U.S. policy change spurs carmakers to raise fuel efficiency

Fuel efficiency is once again the hottest topic in the world`s automotive industry as the United States has decided to significantly raise its automobile fuel economy and emissions standards by 2016.

According to the plans, new passenger cars will be required to get 39 mile per gallon or 16.5 kilometers per liter, while the corporate average fuel economy of light trucks will have to be raised to 30 mile per gallon, 12.7 kilometers per liter, by 2016. The corporate average fuel economy is an average derived from the fuel economy of each model and the number sold.



In addition, the Unites States automobile emissions are set to be reduced by 30 percent by the same year.

The United States is the single largest importer of Korean automobiles. As such, any changes in U.S. automobile policies has significant implications for local carmakers. According to the Korea Automobile Manufacturers Association, 23.7 percent of vehicles exported from Korea during the first four months of the year were shipped to the United States.

In order to respond to such changes, experts say that Hyundai Kia Automotive Group -- which accounts for more than 70 percent of Korea`s auto exports -- needs to produce energy efficient compact cars such as the Forte and Avante at its U.S. plants. Experts say that the group should compete with Japanese firms with such high fuel-efficiency vehicles in the U.S. market for the near future and then focus on hybrid electric vehicles.

At present, local carmakers still have ways to go if they are to meet the new standards.

According to the U.S. Department of Transportation, the corporate average fuel economy of Hyundai Motor Co. 2009 model year passenger cars is 33.2 miles per gallon, while that of Kia Motors Corp.`s is 33.7 miles per gallon. Both carmakers currently fall short of the 2016 target by about 15 to 17 percent. The average fuel economies of the two firms` 2009 light trucks fall short of the target by slightly larger margins of 16 to 23 percent.

However, local firms are not alone in needing to improve fuel economies, and with only Japan`s big three carmakers -- Honda, Nissan and Toyota -- currently having higher corporate average fuel economies, local carmakers may be in a better position than most to meet the targets.

"About 20 percent of Hyundai Motor and Kia Motors` sales in the United States are compact and smaller vehicles that are more fuel efficient," said a Hyundai Motor official.

"Some of our vehicles exported to the Unites States already meet the fuel economy targets set for 2016 and at the current rate of improvement we are unlikely to experience problems in meeting the targets."

By Choi He-suk



(cheesuk@heraldm.com)