[Federal Register Volume 60, Number 63 (Monday, April 3, 1995)]
[Notices]
[Pages 16902-16916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7428]



-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration


Automotive Fuel Economy Program Report to Congress

    The attached document, Automotive Fuel Economy Program, Nineteenth 
Annual Report to the Congress, was prepared pursuant to 49 U.S.C. 32916 
which requires in pertinent part that ``the Secretary shall submit to 
each House of Congress, and publish in the Federal Register, a review 
of average fuel economy standards under this part.''

     [[Page 16903]] Issued: March 20, 1995.
Barry Felrice,
Associate Administrator for Safety Performance Standards.

Automotive Fuel Economy Program

Nineteenth Annual Report to Congress

Calendar Year 1994

Table of Contents

Section I: Introduction
Section II: Fuel Economy Improvement by Manufacturers
Section III: 1994 Activities
    A. Passenger Car CAFE Standards
    B. Light Truck CAFE Standards
    C. Low Volume Petitions
    D. Enforcement
    E. Partnership for a New Generation of Vehicles
    F. Advisory Committee on Personal Motor Vehicle Greenhouse Gas 
Reductions
    G. General Agreement on Tariffs and Trade (GATT) Decision
Section IV: Use of Advanced Technology
    A. New Models
    B. Engine and Transmission Technology
    C. Electronics
    D. Materials
    E. Summary
Section I: Introduction

    The Nineteenth Annual Report to Congress on Automotive Fuel 
Economy Program summarizes the activities of the National Highway 
Traffic Safety Administration (NHTSA) during 1994, in accordance 
with 49 U.S.C. 32916 et seq., which requires the submission of a 
report each year. Included in this report are sections summarizing 
rulemaking activities during 1994 and a discussion of the use of 
advanced automotive technology by the industry as required by 
section 305, Title III, of the Department of Energy Act of 1978 
(Pub. L. 95-238).
    The Secretary of Transportation is required to administer a 
program for regulating the fuel economy of new passenger cars and 
light trucks in the United States market. The authority to 
administer the program was delegated by the Secretary to the 
Administrator of NHTSA, 49 CFR 1.50(f).
    NHTSA's responsibilities in the fuel economy area include:
    (1) Establishing and amending average fuel economy standards for 
manufacturers of passenger cars and light trucks, as necessary;
    (2) Promulgating regulations concerning procedures, definitions, 
and reports necessary to support the fuel economy standards;
    (3) Considering petitions for exemption from established fuel 
economy standards by low volume manufacturers (those producing fewer 
than 10,000 passenger cars annually worldwide) and establishing 
alternative standards for them;
    (4) Preparing reports to Congress annually on the fuel economy 
program;
    (5) Enforcing fuel economy standards and regulations; and
    (6) Responding to petitions concerning domestic production by 
foreign manufacturers and other matters.
    Passenger car fuel economy standards were established by 
Congress for Model Year (MY) 1985 and thereafter at a level of 27.5 
miles per gallon (mpg). NHTSA is authorized to amend the standard 
above or below that level. Standards for light trucks were 
established by NHTSA for MYs 1979 through 1997. NHTSA set a combined 
standard of 20.7 mpg for light truck fuel economy standard for MYs 
1996 and 1997. All current standards are listed in Table I-1.

 Table I-1.--Fuel Economy Standards for Passenger Cars and Light Trucks 
                 Model Years 1978 through 1997 (in MPG)                 
------------------------------------------------------------------------
                                             Light trucks\1\            
                    Passenger  -----------------------------------------
    Model year         cars      Two-wheel    Four-wheel                
                                   drive        drive     Combined\2\\3\
------------------------------------------------------------------------
1978.............      \4\18.0                                          
1979.............      \4\19.0         17.2         15.8                
1980.............      \4\20.0         16.0         14.0            \5\ 
1981.............         22.0      \6\16.7         15.0            \5\ 
1982.............         24.0         18.0         16.0           17.5 
1983.............         26.0         19.5         17.5           19.0 
1984.............         27.0         20.3         18.5           20.0 
1985.............      \4\27.5      \7\19.7      \7\18.9        \7\19.5 
1986.............      \8\26.0         20.5         19.5           20.0 
1987.............      \9\26.0         21.0         19.5           20.5 
1988.............      \9\26.0         21.0         19.5           20.5 
1989.............     \10\26.5         21.5         19.0           20.5 
1990.............      \4\27.5         20.5         19.0           20.0 
1991.............      \4\27.5         20.7         19.1           20.2 
1992.............      \4\27.5                                     20.2 
1993.............      \4\27.5                                     20.4 
1994.............      \4\27.5                                     20.5 
1995.............      \4\27.5                                     20.6 
1996.............      \4\27.5                                     20.7 
1997.............      \4\27.5                                     20.7 
------------------------------------------------------------------------
\1\Standards for MY 1979 light trucks were established for vehicles with
  a gross vehicle weight rating (GVWR) of 6,000 pounds or less.         
  Standards for MY 1980 and beyond are for light trucks with a GVWR of  
  8,500 pounds or less.                                                 
\2\For MY 1979, light truck manufacturers could comply separately with  
  standards for four-wheel drive, general utility vehicles and all other
  light trucks, or combine their trucks into a single fleet and comply  
  with the 17.2 mpg standard.                                           
\3\For MYs 1982-1991, manufacturers could comply with the two-wheel and 
  four-wheel drive standards or could combine all light trucks and      
  comply with the combined standard.                                    
\4\Established by Congress in Title V of the Act.                       
\5\A manufacturer whose light truck fleet was powered exclusively by    
  basic engines which were not also used in passenger cars could meet   
  standards of 14 mpg and 14.5 mpg in MYs 1980 and 1981, respectively.  
\6\Revised in June 1979 from 18.0 mpg.                                  
\7\Revised in October 1984 from 21.6 mpg for two-wheel drive, 19.0 mpg  
  for four-wheel drive, and 21.0 mpg for combined.                      
\8\Revised in October 1985 from 27.5 mpg.                               
\9\Revised in October 1986 from 27.5 mpg.                               
\10\Revised in September 1988 from 27.5 mpg.                            


[[Page 16904]]

Section II: Fuel Economy Improvement by Manufacturers

    The fuel economy achievements for domestic and foreign 
manufacturers in MY 1993 were updated to include final Environmental 
Protection Agency (EPA) calculations, where available, since the 
publication of the Eighteenth Annual Report to the Congress. These 
fuel economy achievements and current projected data for MY 1994 are 
listed in Tables II-1 and II-2.
    Overall fleet fuel economy for passenger cars was 28.2 mpg in MY 
1994, a decline of 0.2 mpg from the MY 1993 level. For MY 1994, CAFE 
values decreased below MY 1993 levels for 14 of 22 passenger car 
manufacturers' fleets. (See Table II-1). These 14 companies 
accounted for over 44 percent of the total MY 1994 production. 
Manufacturers continued to introduce new technologies and more fuel-
efficient models, as well as some larger, less fuel-efficient 
models. For MY 1994, the overall domestic manufacturers' fleet 
average fuel economy was 27.3 mpg. For MY 1994, Chrysler, Ford, and 
Mazda domestic passenger car CAFE values fell 1.6 mpg, 0.7 mpg, and 
0.6 mpg, respectively, from their 1993 levels, while GM remained at 
its MY 1993 level. Overall, the domestic manufacturers' combined 
CAFE declined 0.5 mpg below MY 1993 levels.

  Table II-1.--Passenger Car Fuel Economy Performance by Manufacturer*  
                       [Model Years 1993 and 1994]                      
------------------------------------------------------------------------
                                                         Model year cafe
                                                              (mpg)     
                     Manufacturer                      -----------------
                                                          1993     1994 
------------------------------------------------------------------------
Domestic:                                                               
    Chrysler..........................................     27.8     26.2
    Ford..............................................     28.3     27.6
    GM................................................     27.4     27.4
    Mazda.............................................     29.7     29.1
      Sales weighted average (domestic)...............     27.8     27.3
Imported:                                                               
    BMW...............................................     25.2     25.1
    Chrysler Imports..................................     31.0     31.3
    Fiat..............................................     23.9     19.8
    Ford Imports......................................     26.7     25.7
    GM Imports........................................     30.5     24.6
    Honda.............................................     32.5     32.5
    Hyundai...........................................     31.3     32.5
    Isuzu.............................................     33.0  .......
    Kia...............................................     31.7     30.8
    Mazda.............................................     31.0     31.2
    Mercedes-Benz.....................................     22.9     23.8
    Mitsubishi........................................     29.4     28.9
    Nissan............................................     29.4     29.7
    Porsche...........................................     22.5     22.0
    Subaru............................................     29.3     28.3
    Suzuki............................................     46.4     43.8
    Toyota............................................     29.1     29.0
    Volvo.............................................     25.9     25.7
    VW................................................     27.2     28.1
      Sales weighted average (imported)...............     29.6     29.6
        Total fleet average...........................     28.4     28.2
        Fuel economy standards........................     27.5     27.5
------------------------------------------------------------------------
*Manufacturers or importers of fewer than 1,000 passenger cars annually 
  are not listed.                                                       
                                                                        
Note: Some MY 1993 CAFE values differ from those used in the Eighteenth 
  Annual Report to the Congress due to the use of final EPA             
  calculations.                                                         

    In MY 1994, the fleet average fuel economy for imported 
passenger cars remained at the MY 1993 CAFE level. Import CAFE was 
29.6 mpg in MY 1994. Eleven of the 19 imported car manufacturers 
decreased their CAFE values between MYs 1993 and 1994, including 5 
of the 9 Asian importers. Figure II-1 illustrates the changes in 
total new passenger car fleet CAFE from MY 1978 to MY 1994.
    The total light truck fleet CAFE decreased 0.3 mpg below the MY 
1993 CAFE level of 20.9 mpg. Figure II-2 illustrates the trends in 
total fleet CAFE from MY 1979 to MY 1994 for light trucks.
    A number of passenger car and a few light truck manufacturers 
are projected to fail to achieve the levels of the MY 1994 CAFE 
standards. However, NHTSA is not yet able to determine which of 
these manufacturers may be liable for civil penalties for 
noncompliance. Some MY 1994 CAFE values may change when final 
figures are provided to NHTSA by EPA, in mid-1995. In addition, 
several manufacturers are not expected to pay civil penalties 
because the credits they earned by exceeding the fuel economy 
standards in earlier years offset later shortfalls. Other 
manufacturers may file carryback plans to demonstrate that they 
anticipate earning credits in future model years to offset current 
deficits.

                                                                        
[[Page 16905]]
    Table II-2.--Light Truck Fuel Economy Performance by Manufacturer   
                       [Model years 1993 and 1994]                      
------------------------------------------------------------------------
                                                         Model year cafe
                                                              (mpg)     
                                                       -----------------
                     Manufacturer                           Combined    
                                                       -----------------
                                                          1993     1994 
------------------------------------------------------------------------
Captive Import:                                                         
    Chrysler Imports..................................     24.3  .......
Others:                                                                 
    Chrysler..........................................     21.2     20.5
    Ford..............................................     20.9     20.8
    GM................................................     19.8     19.9
    Isuzu.............................................     21.8     20.8
    Mazda.............................................     23.6     21.2
    Mitsubishi........................................     21.3     22.0
    Nissan............................................     23.7     22.5
    PAS...............................................     18.5  .......
    Land Rover........................................     15.5     16.4
    Subaru............................................     29.1     29.6
    Suzuki............................................     28.9     28.5
    Toyota............................................     22.3     22.0
    UMC...............................................     18.8     18.5
    VW................................................     21.0     21.0
                                                       -----------------
      Total fleet average.............................     20.9     20.6
      Fuel economy standard...........................     20.4     20.5
------------------------------------------------------------------------
Note: Some MY 1993 CAFE values differ from those used in the Eighteenth 
  Annual Report to the Congress due to the use of final EPA             
  calculations.                                                         

  Fleet average fuel economy for all MY 1994 passenger cars 
combined and for all light trucks combined exceeded the levels of 
the MY 1994 standards.

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    [[Page 16908]] Isuzu terminated sales of its passenger cars in 
the United States after MY 1993; however, the manufacturer continues 
to sell its light trucks. Isuzu accumulated substantial CAFE credits 
during its 13-year marketing span of its passenger cars in the 
United States, but these vehicles sales reached such a low level 
that it apparently decided it was economically infeasible for their 
passenger cars to remain.
    The characteristics of the MY 1994 passenger car fleet reflect a 
continuing trend toward increased consumer demand for higher 
performance cars. (See Table II-3.) From MY 1993 to MY 1994, 
horsepower/100 pounds, a measure of vehicle performance, increased 
from 4.56 to 4.79 for domestic passenger cars. However, it decreased 
slightly from 4.72 to 4.71 for imported passenger cars. The total 
fleet average for passenger cars increased from 4.62 in MY 1993 to 
4.76 horsepower/100 pounds in MY 1994, the highest level in the 38 
years for which the agency has data. Compared to MY 1993, the 
average curb weight for MY 1994 increased 52 pounds for the domestic 
fleet and 23 pounds for the imported fleet. The total new passenger 
car fleet is 41 pounds heavier than it was in MY 1993, primarily 
because of the larger share held by the domestic fleet. Average 
engine displacement increased from 184 to 188 cubic inches for 
domestic passenger cars and 136 to 137 cubic inches for imported 
passenger cars.
    The 0.5 mpg fuel economy reduction for the MY 1994 domestic 
passenger car fleet may be attributed to increases in performance 
and average curb weight. Some of the weight increase reflects 
increased applications of safety features such as airbags, improved 
side impact protection, and antilock braking systems.
    The size class breakdown shows an increased trend towards 
subcompact, compact, and large passenger cars and a decrease in two-
seater, minicompact, and midsize passenger cars for the overall 
fleet. The domestic fleet shift is from midsize passenger cars to 
subcompact, compact, and large passenger cars. The shift of imported 
cars to compact size is particularly pronounced; compact cars 
increased to 41.6 percent of the imported fleet in MY 1994 from just 
36.6 percent in MY 1993. The imported share of the passenger car 
market declined slightly in MY 1994. However, for the fifth 
consecutive year, imports exceeded 40 percent of the new passenger 
car fleet.
    The domestic fleet had a dramatic decrease in share of 
turbocharged and supercharged engines. Diesel engines declined in 
share after a small increase in MY 1993. Diesel engines were offered 
only on certain Mercedes models during MY 1994.

                     Table II-3.--Passenger Car Fleet Characteristics for MYs 1993 and 1994                     
----------------------------------------------------------------------------------------------------------------
                                                               Total fleet     Domestic fleet    Imported fleet 
                      Characteristics                      -----------------------------------------------------
                                                              1993     1994     1993     1994     1993     1994 
----------------------------------------------------------------------------------------------------------------
    Fleet average fuel economy, mpg.......................     28.4     28.2     27.8     27.3     29.6     29.6
    Fleet average curb weight, lbs........................     2971     3012     3046     3098     2861     2884
    Fleet average engine displacement, cu. in.............      164      167      184      188      136      137
    Fleet average horsepower/weight ratio, hp/100 lbs.....     4.62     4.76     4.56     4.79     4.72     4.71
    Percent of fleet......................................      100      100     59.4     59.8     40.6     40.2
Segmentation by EPA size class, Percent:                                                                        
    Two-seater............................................      1.4      1.2      0.5      0.5      2.8      2.1
    Minicompact...........................................      1.0      0.3      0.0      0.0      2.4      0.7
    Subcompact*...........................................     23.0     23.4     14.4     17.0     35.4     32.8
    Compact*..............................................     33.7     36.0     31.7     32.2     36.6     41.6
    Mid-size*.............................................     29.4     25.6     37.8     31.2     17.2     17.3
    Large*................................................     11.5     13.6     15.6     19.1      5.6      5.5
    Percent diesel engines................................     0.04     0.01      0.0      0.0      0.9     0.02
    Percent turbo or supercharged engines.................      1.1      0.9      0.5      0.4      1.9      1.7
    Percent fuel injection................................      100      100      100      100      100      100
    Percent front-wheel drive.............................     84.4     83.9     86.0     83.6     82.1     84.4
    Percent automatic transmissions.......................     79.9     81.7     87.4     87.8     69.1     72.6
    Percent automatic transmissions with lockup clutches..     93.1     94.9     93.3     94.8     92.6     95.0
Percent automatic transmissions with four or more forward                                                       
 speeds                                                        77.2     84.7     69.2     79.8     91.9    92.4 
----------------------------------------------------------------------------------------------------------------
*Includes associated station wagons.                                                                            

    Passenger car fleet average characteristics have changed 
significantly since MY 1978 (the first year of fuel economy 
standards). After substantial initial weight loss (from MY 1978 to 
MY 1982, the average passenger car fleet curb weight decreased from 
3,349 to 2,808 pounds), the passenger car fleet average curb weight 
stabilized around 2,800 pounds from MY 1982 to MY 1987, but has 
risen to approximately 3,000 pounds since then. Table II-4 shows 
that the MY 1994 passenger car fleet has nearly equal interior 
volume and higher performance, but with over 40 percent better fuel 
economy than the MY 1978 fleet. (See Figure II-3)
    The characteristics of the MY 1994 light truck fleet are shown 
in Table II-5. Since light truck manufacturers are not required the 
divide their fleets into domestic and import fleets based on the 75-
percent domestic content threshold used for passenger car fleets, 
the domestic and imported fleet characteristics in Table II-5 are 
estimated, based mainly on manufacturer name. The agency assumed 
that all products of foreign-based manufacturers would not meet the 
domestic content threshold, whether they were assembled in the 
United States of Canada, or in another country. The exception to 
this is the assumption that the import-badged products of a domestic 
manufacturer's assembly plant were ``domestic'' (Mazda Navajo and 
pickup and Nissan Quest).

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[[Page 16910]]
                          Table II-4.--New Passenger Car Fleet Average Characteristics                          
                                             [Model years 1978-1993]                                            
----------------------------------------------------------------------------------------------------------------
                                                     Fuel                    Interior                Hosrepower/
                   Model year                      economy    Curb weight   space (cu.  Engine size  weight (hp/
                                                    (mpg)        (lb.)         ft.)      (cu. in.)     100 lb.) 
----------------------------------------------------------------------------------------------------------------
1978...........................................         19.9         3349          112          260         3.68
1979...........................................         20.3         3180          110          238         3.72
1980...........................................         24.3         2867          105          187         3.51
1981...........................................         25.9         2883          108          182         3.43
1982...........................................         26.6         2808          107          173         3.47
1983...........................................         26.4         2908          109          182         3.57
1984...........................................         26.9         2878          108          178         3.66
1985...........................................         27.6         2867          108          177         3.84
1986...........................................         28.2         2821          106          169         3.89
1987...........................................         28.5         2805          109          162         3.98
1988...........................................         28.8         2831          107          161         4.11
1989...........................................         28.4         2879          109          163         4.24
1990...........................................         28.0         2908          108          163         4.53
1991...........................................         28.3         2934          108          164         4.42
1992...........................................         27.8         3007          108          169         4.56
1993...........................................         28.4         2971          109          164         4.62
1994...........................................         28.2         3012          108          167         4.76
----------------------------------------------------------------------------------------------------------------


                      Table II-5.--Light Truck Fleet Characteristics for MYs 1993 and 1994                      
----------------------------------------------------------------------------------------------------------------
                                                               Total fleet     Domestic fleet    Imported fleet 
                      Characteristics                      -----------------------------------------------------
                                                              1993     1994     1993     1994     1993     1994 
----------------------------------------------------------------------------------------------------------------
Fleet average fuel economy, mpg...........................     20.9     20.6     20.6     20.4     22.7     22.0
Fleet average equivalent test weight, lbs.................    4,201    4,274    4,284    4,340    3,727    3,832
Fleet average engine displacement, cu. in.................      237      243      249      255      167      165
Fleet average horsepower/weight ratio, hp/100 lbs.........     3.89     3.86     3.97     3.89     3.47     3.65
Percent of fleet..........................................      100      100     85.1     87.0     14.9     13.0
Segmentation by type, percent:                                                                                  
    Passenger van:                                                                                              
      Compact.............................................     23.6     17.0     25.8     18.6     11.1      6.3
      Large...............................................      0.3      0.5      0.4      0.6                  
    Cargo van:                                                                                                  
      Compact.............................................      1.4      1.5      1.6      1.7                  
      Large...............................................      4.7      4.7      5.6      5.4                  
    Small pickup*.........................................      7.9      6.2      6.6      5.3     15.2     12.2
    Large pickup*.........................................     34.3     40.0     33.4     40.5     39.8     36.8
    Special purpose.......................................     27.8     30.0     26.7     27.8     33.9     44.7
    Percent diesel engines................................     0.07     0.30     0.09     0.30                  
    Percent fuel injection................................     99.0     99.7      100      100     93.0     97.7
    Percent automatic transmissions.......................     76.2     77.3     82.5     82.5     39.9     45.7
    Percent automatic transmissions with lockup clutches..     98.6     98.3     99.1     98.5     92.3     94.0
    Percent automatic transmissions with four forward                                                           
     speeds...............................................     90.5     92.1     89.9     91.6     97.1     98.9
    Percent 4-wheel drive.................................     33.7     36.1     32.3     34.1     41.2     49.5
----------------------------------------------------------------------------------------------------------------
*Including cab chassis.                                                                                         

  The average test weight of the total light truck fleet increased 
by 73 pounds over that for MY 1993. Increased popularity of large 
pickups, special purpose vehicles, heavier, and higher performance 
trucks contributed to a 0.3 mpg fleet fuel economy decline for MY 
1994, offsetting the small increase in the use of fuel injection and 
automatic transmissions with four forward speeds. Diesel engine 
usage increased in light truck to 0.30 percent in MY 1994 from 0.07 
percent in MY 1993. The imported share of the MY 1994 light truck 
fleet decreased to 13.0 percent, 1.9 percent lower than MY 1993 and 
the lowest share since light truck fuel economy standards were 
established.
    During MYs 1980 through 1994, CAFE levels for light trucks in 
the 0-8,500 pounds gross vehicle weight (GVW) class increased, 
beginning at 18.5 mpg in MY 1980 and reaching 21.7 mpg in MY 1987 
before dropping to lower values in MY 1988 through MY 1994, as 
average weight, engine size, and performance increased. During these 
years, light truck production increased from 1.9 million in MY 1980 
to 4.7 million in MY 1994. Light trucks comprised 40 percent of the 
total light duty vehicle fleet production in MY 1994, more than 
double its share in MY 1980.
    Figure II-4 illustrates that the light duty fleet (passenger 
cars and light trucks together) average fuel economy steadily 
increased to MY 1987, but subsequently has been below the MY 1987 
level. (See Table II-6). Light truck average fuel economy declined, 
but the passenger car average fuel economy remained relatively 
constant for MYs 1987-1994. Thus, the overall decline illustrates 
the growing influence of light trucks in the light duty fleet.
    While both passenger car and light truck fleet fuel economies 
decreased from MY 1993 to MY 1994 by 0.2 mpg and 0.3 mpg, 
respectively, the total fleet fuel economy for MY 1994 decreased 0.5 
mpg over the MY 1993 level (25.1 mpg for MY 1993 and 24.6 mpg for MY 
1994). This is attributed to increased sales of light trucks, since 
the total light truck fleet fuel economy is far less than that of 
passenger cars. The shift to light trucks for general transportation 
is an important trend in consumers' preference and has a significant 
fleet fuel consumption effect.
    Domestic and imported passenger car fleet average fuel economies 
have improved since [[Page 16911]] MY 1978, although the increase is 
far more dramatic for the domestic fleet. In MY 1994, the domestic 
passenger car fleet average fuel economy decreased from the prior 
year to 27.3 mpg, and imported passenger car fleet average fuel 
economy remained at 29.6 mpg. Compared to MY 1978, this reflects an 
increase of 8.6 mpg for domestic cars. For imported cars, the MY 
1994 average fuel economy is only 2.3 mpg higher than that of MY 
1978.

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Table II-6.--Domestic and Imported Passenger Car and Light Truck Fuel Economy Averages for Model Years 1978-1994
                                                    [In MPG]                                                    
----------------------------------------------------------------------------------------------------------------
                                                          Domestic                    Imported                  
                                                --------------------------------------------------------  Total 
                   Model year                              Light                       Light              fleet 
                                                   Car     truck   Combined    Car     truck   Combined         
----------------------------------------------------------------------------------------------------------------
1978...........................................     18.7                        27.3                            
1979...........................................     19.3     17.7      19.1     26.1     20.8      25.5     20.1
1980...........................................     22.6     16.8      21.4     29.6     24.3      28.6     23.1
1981...........................................     24.2     18.3      22.9     31.5     27.4      30.7     24.6
1982...........................................     25.0     19.2      23.5     31.1     27.0      30.4     25.0
1983...........................................     24.4     19.6      23.0     32.4     27.1      31.5     24.8
1984...........................................     25.5     19.3      23.6     32.0     26.7      30.6     25.0
1985...........................................     26.3     19.6      24.0     31.5     26.5      30.3     25.4
1986...........................................     26.9     20.0      24.4     31.6     25.9      29.8     25.9
1987...........................................     27.0     20.5      24.6     31.2     25.2      29.6     26.2
1988...........................................     27.4     20.6      24.5     31.5     24.6      30.0     26.0
1989...........................................     27.2     20.4      24.2     30.8     23.5      29.2     25.6
1990...........................................     26.9     20.3      23.9     29.9     23.0      28.5     25.4
1991...........................................     27.3     20.9      24.4     30.0     23.0      28.4     25.6
1992...........................................     27.0     20.5      23.8     29.1     22.6      27.8     25.0
1993...........................................     27.8     20.6      24.2     29.6     22.7      28.0     25.1
1994...........................................     27.3     20.4      23.5     29.6     22.0      27.8     24.6
----------------------------------------------------------------------------------------------------------------

  Since MY 1980, the total light truck fleet average fuel economy 
and the average for domestic manufacturers have improved. However, 
the imported light truck average fuel economy has decreased 
significantly. The domestic manufacturers continued to dominate the 
light truck market. Domestic light trucks comprised 87.0 percent of 
the total light truck fleet. For MY 1994, the domestic light truck 
fleet has an average fuel economy 1.6 mpg lower than the imported 
light truck fleet. The imported light truck fleet fuel economy 
improved substantially up to MY 1981, but has been declining 
steadily since then. For MY 1994, the imported light truck fleet 
fuel economy decreased 0.7 mpg below MY 1993 to 22.0 mpg.
    The gap between the average CAFEs of the imported and domestic 
manufacturers is smaller than in earlier years as domestic 
manufacturers maintain relatively stable CAFE values while the 
import manufacturers move to larger, higher performance vehicles and 
more 4-wheel drive light trucks.
Section III: 1994 Activities

A. Passenger Car CAFE Standards

    The following synopsis describes recent litigation challenging 
NHTSA actions under the CAFE program.
    Competitive Enterprise Institute v. NHTSA, D.C. Cir., No. 93-
1210
    This case challenges NHTSA's January 15, 1993, decision (D.C. 
Circuit's remand in Case No. 89-1422) to again terminate the 
rulemaking it commenced to consider amending the MY 1990 passenger 
car CAFE standard. The petition for review was filed on March 15, 
1993. Briefs were filed between February and April 1994, and oral 
argument was held on May 16, 1994. To date, the Court has not issued 
a decision.

B. Light Truck CAFE Standards

    NHTSA published a final rule establishing the MYs 1996 and 1997 
light truck fuel economy standards on April 6, 1994, (59 FR 16312). 
The agency set a combined standard of 20.7 mpg for MYs 1996 and 
1997.
    In the final rule for MYs 1996 and 1997 light trucks, the agency 
determined that GM is the ``least capable'' manufacturer with a 
combined fuel economy capability of 20.7 mpg. The agency concluded 
upon balancing the relevant statutory factors, that the relatively 
small and uncertain energy savings that would be associated with 
setting a standard above GM's capability would not justify the 
economic harm to the company and the economy as a whole. The agency 
projected that GM could not achieve a combined fuel economy level 
higher than 20.7 mpg for MYs 1966 and 1997. In contrast, NHTSA 
concluded that Chrysler and Ford can achieve CAFE levels somewhat 
above 20.7 mpg.
    The agency selected 20.7 mpg for MYs 1996 and 1997 as the final 
combined standards because these values balance the potentially 
serious adverse economic consequences associated with market and 
technological risks for GM to further increase its fuel economy 
levels. Since GM produces more than 30 percent of all light trucks 
that are subject to the fuel economy standards, its capability 
significantly affects the industry's capability and, therefore, the 
level of the standard.
    The agency issued an advance notice of proposed rulemaking for 
Light Truck Average Fuel Economy Standards for MYs 1998-2006 (59 FR 
16324; April 6, 1994). The agency sought information that would help 
to assess the extent to which manufacturers can improve light truck 
fuel economy, the benefits and costs to consumers of improved fuel 
economy, the benefits to the Nation of reducing fuel consumption, 
and the number of model years that should be covered by the 
proposal.

C. Low Volume Petitions

    Article 49 U.S.C. 32902 (d) provides that a low volume 
manufacturer of passenger cars may be exempted from the generally 
applicable passenger car fuel economy standards if these standards 
are more stringent than the maximum feasible average fuel economy 
for that manufacturer and if NHTSA establishes an alternative 
standard for that manufacturer at its maximum feasible level. A low 
volume manufacturer is one that manufactured fewer than 10,000 
passenger cars worldwide, in the model year for which the exemption 
is sought (the affected model year) and in the second model year 
preceding that model year.
    The agency acted on two low volume petitions in 1994, which were 
filed by Bugatti International Holding, SA (Bugatti International) 
and MedNet, Inc.
    Bugatti International filed a joint low volume petition for 
Bugatti and Lotus high performance vehicles. Bugatti International 
requested alternative standards for its passenger cars for MYs 1994, 
1995 and 1996. Another petitioner, MedNet, Inc., requested an 
alternative standard for its recently acquired Dutcher PTV vehicles 
for MYs 1995, 1996, and 1997. NHTSA is reviewing these petitions and 
will respond in early 1995.

D. Enforcement

    Article 49 U.S.C. 23912 (b) imposes a civil penalty for $5 for 
each tenth of a mpg by which a manufacturer's CAFE level falls short 
of the standard, multiplied by the total number of passenger 
automobiles or light trucks produced by the manufacture in that 
model year. Credits that were earned for exceeding the standard in 
any of the three model years immediately prior to or subsequent to 
the model years in question can be used to offset the penalty.
    With completion by EPA of final CAFE computations for MY 1993 
for most passenger car fleets, the agency initiated appropriate 
enforcement actions for manufacturers that did not meet the CAFE 
standard.
    Table III-1 shows the most recent CAFE fines paid by 
manufacturers.

                                                                                                                
[[Page 16914]]
       Table III-1.--Cafe Fines Collected During Fiscal Year 1994       
------------------------------------------------------------------------
         Model year and manufacturer           Amount fined    Date paid
------------------------------------------------------------------------
1991:                                                                   
    Land Rover..............................        $520,520       10/93
    Sterling................................         254,840       12/93
    Porsche.................................       1,871,470       02/94
    Fiat (revised)..........................         416,385       08/94
------------------------------------------------------------------------
                                                                        
1992:                                                                   
    Land Rover..............................         607,620       10/93
    Porsche.................................         781,575       02/94
    Volvo...................................       5,361,515       04/94
    BMW.....................................      12,888,750       05/94
    Vector..................................           1,740       05/94
    Fiat (revised)*.........................         (2,250)       08/94
------------------------------------------------------------------------
                                                                        
1993:                                                                   
    Volvo...................................       5,764,800       06/94
    Fiat....................................         194,220       07/94
    Panoz...................................           3,080       07/94
    Vector..................................             870       07/94
------------------------------------------------------------------------
*Fiat was refunded $2,250 after revised calculation of its CAFE.        

E. Partnership for a New Generation of Vehicles (PNGV)

    At a White House ceremony on September 29, 1993, President 
Clinton and Vice President Gore, together with the Chief Executive 
Officers of Chrysler, Ford, and General Motors, formally announced 
the Partnership for a New Generation of Vehicles (PNGV). PNGV 
(previously known as the ``Clean Car Initiative'') is a historic new 
partnership between the United States Government and the U.S. 
Council for Automotive Research (USCAR) which represents Chrysler, 
Ford, and General Motors. It is aimed at strengthening U.S. 
competitiveness by developing technologies for a new generation of 
vehicles.
    PNGV focuses its research and development toward attaining three 
interrelated goals:
    <bullet> Improve the productivity of the U.S. manufacturing base 
by significantly upgrading U.S. manufacturing technology, including 
the adoption of agile, flexible manufacturing and the reduction of 
cost and lead time, while reducing the environmental impact and 
improving quality.
    <bullet> Pursue advances in vehicles that can lead to 
improvements in fuel efficiency and emissions of standard vehicle 
designs, while pursuing safety advances to maintain safety 
performance. Research will focus on technologies that reduce the 
demand for energy from the engine and the drive train.
    <bullet> Within a decade, achieve automotive fuel efficiency 
improvements up to three times that of the average 1994 Chrysler 
Concorde/Ford Taurus/Chevrolet Lumina with equivalent performance, 
size, and utility, and with customer purchase price comparable to 
today's sedans adjusted for economics, while also meeting all 
current and future safety and emissions requirements, and preserving 
in-use safety compared to the target cars.
    The development of energy efficient, low emission vehicles is 
economically and environmentally critical. From an economic level, 
the introduction of a new generation of vehicles will preserve 
American jobs and improve the Nation's competitiveness. From an 
environmental level, a new generation of fuel efficient vehicles 
will produce less carbon dioxide (greenhouse gas emissions) and 
decrease American dependency on imported oil.
    The following timetable illustrates probable goals the PNGV expects 
to achieve within five to ten years. PNGV anticipates a concept vehicle 
by year 2000 and a prototype vehicle by year 2005.

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NHTSA's PNGV Role

    NHTSA's role in the PNGV initiative is to provide technical support 
to ensure that the selected PNGV vehicles meet existing and anticipated 
safety standards and to insure in-use safety equivalent to today's mid-
size passenger cars. NHTSA will also ensure that the overall safety of 
the PNGV vehicles is not compromised.
    NHTSA technical support includes:
    <bullet> Develop advanced computer models of the PNGV platforms and 
selected vehicles which represent the fleet in order to evaluate the 
crashworthiness of conceptual designs and their safety compatibility 
with contemporary vehicles.
    <bullet> Conduct and evaluate research of light weight materials 
such as advanced composites and develop new, unique material models for 
usage in the finite element model work.
    <bullet> Provide require PNGV transportation infrastructure 
analyses.
    <bullet> Provide peer review study of PNGV programs, including 
conceptual designs. [[Page 16915]] 

F. Advisory Committee on Personal Motor Vehicle Greenhouse Gas 
Reductions

    As part of the Administration's ``Climate Change Action Plan,'' the 
White House formed an advisory committee to develop recommendations to 
reduce greenhouse gas emissions by light vehicles to the year 1990 
level. The committee is comprised of a number of stakeholders, 
including environmental and public interest groups, automotive 
manufacturers, fuel suppliers, vehicle users, and representatives of 
state and local governments.
    The goal of the committee is to develop policy options that will 
cost-effectively reduce greenhouse gas emissions from the use of light 
vehicles (cars and light trucks) to the 1990 level by years 2005, 2015, 
and 2025.
    Policy options being considered encompass vehicle-miles-traveled 
(VMT) reductions, efficiency enhancement, and alternative fuels. These 
policies include:
    <bullet> Vehicle technologies.
    <bullet> Fuels with lower carbon content.
    <bullet> Vehicle-based regulatory strategies such as CAFE.
    <bullet> Vehicle taxes and/or rebates.
    <bullet> Market-based actions to reduce VMT (fuel taxes, congestion 
pricing, and pay-at-the-pump insurance).
    <bullet> Others approaches (e.g., changed land-use patterns, 
increased mass transit, telecommuting, Intelligent Vehicle-Highway 
Systems (IVHS), and increased carpooling).
    The advisory group has conducted four meetings: September 28-29, 
October 19-20, November 14-15, and December 15-16, 1994. This project 
will run for approximately one year, and it is expected to contribute 
to a broad-based approach by the Administration to address light 
vehicle greenhouse gas emissions.

G. General Agreement on Tariffs and Trade (GATT) Decision

    On September 30, 1994, a ruling by a panel under the General 
Agreement on Tariffs and Trade (GATT) upheld key provisions of the 
United States CAFE law, as well as the ``gas guzzler'' tax and luxury 
tax. The panel rejected a challenge under GATT by the European Union 
(EU) which alleged that the CAFE requirements, the gas guzzler tax, and 
the luxury tax discriminated against cars manufactured by Mercedes, BMW 
and other European luxury auto manufacturers. Those manufacturers have 
paid a large share of penalties and taxes under these laws. The panel 
agreed with EU complaints on one technical issue--the CAFE accounting 
rules that establish separate ``domestic'' and ``import'' fleets for 
determining overall fuel economy. Because these rules do not have any 
actual economic impact on EU auto manufacturers, and therefore no trade 
damage results from this requirement, U.S. Trade Representative Michael 
Kantor stated that the United States does not intend to make any 
changes in the CAFE rules.
Section IV: Use of Advanced Technology

    This section fulfills the statutory requirement of Section 305 of 
Title III of the Department of Energy Act of 1978 (Pub. L. 95-238), 
which directs the Secretary of Transportation to submit an annual 
report to Congress on the use of advanced technologies by the 
automotive industry to improve motor vehicle fuel economy. This report 
focuses on the introduction of new models, the application of materials 
to save weight, and the advances in electronic technology which 
improved fuel economy in MY 1994.

A. New Models

    The domestic automakers introduced and replaced several completely 
new cars models and, in addition, introduced updates and redesigns of 
many previous passenger car models. Chrysler introduced the New Yorker 
and the Chrysler LHS, two all-new luxury sedans, with an average fuel 
economy of 22 mpg each for MY 1994. Ford redesigned the Mustang, the 
first major redesign since MY 1979. The car is 4.1 inches longer and 
200 pounds heavier than the model it replaced, and already meets some 
Federal rules of the newly issued emissions and safety standards which 
are being phased in for future years. Ford also redesigned the Lincoln 
Continental to include a rounded grille, suspension modifications, and 
a smaller bumper. The fuel economy of that model has improved 1 mpg for 
city driving. General Motors (GM) introduced two all-new vehicles, the 
Cadillac De Ville and the Cadillac De Ville Concours for MY 1994. The 
De Ville has a 4.9 liter (L) V-8 engine, a new automatic transmission, 
speed sensitive suspension and steering. The upscale Concours gets the 
270-hp 4.6 L double-overhead cam (DOHC) Northstar V-8 engine and the 
electronically controlled 4T80-E transmission. Both models have an 
average fuel economy of 21 mpg.
    Automobile importers also introduced a variety of new passenger 
cars and updates of their previous models for MY 1994. The BMW 325i 
convertible is powered by a 2.5 L DOHC I-6 engine and a 5-speed manual 
transmission and has improved its average fuel economy over last year's 
model by 3 mpg. The 5-series has three new models for MY 1994, the 530i 
sedan, Touring wagon and 540i sedan, all powered with a V-8 engine. The 
average fuel economy of the 530i and the 540i is 19.5 mpg and the 
Touring wagon is 21.5 mpg. The 535i model has been discontinued. BMW 
also has an all-new 840Ci model with a 4.0 L 32-valve all aluminum V-8 
engine with average fuel economy of 19.5 mpg and a 850CSi model with a 
5.6 L 292-horsepower (hp) V-12 engine with an average fuel economy of 
16 mpg.
    Honda completely redesigned the Accord with a 2.2L SOHC I-4 engine. 
The fuel economy has improved by 0.5 mpg over its MY 1993 counterpart. 
Honda's Acura division completely redesigned the Integra to include a 
1.8L 142 hp DOHC I-4 engine on the RS and LS model and a 1.8 L 170 hp 
VTEC variable-valve-timing I-4 engine on the GS-R model. Acura also has 
a new top-of-the-line Legend sedan with a 230 hp single overhead cam 
(SOHC) V-6 engine and a six-speed manual transmission.
    Kia Motor Corporation introduced its first U.S.-vehicle entries 
under the Kia badge. Kia has three compact models, front-wheel-drive 4-
door sedans powered by a 1.6 L 88 hp SOHC I-4 engine with an average 
fuel economy of 30 mpg.
    Mercedes-Benz introduced its new C-class sedan to the line, powered 
by a 2.2 L I-4 engine with an average fuel economy of 25 mpg. The C280 
model has a new 2.8 L I-6 engine with an average fuel economy of 23 
mpg.
    Saab has two all-new hatchback 900 series models with a larger 4-
cylinder engine and an optional V-6 engine for the first time. The Saab 
900 moved from the EPA compact size class to the midsize class for MY 
1994. The average fuel economy of this model is 21.5 mpg for MY 1994.
    Toyota introduced a new 2-door Camry with a 3.0 L aluminum V-6 
engine with a 4-speed electronic controlled automatic transmission and 
an average fuel economy of 21 mpg. Also Toyota has introduced a new 
liftback Celicia model with an all-new 110 hp 1.8 L engine and an 
average fuel economy of 30.5 mpg for MY 1994.
    Volvo introduce an all front-wheel drive 850 wagon in both touring 
and turbo versions with a 2.4 L engine and a average fuel economy of 24 
mpg. This model replaced the 240 wagon which also had a fuel economy of 
24 mpg.
    In the domestic light truck area, Chrysler introduced the full-
sized T300 Ram pickup replacing a model which had been in production 
since MY 1972. [[Page 16916]] The new model averages 16.8 mpg, the same 
as its predecessor despite being substantially larger and heavier. GM's 
GMC division completely redesigned the Sonoma's exterior and interior 
with a 2.2L I-4 engine and a 5-speed manual transmission. The Sonoma 
average fuel economy is 25.5 mpg an improvement of 0.5 mpg over MY 1993 
light truck. GM also redesigned the companion Chevrolet S-10 pickup.

B. Engine and Transmission Technology

    Some manufacturers made significant improvements in engine 
technology for model year 1994. GM has a new pushrod engine, which 
bears a close resemblance to familiar engines. The base Chevy Caprices 
gets a 4.3 L V-8 variant of the LT1 V-8 to replace the 5.0 L V-8. The 
4.3 L engine produces 200 hp at 5200 revolutions per minute (rpm) (30 
hp more than last year's 5.0 L) and 245-pound-feet of torque at 2400 
rpm.
    Ford introduced a more powerful engine controller called EEC-V on 
the MY 1994 Thunderbird, Cougar, and Mustang. Compared with EEC-IV, the 
new unit operates 20 percent faster and has 66 percent more memory. 
Developed in part through Ford's Formula 1 racing program, EEC-V 
features a ``Flash Erasable Electrically Programmable Read Only 
Memory'' chip (Flash-EEPROM) that allows service technicians to 
reprogram the computer, rather than replace it, when defects arise or 
upgrades becomes available.
    Still in development at Ford is a new two-stroke gasoline engine. A 
major obstacle to two-stroke engine development in the United States is 
the Tier II emissions requirement of 0.2 grams per mile nitrogen oxide 
(NOx) which is, at best, marginally achievable with current lean-system 
two-stroke technology. According to Ward's Automotive Yearbook 1994, 
GM's two-stroke development program is winding down. GM preferred to 
proceed with development of its simpler dry-sump, roller-bearing 
version but reportedly was experiencing piston cooling and cylinder-
bore distortion problems. Ford and Chrysler are moving ahead with two-
stroke programs. Ford is field testing a two-stroke hybrid vehicle in 
Europe, and press reports indicate that Chrysler expects to show what 
it believes is a marketable wet-sump, externally scavenged engine some 
time in the near future.
C. Electronics

    Applications of electronic components in vehicles continue to rise. 
Some of the applications include four-wheel steering, tire-pressure 
sensing, instrumentation, and in-car entertainment grouping. However, 
the main concentration is in engine management, powertrain management, 
antilock braking systems, air bags, air conditioning, and, 
increasingly, suspension control.
    Electronic controllers are gradually being incorporated in all 
modern automatic transmissions, and this year Ford's 4R70W four-speed 
automatic truck transmission and GM's 4L60-E rear-drive four-speed 
automatic, both have electronic controls. The GM unit features a 
performance mode that provides quicker shifts and higher shift point 
speeds. In a quest for consistent shift quality, the controller alters 
shifting strategies at high altitudes, as components wear, and as 
temperatures rise.

D. Materials

    For MY 1994, automakers chose aluminum, high strength steel, powder 
metal (P/M), and magnesium for a number of significant new component 
applications in their cars, and light trucks. The reduced weight of 
these components contributes to improved fuel economy of the models 
using them.
    Aluminum usage has increased by five-eight pounds (lbs.) annually 
per vehicle since 1990 in North America, as reported in Ward's 
Automotive Yearbook 1994. Since 1990, the annual increase of plastic 
usage has been cut in half every year and is likely to increase only 
0.5 lbs. per vehicle during MY 1994.
    Even as the use of plastics and aluminum has grown, steel continue 
as the primary material in U.S.-built vehicles, comprising well over 50 
percent of the weight of the average passenger car according to Ward's 
1994 Automotive Yearbook. The amount of steel used in vehicles 
continues to grow, due mainly to redesigned vehicles that are longer, 
wider and/or taller than those they replaced. These models include the 
redesigned compact GMC Sonoma and Chevrolet S-10 pickup trucks, 
Cadillac's new Sedan De Ville and De Ville Concours, Chrysler's Dodge 
Ram pickup, and Ford's Mustang. The new Sonoma/S10 grew 10.6 inches and 
added 262 lbs. in MY 1994 over MY 1993. The long-box version of the 
truck gained 384 lbs. from the previous year. Ford added 200 lbs. to 
the Mustang, and Chrysler's new Dodge Ram full-size pickup has added 
226 lbs.
    New safety features added to vehicles also increase the amount of 
steel usage in todays vehicles. It is the material used for most door 
intrusion beams, roof structures and undercarriage reinforcements 
designed to protect occupants in crashes, rollovers and side impacts. 
The light-truck market has particularly shown an increase in steel 
usage as regulations and consumer demands force light truck 
manufacturers to incorporate the same safety features as cars. The GMC 
Jimmy, for instance, adds new side-door steel guard beams running the 
full length of the door. Steel intrusion beams also are standard in MY 
1994 Ford's F-series pickups.
    Other new applications include composite steel camshafts in GM's 
3.1L V-6s and 2.2L 4-cylinder engines, and steel tubing on the Dodge 
Ram's radiator enclosure panels. Also the use of medium-strength 
steels, mostly bake-hardenable varieties, increased in MY 1994.
    P/M makes up about 27 lbs. of weight of a typical family vehicle 
accordingly to Ward's Automotive Yearbook 1994. It continues to play an 
increasingly significant role because it can be used to make strong and 
lightweight parts that have very complex shapes. Applications for P/M 
have been growing steadily in recent years, and several new and 
expanded applications were introduced in MY 1994, including P/M bearing 
caps on GM's 3100 and 3800 series V-6 engines and P/M inserts in the 
bearing cap girdles for Ford's new aluminum 2.5L and 3L V-6 engines.
    Magnesium use has risen every year since 1988 by 10 to 16 percent. 
Magnesium firsts in MY 1994 included knee-bolster retainers, steering 
wheel armatures, and seat pedestals, or stanchions. The knee-bolster 
retainers, the first large structural magnesium component application 
in the U.S. auto industry, debuted on several of GM's standard-size, 
front-drive cars, including the Buick Park Avenue. Ford replaced steel 
wheel armature subassemblies with magnesium on its Thunderbird, Cougar, 
Taurus, and Sable.

E. Summary

    The stabilization of oil prices and supply has been a factor 
resulting in a shift of consumer demand in recent years to more 
powerful and roomier passenger cars and light trucks. The auto 
industry, responding to this shift, has increased the horsepower of its 
engines and shifted its production mix to somewhat larger cars. Still, 
there were some considerable technical gains, particularly in 
lightweight material usage, that contributed to improvements in fuel 
economy on some models in MY 1994.

[FR Doc. 95-7428 Filed 3-31-95; 8:45 am]
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