'We are on the threshold of a major change and this is going to be very expensive', says the GM boss .
It sits pretty, with fake leopard-skin livery, in the middle of one of the main halls at the annual international motor show, surrounded by the latest sleek and powerful products of the global auto industry.
The tiny Greeny AC1, made by Reva, is an all-electric urban car costing €17,500 and just one example of the "green" cars that are rolling out of car-plants around the world. The industry has woken up to and acknowledged climate change.
The tiny Greeny AC1, made by Reva, is an all-electric urban car costing €17,500 and just one example of the "green" cars that are rolling out of car-plants around the world. The industry has woken up to and acknowledged climate change.
The obsessive topic of every conversation here is the proposal by Stavros Dimas, EU environment commissioner, for legislation to limit CO2 emissions by all new cars to 120 grammes by 2012 – and, frankly, how it can be fought, circumvented, delayed. But it's not the ghost of Stavros that's present in every makeshift meeting room on the manufacturers' stands. A keen awareness that fossil fuel reserves are finite and oil may run out faster than anticipated is also prompting car-makers to club together to develop alternative technologies that employ "green" fuels: hybrids, of course, but also micro-hybrids that recharge the battery when you brake and stop the engine when you are at the lights, hydrogen-based fuel cells, bio-ethanol (E85) that mixes up to 85% of ethanol with petrol/diesel.
Rick Wagoner, chief executive of General Motors, is convinced that the days of the century-old internal combustion engine are not numbered but says: "We are on the threshold of a major change and we will be moving to ethanol, electrics, hybrids, fuel-cells and this is going to be an expensive, very expensive proposition. So you are going to see manufacturers working together – it could be supply agreements and it could be mergers if the case is big enough."
John Fleming, head of Ford Europe, which claims to be the European leader in so-called flexi-fuels (mainly E85), adds: "We are spending a huge amount of time thinking about climate change and making sure we are developing the right technologies ... It won't be one technology that wins because there are different technologies needed in different segments of the market."
Rick Wagoner, chief executive of General Motors, is convinced that the days of the century-old internal combustion engine are not numbered but says: "We are on the threshold of a major change and we will be moving to ethanol, electrics, hybrids, fuel-cells and this is going to be an expensive, very expensive proposition. So you are going to see manufacturers working together – it could be supply agreements and it could be mergers if the case is big enough."
John Fleming, head of Ford Europe, which claims to be the European leader in so-called flexi-fuels (mainly E85), adds: "We are spending a huge amount of time thinking about climate change and making sure we are developing the right technologies ... It won't be one technology that wins because there are different technologies needed in different segments of the market."
GM head-to-head with Toyota
This year the Japanese group is expected to overtake its American rival and become the world's biggest car-maker with sales close to 10m, its phenomenal growth driven by its green image as much as by quality and reliability. In Europe, according to Tokuichi Uranishi, head of global planning and overseas operations, Toyota will surpass its 2010 goal of selling 1.2m vehicles three years ahead of schedule with around 1.22m this year. He won't say what the new 2010 target will be, smiling broadly when you suggest it could be 1.5m or even higher.
But Uranishi says in an interview that the Dimas proposals are already prompting Toyota to think of changing its model-mix in Europe. "We will have to think of selling more of the vehicles that have good CO2 performance and maybe rethink our model plans and plant capacities," he says, indicating that the Japanese group could bring forward its plans for a new low-cost car – a greener rival to Renault's Romanian-made Logan that has a basic selling price of just €5,000.
He won't say, too, where the car – originally destined for emerging markets only - will be built but hints that it could be in a new European plant. Toyota has plants in Britain, France, Turkey and the Czech Republic where it shares the facilities for its Aygo with Peugeot-Citroen – and its Russian factory starts up this year. But GM, finally making money in Europe, and other rivals are taking up the Toyota green challenge.
Wagoner, whose GM collaborates with BMW and DaimlerChrysler on developing hybrid engines, is investing heavily in bio-ethanol, George Bush's favourite fuel to end America's "addiction" to oil imports, and plans to introduce a demonstration fleet of 10 fuel-cell vehicles in Europe in early 2008. The Chevrolet Volt, unveiled at the Detroit motor show in early January, is due to go into production in 2010: it's powered by E-Flex, GM's new electric propulsion system that can use power from a hydrogen fuel-cell, or from an engine running on bio-ethanol/diesel, or from being plugged into the grid – provided, in the latter case, the electricity is generated from renewable sources.
"I'm not saying we will win in every category but we will certainly try. Can we play on their (Toyota's) field, yes, we can ... We think there's a business opportunity and a business imperative and we have got the muscle and the capability and I don't think any other single manufacturer can run across so many bases," he says defiantly for a man still in the throes of turning around huge losses in 2005. And, for good measure, he sticks the knife into Toyota – pointing out that it is introducing a heavy pick-up in the US which is far less fuel-efficient than GM's own.
But will consumers buy them?
The industry is holding a gun to the head of Stavros, pointing out that consumers won't buy these expensive new green cars unless the EU and its 27 national governments agree on fiscal and other incentives to switch from traditional gas-guzzlers and that, taken on their own, his proposals would add up to €4,000 to the cost of a new car. The hybrids produced by Toyota and Honda are already so expensive that only 40,000 were sold in Europe last year compared with a quarter of a million in the US.
Uranishi, whose Toyota sold some 36,000 hybrids in Europe, mainly its Prius model, says his group is trying to cut prices but: "Unless there's some kind of economic or fiscal incentives people probably would not want to pay more." He cites zero registration or licence duties and congestion charges as examples.
Jonathan Browning, head of Vauxhall, GM's British arm, cites the Swedish model as the best example to follow, with E85 25% cheaper at the pump than petrol under government legislation which also ensures half of the state's own fleet is eco-friendly, company cars pay 20% less tax and flexi-fuel cars get free parking. Without such incentives, he says, "there's very little demand for the incremental ability to meet another level of emissions compliance".
Uranishi, whose Toyota sold some 36,000 hybrids in Europe, mainly its Prius model, says his group is trying to cut prices but: "Unless there's some kind of economic or fiscal incentives people probably would not want to pay more." He cites zero registration or licence duties and congestion charges as examples.
Jonathan Browning, head of Vauxhall, GM's British arm, cites the Swedish model as the best example to follow, with E85 25% cheaper at the pump than petrol under government legislation which also ensures half of the state's own fleet is eco-friendly, company cars pay 20% less tax and flexi-fuel cars get free parking. Without such incentives, he says, "there's very little demand for the incremental ability to meet another level of emissions compliance".
Source: The Guardian
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