BMW Fined for violating CAFE standards...
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2nd Gear
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From: Lost Angels
BMW Fined for violating CAFE standards...
Cost of Doing Business: BMW pays record CAFE penalties
HARRY STOFFER | Automotive News
Posted Date: 9/20/04
[size=2]WASHINGTON -- BMW's rise in the United States has come with a cost: record fines for violating U.S. fuel economy standards.
BMW North America Inc. paid more than $42 million in fines during the government's 2003 fiscal year. That year ran from Oct. 1, 2002, to Sept. 30, 2003.
The fines will be reported when the National Highway Traffic Safety Administration issues its next annual report on the corporate average fuel economy program, or CAFE.
The figure represents penalties of $14 million for BMW's 2002 model-year cars and $28 million for 2001, the automaker confirms. BMW had the option of paying both years' fines in a single federal fiscal year.
Porsche Cars North America Inc. paid the second-largest fine in 2001: $5 million.
BMW's 2001 fine amounted to about $137 per car sold during that model year.
For model years 1998 through 2002, BMW paid CAFE fines of about $96 million. That's more than double the $43 million the automaker was penalized for the previous five model years. Figures for the 2003 model year are not available.
NHTSA records indicate that the $28 million payment is the highest by any automaker in a year, although inflation adjustments would make it smaller than some in past years.
The previous largest payment was $20.5 million from Mercedes-Benz USA Inc. for 1987.
BMW is among a handful of companies that have accepted CAFE fines as a cost of doing business. The Big 3 say meeting CAFE standards is part of good corporate citizenship.
BMW spokesman Gordon Keil says the automaker builds "the cars our customers want to buy."
Fast cars with superb handling and luxury features weigh more and use more fuel, Keil says. "If there are penalties, so be it," he says.
Others are discarding that view.
After Daimler-Benz AG bought out Chrysler Corp. in 1998, executives said they intended to have their combined fleet meet CAFE standards. NHTSA records show they are getting close.
DaimlerChrysler told NHTSA it expected its imported cars, mostly Mercedes-Benz models, to average 27.1 mpg in the 2004 model year. That would fall just short of the 27.5 mpg standard for cars.
Dennis Fitzgibbons, DaimlerChrysler's executive director of public policy, says the automaker has not owed CAFE fines since the 2000 model year. It has taken advantage of various credit provisions in the program. And its stake in Mitsubishi Motors Corp. has enabled it since 2001 to use Mitsubishi CAFE numbers to offset Mercedes shortfalls in calculating the performance of its import fleet.
BMW does not make the least fuel-efficient vehicles. But a limited product mix and rising sales create conditions for the penalty.
In 2001, the year of the $28 million fine, BMW sold about 204,000 cars that averaged 25.0 mpg.
In 1997, when the automaker was fined $11.8 million, its fleet average was better at 25.7 mpg.
BMW sold 131,000 cars in the United States that year, NHTSA records show.
The fine is $5.50 for each 0.1 mpg below the car standard of 27.5 mpg, multiplied by sales.
BMW's trucks, mainly the X5 SUV, have been close to the truck standard of 20.7 mpg.
Its truck sales are more modest - about 42,000 last year.
HARRY STOFFER | Automotive News
Posted Date: 9/20/04
[size=2]WASHINGTON -- BMW's rise in the United States has come with a cost: record fines for violating U.S. fuel economy standards.
BMW North America Inc. paid more than $42 million in fines during the government's 2003 fiscal year. That year ran from Oct. 1, 2002, to Sept. 30, 2003.
The fines will be reported when the National Highway Traffic Safety Administration issues its next annual report on the corporate average fuel economy program, or CAFE.
The figure represents penalties of $14 million for BMW's 2002 model-year cars and $28 million for 2001, the automaker confirms. BMW had the option of paying both years' fines in a single federal fiscal year.
Porsche Cars North America Inc. paid the second-largest fine in 2001: $5 million.
BMW's 2001 fine amounted to about $137 per car sold during that model year.
For model years 1998 through 2002, BMW paid CAFE fines of about $96 million. That's more than double the $43 million the automaker was penalized for the previous five model years. Figures for the 2003 model year are not available.
NHTSA records indicate that the $28 million payment is the highest by any automaker in a year, although inflation adjustments would make it smaller than some in past years.
The previous largest payment was $20.5 million from Mercedes-Benz USA Inc. for 1987.
BMW is among a handful of companies that have accepted CAFE fines as a cost of doing business. The Big 3 say meeting CAFE standards is part of good corporate citizenship.
BMW spokesman Gordon Keil says the automaker builds "the cars our customers want to buy."
Fast cars with superb handling and luxury features weigh more and use more fuel, Keil says. "If there are penalties, so be it," he says.
Others are discarding that view.
After Daimler-Benz AG bought out Chrysler Corp. in 1998, executives said they intended to have their combined fleet meet CAFE standards. NHTSA records show they are getting close.
DaimlerChrysler told NHTSA it expected its imported cars, mostly Mercedes-Benz models, to average 27.1 mpg in the 2004 model year. That would fall just short of the 27.5 mpg standard for cars.
Dennis Fitzgibbons, DaimlerChrysler's executive director of public policy, says the automaker has not owed CAFE fines since the 2000 model year. It has taken advantage of various credit provisions in the program. And its stake in Mitsubishi Motors Corp. has enabled it since 2001 to use Mitsubishi CAFE numbers to offset Mercedes shortfalls in calculating the performance of its import fleet.
BMW does not make the least fuel-efficient vehicles. But a limited product mix and rising sales create conditions for the penalty.
In 2001, the year of the $28 million fine, BMW sold about 204,000 cars that averaged 25.0 mpg.
In 1997, when the automaker was fined $11.8 million, its fleet average was better at 25.7 mpg.
BMW sold 131,000 cars in the United States that year, NHTSA records show.
The fine is $5.50 for each 0.1 mpg below the car standard of 27.5 mpg, multiplied by sales.
BMW's trucks, mainly the X5 SUV, have been close to the truck standard of 20.7 mpg.
Its truck sales are more modest - about 42,000 last year.
6th Gear
Joined: Jan 2003
Posts: 1,816
Likes: 2
From: New Jersey
"Cost of doing business" means the fines arent high enough. Thats just silly. If the manufacturer can simply add the fine into the MSRP of the vehicle, what good is it doing? Shame on the lawmakers and shame on BMW.
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Cheese
pug poo picker-upper
Joined: Jun 2002
Posts: 9,803
Likes: 30
From: California
1) BMW is only working with the system, accepting the CAFE fines, and passing those fines along to their customers. It's a legal alternative to compliance and I'm sure every manufacturer has done the same calculation.
2) The troubling part is that a lot of manufacturers (big 3 for instance) are able to meet CAFE standards because half of their fleet is classified as light trucks and therefore not subject to the same standards.
CAFE fines and the "light truck" classification are two loopholes that need to be closed.
2) The troubling part is that a lot of manufacturers (big 3 for instance) are able to meet CAFE standards because half of their fleet is classified as light trucks and therefore not subject to the same standards.
CAFE fines and the "light truck" classification are two loopholes that need to be closed.
6th Gear
Joined: Jul 2002
Posts: 4,293
Likes: 2
From: Cincinnati, Ohio
BMW spokesman Gordon Keil says the automaker builds "the cars our customers want to buy."
Hey, Gordo! How bout dropping one of those 5.0 litre V-10's from your new M5 into the next generation of the MCS. Your customers want to buy it, and we'd gladly pay the CAFE fine for the privilege.
Do I hear any comments to the contrary from other customers? Didn't think so!
Hey, Gordo! How bout dropping one of those 5.0 litre V-10's from your new M5 into the next generation of the MCS. Your customers want to buy it, and we'd gladly pay the CAFE fine for the privilege.
Do I hear any comments to the contrary from other customers? Didn't think so!
6th Gear
Joined: Oct 2002
Posts: 3,652
Likes: 6
From: Lansdale, PA
GM uses some pretty sketchy technology to achieve fuel economy goals (witness the annoying skip-shift in their 6-speed manuals that forces the shifter from 1st to 4th instead of 1st to 2nd under most driving conditions). I'd rather have a proper shifter even if it resulted in slightly lower EPA figures.
5th Gear
Joined: Jun 2002
Posts: 650
Likes: 0
Originally Posted by DiD
1) BMW is only working with the system, accepting the CAFE fines, and passing those fines along to their customers. It's a legal alternative to compliance and I'm sure every manufacturer has done the same calculation.
2) The troubling part is that a lot of manufacturers (big 3 for instance) are able to meet CAFE standards because half of their fleet is classified as light trucks and therefore not subject to the same standards.
CAFE fines and the "light truck" classification are two loopholes that need to be closed.
2) The troubling part is that a lot of manufacturers (big 3 for instance) are able to meet CAFE standards because half of their fleet is classified as light trucks and therefore not subject to the same standards.
CAFE fines and the "light truck" classification are two loopholes that need to be closed.
My wife has a 2004 325Ci and we're disappointed with the gas mileage, especially around town.
I think ALL models a manufacturer makes should be counted towards the CAFE standard. To be fair, I'd be willing to lower the average MPG a little bit to account for all those uber-thirsty SUV's and such. No doubt the Domestics would still be in BIG trouble, since they rely on half (or more) of their models being exempt!
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4th Gear
Joined: Jun 2003
Posts: 362
Likes: 0
A decade ago, BMW used to import 318i's. I'm sure those cars are very fuel efficient. Guess what? No one wanted to buy them, so BMW doesn't import those small-engined 3 series anymore. BMW imports what customers want, and customers want cars with high horsepower.
To BMW's credit, for a given horsepower and vehicle weight, their cars are very fuel efficient. Compare the 3 series, say a 330i, to the Lexus IS300. Both cars are about 3250lbs. The 330i accelerates from 0-60 in about 6.5 seconds, while the IS300 accelerates from 0-60 in a bit more than 7 seconds. 330i's EPA mileage rating is 20/29, while the IS300's EPA mileage rating is 18/24. (I got those from memory, so the numbers could be a bit off, but they should be close). For the same vehicle weight, the BMW not only accelerates faster, but also burns less fuel. Yet BMW is the one being fined. Toyota have a lot of Echos and Scions to offset their corporate fuel economy numbers. BMW doesn't import as many MINIs into America to bring down their fuel economy average.
To BMW's credit, for a given horsepower and vehicle weight, their cars are very fuel efficient. Compare the 3 series, say a 330i, to the Lexus IS300. Both cars are about 3250lbs. The 330i accelerates from 0-60 in about 6.5 seconds, while the IS300 accelerates from 0-60 in a bit more than 7 seconds. 330i's EPA mileage rating is 20/29, while the IS300's EPA mileage rating is 18/24. (I got those from memory, so the numbers could be a bit off, but they should be close). For the same vehicle weight, the BMW not only accelerates faster, but also burns less fuel. Yet BMW is the one being fined. Toyota have a lot of Echos and Scions to offset their corporate fuel economy numbers. BMW doesn't import as many MINIs into America to bring down their fuel economy average.
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