80 MPG Ford Fiesta Set To Go On Sale

I follow the auto industry quite closely as one probably realizes given the number of posts on the topic. I worked at GM early in my life and have a fairly detailed knowledge of the industry. As someone who has run a large business and is maniacal about business best practices, I see the American automakers for what they have been for decades but are becoming less of : insular, arrogant oligopolies resistant to change.

Recently it seems a chorus of auto makers have started whining about the new mileage standards in the U.S. Even Toyota has joined the fray. That's not really a surprise given Toyota's risks with a product line full of gas guzzling vehicles. BMW is the latest to join the chorus of whining. The general argument is that the standards are too aggressive and some even say they aren't achievable. That seems quite ironic given Japan and Europe already have stringent mileage standards similar to what the U.S. will adopt over the coming decade. We won't see any more Crown Victorias or other monstrosities but automakers will find a way to produce vehicles larger than tin cans.

There are two points of view in this debate. One is that the market should determine what automakers produce. A more valid perspective today but one that was completely invalid decades ago when American oligopolies 'fed' Americans whatever they wanted. That included some of the worst garbage passed off as vehicles one could imagine. The other is that efficiency is a national security issue and if the government had adopted such aggressive standards some time ago, Americans would not be suffering with $4 gasoline. And, automakers wouldn't be looking at possible bankruptcy or bailouts because they would be producing vehicles consumers now want. We might not also be losing trillions of dollars to a war in the Middle East as well. In fact, we might not even have $4 gasoline. So which is it?

The government already sets minimum efficiency ratings in many markets other than vehicles yet no one is complaining. But then those markets don't have enormous and vocal lobbying efforts either. Do you want a mandated government policy or do you want automakers to decide? I don't care because we'll probably get to the same end state regardless. That said, we've let "the markets" attempt to deal with vehicle efficiency for the last thirty plus years and it has generally been a complete failure. I wrote some time ago the Chevette in 1975 and 1985 got better EPA validated mileage than most any car sold in the U.S. today. Most of the efficient vehicles sold in North America today originate from markets where government has forced higher efficiency standards. Forcing efficiency without involvement in the production of these markets is an acceptable government policy from my perspective.

The reality is the new mileage standards are easily achievable. Courtesy of Auto Express, Ford is now releasing a Fiesta in Europe that will get nearly 80 miles per gallon on the highway and 62 miles per gallon combined. The noxious emissions footprint is also extremely low. Nothing sold in the U.S. comes close. It's not a hybrid either. Ford would be selling these like hotcakes were they available in the U.S. Well, get ready because some version of this car is coming here. Maybe not the diesel version in the first iteration but automaker business plans are changing rapidly so one can never say never.

Some Americans might need to cut back on their caloric intake to get into smaller cars but, hey, how is that bad? An unintended consequence might be smaller derrieres.