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German Carmakers

Rev Up Effort to Enter Hybrid Market

<font face="arial, geneva, helvetica" size="2">Amid increasing consumer awareness of global warming and other environmental issues, German carmakers have had to fight off growing criticism about their apparent lack of will to build environmentally friendly cars.</font>

<font face="arial, geneva, helvetica" size="2">Energy-efficient cars have long been the talk of the automotive industry. But while they have been working on improving the mileage that can be gotten out of regular petrol- and diesel-burning engines, German carmakers have yet to produce a hybrid -- a car that combines an electric motor and battery with standard combustion engine in order to cut fuel consumption.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">In fact, Germany trails the world's automakers in terms of environmental developments, according to the German Auto Club (VCD) consumer group. The country only has one entry -- VW's Polo Blue Motion -- in the list of the ten most environmentally friendly cars.&nbsp; Japan leads the pack with its two hybrid cars, the Toyota Prius and the Honda Civic, the group said.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Now, just ahead of the 77th International Motor Show in Geneva, it seems high-end German manufacturers are clamoring to get on the eco-car bandwagon anywhere they can.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Volkswagen presented its super-efficient, ultra-low emission Blue Motion line, and VW and Porsche have announced they are working together on a line of eco-friendly cars to come out by 2008. BMW and Chrysler, meanwhile, announced plans to team up to develop a "mild hybrid" transmission system for rear-wheel-drive premium cars. Even full hybrids might be on the horizon.</font>

<font face="arial, geneva, helvetica" size="2">Emissions battle&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">"We hadn't expected this to become such an emotionally charged issue," said&nbsp; VW CEO Martin Winterkorn, explaining to Der Spiegel magazine why his company was so late to get into the eco-car market. He noted that Audi had tried to bring a hybrid car to market in the 1990s, but it was a flop; the market wasn't yet ripe.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">But the tide has definitely turned, and some observers wonder if the current German effort is too little, too late.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">After all, in recent weeks the industry has spent much of its energy loudly battling the EU over its plan to regulate car emissions. The severe CO2 emissions reduction would have endangered all the best-sellers in the German fleet.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">In the end, the EU called for increased use of bio-fuels and cleaner fossil fuels -- but revised its regulation standards to give the heavy, fast, gas-guzzling German cars more breathing room.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">And until now, the German auto industry had openly dismissed hybrids as a passing fad.&nbsp; But their evident popularity, along with increasing concerns about global warming, seem to have carmakers rethinking earlier assumptions.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Hybrids' success&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Japanese carmaker Toyota, which rolled out its gas-saving Prius hybrid nine years ago, has been cashing in on that move ever since. And the outlook is good in an otherwise stagnant market.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">"Over the next few years we plan to double our hybrid vehicle offering, anticipating annual sales of over one million hybrid vehicles by early in the next decade," Toyota Europe VP Tierry Dombreval told reporters in Geneva.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Meanwhile, other European and US manufacturers have made inroads in creating an eco-friendly image for thesmelves, beating Germany to the punch.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">In September, Citroën and Peugeot introduced eco-cars of their own. Saab's plan for a cabriolet hybrid that can run on pure ethanol as well as classic petrol wowed critics at the Paris Auto Show in September. And US carmaker Ford is promising an expansion of similar "flexifuel" technology, allowing the use of cleaner vegetable based bio-fuels across a whole model range by next year.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Will Germany's relative silence on the subject give consumers the impression that Toyota and other companies care more about the environment than VW, Mercedes, Audi, Porsche&nbsp;at all? Critics think so. And they warn that the German car industry may soon be kicking itself for missed a window of market opportunity.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">Push for diesel&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">But VW's Winterkorn, who used to lead Audi, dismisses this criticism.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">"For years we've been investing billions to reduce fuel consumption with direct-injection diesel and gasoline engines. We reduced weight at Audi with aluminium bodies and at VW with lightweight steel, to name a few examples," he told Der Spiegel.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">So far, the Germans have put most of their environmental energy into developing cleaner diesel fuels and engines. Their hopes were to spark a diesel revolution.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">"Whoever comes out on top in terms of diesel technology is in the best position when it comes to C02 emissions," said Bernd Gottschalk, head of the German Automobile Manufacturers Association.</font>

<font face="arial, geneva, helvetica" size="2">But the push has been largely ignored in the world's largest car market, the US, where essentially only large trucks tend to pump diesel. And critics note that while diesel engines produce less carbon dioxide, they contribute more harmful nitrates to the environment. Hybrids, on the other hand, produce less CO2 and less nitrates as well.&nbsp;</font>

<font face="arial, geneva, helvetica" size="2">According to Gottschalk, the fact that German manufacturers have presented plans for more fuel-efficient, low-emission cars in Geneva "proves that we didn't just start developing environmentally friendly cars today, and that we aren't only interested in the premium car segment."</font>

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