NEW YORK (CNNfn) - Ford Motor Co. announced a plan Thursday to improve the fuel efficiency of its profitable but gas-guzzling sport/utility vehicles by 25 percent over the next five years.|
Jac Nasser, the company's chief executive, in a speech in Washington, said the improvements would be made to all S/UV models through the use of lighter-weight materials as well as advances in powertrain technology and improved aerodynamics.
Fuel efficiency standards are measured across fleet averages in the auto industry, and it is that S/UV fleet average Ford intends to raise by 25 percent. About 30 percent of the S/UVs' fleet improvement would be through the introduction of new smaller, more fuel efficient S/UV models.
The move could bring more pressure on major automakers to improve the fuel economy of all of their light trucks, which are now allowed to have lower fuel economy standards than passenger cars.
Leading automaker General Motors Corp. (GM: Research, Estimates) said it intends to match any fuel efficient improvements made by number two automaker Ford (F: Research, Estimates).
"General Motors leads Ford in overall truck fuel economy today in model-by- model comparisons," said Dennis Minano, GM vice president and chief environmental officer. " We lead them in full-size and mid-size S/UVs (fuel economy) as well as small pickups. We intend to keep those leads."
Public demand for the S/UVs has not abated despite rising fuel prices. Statistics from Autodata show that 1.7 million S/UVs were sold the first six months of the year, up 13.6 percent from a year earlier. They now represent about 19 percent of vehicles sold, and are among the most profitable vehicles on the market for the automakers.
But the S/UVs' relatively poor fuel efficiency has made them the focus of criticism from environmentalists. They have also received part of the blame in some quarters for rising fuel prices due to their contribution to increased demand for gasoline.
Ford's first "corporate citizenship" report earlier this year acknowledged the vehicles posed a problem with its stated goals of being environmentally friendly.
"The fuel economy of S/UVs is less than cars, particularly for larger S/UVs, and the migration of car customers to S/UVs has reduced the fuel economy improvements achieved by automakers, directly contributing to rising greenhouse gas levels and global climate change concerns," said the report.
It also acknowledged that S/UVs raise safety concerns for drivers and passengers in other vehicles due to the difference in height, weight and design differences.
Nasser said the S/UV fuel economy effort would be good for both the company's profits and its customers.
"S/UV customers are asking for more fuel efficient vehicles. Our strategy is to maintain and enhance the function of their S/UVs while making substantial fuel economy improvements," Nasser said. "This is customer-driven environmental responsibility. We aren't asking our customers to compromise safety, performance or functionality."
Shares of Ford gained 5/16 to 46-9/16 in trading Thursday.