Carmakers clash with EU over tougher fuel efficiency test

Unless you drive your car with Sellotape over the door joints and disconnect the battery, it is unlikely you are getting the fuel efficiency promised on the posters in the dealership showroom.

If a driver uses the air-conditioning or heated seats, turns on the navigation system, drives at night or sits in a traffic jam, actual fuel consumption will almost certainly be greater, leaving the consumer with higher fuel bills than expected.

Europe's current fuel economy and emissions test procedure was developed almost 45 years ago and now bears little relation to real-world driving conditions and technologies.

And while the EU is keen to bring in a new World Light Vehicle Test Procedure by 2017, the car industry is opposed to such a swift adoption.

"Research has shown that half of the improvement in efficiency since 2007 has only been achieved in tests, not on the road," says Greg Archer, clean vehicles manager at Transport & Environment, a Brussels-based environmental think-tank. "The industry appears to be looking at almost another decade of using this outdated and unfit test, and taking advantage of the loopholes that it provides."

According to the International Council on Clean Transportation, an independent non-profit research institute, European cars produce as much as 30 per cent more carbon dioxide a kilometre on the road than the minimum level promised by manufacturers, up from a difference of less than 10 per cent a decade ago.

Environmental groups accuse the industry of "gaming the system". Financial studies calculate that carmakers would need to spend more than €10bn to upgrade their technology to close the gap. The car industry says it is "unrealistic" to bring in the more stringent and less flexible test rules before the end of the decade.

Ten of the 12 largest carmakers in Europe by sales contacted by the Financial Times declined to comment on the proposed new test cycle.

But in a speech to investors last month, Norbert Reithofer, chief executive of BMW , said the industry was trying to push back implementation of WLTP to 2020.

"It will change how we measure CO2 emissions in future. This could be an additional burden for the car industry," he said.

The battle over lowering emissions is central to the future of the car industry, as regulators spar with carmakers over ever-stricter CO2 reduction targets, and manufacturers squeeze more and more efficiency out of petrol engines, while pouring billions of dollars into research to find alternative ways of powering cars.

Carmakers in Europe have learnt that what matters now is how well the car performs in the New European Driving Cycle, or NEDC, test. That was drawn up in 1970, when cars were less powerful, accelerated more slowly and were not expected to drive long distances - and when Bluetooth-enabled sound systems were but a pipe dream.

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"European carmakers have little choice but to take the threat of a tougher test cycle seriously . . . All carmakers can do now is lobby to delay its introduction and seek compromises in its application," says Stuart Pearson, automotive analyst at Exane BNP Paribas.

"We estimate a move to a 'real-world' test cycle could add up to €10bn in compliance costs for the European industry. Passing this on to consumers may prove impossible - leaving carmakers and their shareholders to foot the bill."

The European Automobile Manufacturers Association (ACEA), which is funded by the European car industry and represents their interests in Brussels, maintains that carmakers "comply with the law" when testing their vehicles' emissions, but admits that the new test is likely to reflect actual driving conditions more accurately.

"ACEA does expect CO2 emissions to be higher over the new test procedure as a result of this effort to better represent real-world driving," says Erik Jonnaert, the association's secretary-general. "There will be additional costs [to carmakers] that will be passed on - as is always the case when major new legislation is introduced."

Hyundai and Kia, Europe's 10th and 12th largest carmakers by sales respectively, said they "fully support" the implementation of the new test.

The ADAC, the German car club and roadside assistance association, says the WLTP should be introduced "at the earliest possible" moment. "This is critical in order to provide customers and prospective buyers with more realistic emission and fuel-consumption specifications of passenger cars in a timely manner," it says.

But the industry is hard at work trying to convince regulators to delay the introduction of the new test cycle and arguing for adjustments to be made to their targets to compensate for the higher emission values it will produce.

<>The new test will also require changes to road tax and vehicle labelling procedures in many European markets, potentially delaying its full implementation.

"The car industry is not to blame for the problems of the current test cycle - the European Commission has taken too long to amend it," says Ferdinand Dudenhoffer, director of the Center Automotive Research at the University of Duisburg-Essen in northwest Germany.

"It remains to be seen how the industry will cope with it. But I assume carmakers will want to amend the old targets to take into account the values of the new test cycle and [German] chancellor Angela Merkel will lobby for a compromise as she has done in the past," says Mr Dudenhoffer. The new test cycle is a "big threat" to the industry, he says.

The German car industry, which builds a high number of thirsty saloons and sport utility vehicles, has more to lose than most.

German carmakers have led the industry in introducing technology that automatically stops the engine when the car is stationary. This was particularly beneficial for fuel consumption figures: in the current NEDC test cars are stationary for about 20 per cent of the time.

Germany's car industry was aggressive in lobbying for more time and greater flexibility to meet the EU's 2021 emission-cutting goals and few would be surprised if it lobbied furiously again on this issue.

However, German carmakers are also more profitable than their French and Italian rivals and have been heavily investing these returns in low-emission technology to bring down the emissions of their fleets.

Japan, India and South Korea are among other countries interested in implementing the WLTP, which is being drawn up under the guidance of the UN.

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