't know a single owner of a German sedan, except maybe the wannabe 3 and 1 series owners, who would want an anemic engine in their 5, 7, E, or S class cars. It's just not going to happen. A good friend of mine was dumbstruck when I told him they sold 5 and 7 series cars with much smaller engines. He said "Why would anyone buy them? They'd barely move!"

There's more to the mystique of a German sedan than the badge. They're known to accelerate and handle. And they'll lose a lot of business if they try to push anemic cars here. And diesels remain a non-starter for many.

 

Also, I don't understand why industry consolidation will do in this case.
It seems counter intuitive. In fact, it's nonsense and a waste of time, energy, and money.

It seems like the author doesn't realize that the Germans don't offer the majority of their cars to the US. The Germans only offer what they believe the US market will consume -- the larger, gas guzzling, big horsepower engines.
The author forgets the Germans also have an entire lineup of short-wheelbase, high efficiency diesels from which to draw upon, should the market shift in the US.
Furthermore, the author also forgets that at each level, these German cars can and do offer equivalent luxury levels to the big horsepower models. In short, you can get, custom wood and high luxury leather with the dinky small engine -- diesel or not.

There are fundamental difference in how the German car companies operate, that aren't really covered in this editorial.
And while I believe that the Germans will have difficulties in this time of CAFE restrictions, I don't believe their troubles will result in a market consolidation. Some of that has to do with the Germans already having existing models in their lineup to take the place of the less efficient ones currently on sale. Some of it has to do with the fact that the Germans stated they would pass on the cost to the consumer without taking a significant hit in their bank statements. And some of it has to do with the fact that Europe also has their version of CAFE, which is more or less as stringent as CAFE, and put strict limitations on emissions as well.

It's a changing world, and even the Germans are forced to adapt.
No one said it was going to be easy.

 

It seems like the author doesn't realize that the Germans don't offer the majority of their cars to the US. The Germans only offer what they believe the US market will consume -- the larger, gas guzzling, big horsepower engines.
The author forgets the Germans also have an entire lineup of short-wheelbase, high efficiency diesels from which to draw upon, should the market shift in the US.

Yes, in all models and at every price point the Germans offer advanced, economical in-house diesel engines, already in current production - does GM, eg?

What threatens to 'cook the foreign goose' might also boil the domestic gander.

Furthermore, the author also forgets that at each level, these German cars can and do offer equivalent luxury levels to the big horsepower models. In short, you can get, custom wood and high luxury leather with the dinky small engine -- diesel or not.

In a CAFE dominated market, can GM or Ford brand-value deliver greater profits via their bulk-buy 'cheap n cheerfuls' - in an extremely brand-aware market - to the higher priced yet similarly fuel-efficient Europeans?

 

If all of the MB, BMW, Audi, VW were all sold as diesel, the price of diesel woud probably sky rocket to the price of European diesel. We don't have the capacity to supply that much diesel.

 

My guess is that over 20% (56 million) of the 280 million registered US automotive fleet would have to be MB/BMW/Audi/VW/(Ford-Volvo/GM-Opel/Chrysler-Fiat/others) diesels to significantly disrupt the gasoline/diesel consumption ratio enough to cause any potential problems.

And EACH truly FUEL FRUGAL diesel vehicle has the potential of reducing oil imports by 18 to 33 barrels of crude per vehicle year ... 56 million vehicles could potentially save over 1 BILLION barrels of imported oil per annually.

I believe you will find that the typical US refinery produces roughly 10~12 gallons of diesel for every 20 gallons of gasoline refined (and that requires about one (1) barrel, 42 gallons, of crude oil).

Do you believe the US diesel fuel consumption rates are high enough to equal 1/2 of the gasoline consumption rate?

Any "surplus" US diesel fuel is sold on the world market ... already.

IF diesel demand exceeds 50% of gasoline demand, there are alternative refining processes, often used in Europe, that generate approximately 2 gallons of diesel for every gallon of gasoline.

So the supply problem is easily solved!

Also, generally speaking, about 1/3 of the price of diesel in Europe is tax.

So ... DO NOT WORRY!

BTW, refinery utalization was down to about 88%~85% two months ago, compared to the high 90s% in 2007/2008. And, there were predictions of 78%~75% utalization in the near future. Plus "Finished Reserves" are STILL continuing to increase as of last week.

It sounds like some smaller/less efficient refineries may begin shutting down soon (if not already). There are about 160 oil refineries in the US, BTW.

Just some odd stuff picked up studying the auto industry problems over the last few months. Hope this releaves some of your concerns.

 

Sorry. I dont have much sympathy for them. We have for years been talked down to by thies very company's, with there pious arrogance of what fine engineering they posses. (its NOT a car! Its a Mercedes Benz!) So let them figure it out like everyone els has to. Whats next? (Its not a gas guzzeler! Its a Mercedes Benz!):lmao:

The geniuses in the press like to beat on the domestic's for not anticipating the fuel crisis and stupidly building gas guzzling trucks. Lets see if the same voices jump on the Germans for having no foresight into the obvious future....

 

From where I stand, the Germans have plenty of foresight because they build alot of passenger car diesels. Some of them are even imported to North America, and that's after federalizing them to our much tougher emissions standards. But will people buy a 335d (which looks like a normal 3) over a gasser 3 Series? Or would they rather buy a radical looking Prius, that screams green because of its looks and IMHO, overly complex hybrid powertrain?

Too bad GM and Ford never brought over any of their diesels from Europe, but like the Germans, they just build what the people want, right? And evidently, not many people cared about diesels or hybrids in the '90s, or until gas started getting expensive.

 

BMW is already talking about a 2.0 liter twin turbo engines in both gas and diesel for the US market in the 1 and 3 series. Already on sale in Europe the 320 twin turbo diesel gets something like 46 mpg and has a 0-60 time of about 7.5 sec. The Audi A3 TDI is rated at 42 mpg. I don't think that the Germans will have to merge with anyone. Because of the cost of fuel in EU, they are miles ahead of the US manufacturers in the economical premium compact segment.

 

Because of the cost of fuel in EU, they are miles ahead of the US manufacturers in the economical premium compact segment.

BINGO!
And this is why GM can't afford to lose Opel either. But alas... :sad:

 

The Japanese as well have premium segment diesels as well. The Lexus IS rwd series is available in EU with a clean 2.0 liter turbo diesel and a manual trans that gets close to 40 mpg. All of the compact Japanese pickups have small oil burners. The US actually gets a very limited selection of the good cars from any of the worlds auto manufacturers. Ford and GM even have better cars in their world portfolio than what we see here. Go to any of the auto companies world websites, search by country and you will be amazed at what's out there that we don't get.

 

Fair is fair. I have no sympathy for them.

 

Hopefully this will lead to the demise of a few of them, at the very least I would hope MB to go under for what they did to Chrysler.

 

I wonder if this will prompt them to buy or "partner" with Indian, Chinese or other cheap forgien auto makes to flood the low end of the market in order to make the CAFE number. The law of unintended consiquences is scary.

 

That's actually not at all implausible. Probably no one would have forseen the development of the "luxury truck" in 1975 when the Congress first passed CAFE.

Only thing is, they would have to produce cars that pass muster with NHTSA, and that means you couldn't just send a bunch of Kei cars over from Japan or something.

 

If BMW disappears oh-noes what are the $30k millionaires going to drive then?

:

 

Of course if your diesel is pre Euro 4 you can run it on cooking oil. Therefore a lot of stationary diesel motors (ie standby generators and the like don't need to use "diesel fuel" at all. I am sure McDonalds have a heap of oil to get rid of if it has not already been bought up by an enterprising company or individual.