US car-makers seek fuel solution

If one third of all light utility vehicles (SUVs) in the US were diesel, it would save 1

If one third of all light utility vehicles (SUVs) in the US were diesel, it would save 1.4 million barrels of oil a day, the equivalent of its current imports from Saudi Arabia. That's according to the US Federal Environmental Protection Agency, as quoted by DaimlerChrysler chief executive Deiter Zetsche. Michael McAleer reports from Detroit

He was just one of the many executives addressing the Detroit Motor Show and focusing on the burning issue of the day for US motorists: rising fuel prices.

Despite diesel being an established fuel in Europe - representing nearly 70 per cent in some European markets - the Americans have never regarded it as anything more than an industrial fuel for trucks and trains.

German boss Zetsche, who took over the giant DC operation from the start of this year, is well aware of diesel's potential, particularly for Chrysler and Dodge, two US marques that can benefit from the diesel expertise of sister brand Mercedes. Despite the logic of incrasing diesel sales, there remains doubt as to whether it can make any significant impact on the US market in the short to medium term. It does, however, offer another choice to motorists.

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The big interest for US motorists for now is hybrids. As they begin to appreciate the real cost of fuel, every presentation focussed at some point on hybrids and fuel economy. In the land of the supersize SUV trucks, the talk was of a change in people's motoring attitude, though there is no shortage of new giant SUVs reaching the market.

At the Ford presentation, there were plenty of references to small cars becoming the next big thing in the US.

That may seem hard to believe, particularly as it coincided with the introduction of a concept vehicle, the Super Chief, which was designed with US locomotives in mind. Yet the market figures tell the tale.

According to research from car industry analysts Edmunds.com, SUV sales as a proportion of total car sales reached 24 per cent at the end of November this year, compared with more than 27 per cent in November 2004.

Sales have also fallen in real terms, with JD Power & Associates projecting that 4.3 million SUVs will have been sold in 2005, down 4 per cent from their high of 4.5 million in 2004.

So what is the next big thing? Admittedly, no one is quite sure for now, but most agree that there is particular room for a rise in the likes of so-called crossover vehicles - SUV-like vehicles built with more car parts and with features similar to the people carriers.

Crossover sales in North America have quadrupled in the past five years. They are expected to exceed traditional SUV sales this year.

For the American brands, a new sector may spell potential profits. However, unlike the SUV models, the European and Asian brands are already strong contenders in this segment. Given the precarious financial positions of most US car firms, the sudden attention to fuel economy couldn't have come at a worse time.