New US Fuel Efficiency Standards May Aid Aluminum,Hurt Steel
WASHINGTON (AP)--The energy bill President George W. Bush signed last week mandating tougher fuel-economy standards sent a simple message to automakers: lighten up.
The new rules certainly give makers of aluminum, carbon fiber and other lightweight materials something to smile about, analysts say, though the steel industry's piece of the auto-industry pie is likely to shrink.
Auto shoppers, meanwhile, can expect to pay a premium at dealerships when the new rules kick-in - but the impact will be mitigated somewhat by fuel savings.
The new law says the auto industry must raise its fleet-wide fuel-economy average 40% in the U.S., to 35 miles per gallon (15 kilometers per liter), by 2020. Increased mileage requirements could begin as early as 2011.
"With new standards, historically the auto industry has responded by lowering the weight, which meant less steel and more aluminum, rubber and plastic," said Mary Deily, a professor of economics at Lehigh University in Bethlehem, Pennsylvania, who has studied the steel industry.
A 10% drop in weight yields roughly a 6% improvement in fuel economy, automakers and analysts said.
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The new rules certainly give makers of aluminum, carbon fiber and other lightweight materials something to smile about, analysts say, though the steel industry's piece of the auto-industry pie is likely to shrink.
Auto shoppers, meanwhile, can expect to pay a premium at dealerships when the new rules kick-in - but the impact will be mitigated somewhat by fuel savings.
The new law says the auto industry must raise its fleet-wide fuel-economy average 40% in the U.S., to 35 miles per gallon (15 kilometers per liter), by 2020. Increased mileage requirements could begin as early as 2011.
"With new standards, historically the auto industry has responded by lowering the weight, which meant less steel and more aluminum, rubber and plastic," said Mary Deily, a professor of economics at Lehigh University in Bethlehem, Pennsylvania, who has studied the steel industry.
A 10% drop in weight yields roughly a 6% improvement in fuel economy, automakers and analysts said.
story continued
posted by anthony m, at Sunday, December 23, 2007
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