For years, U.S. auto industry leaders fretted about higher federal fuel consumption standards.
Turns out they were worried about the wrong thing.
Consumer demand for smaller, lighter and more efficient cars is outpacing any standards the federal government has proposed, said Amory Lovins, co-founder, chairman and chief scientist of the Rocky Mountain Institute.
Toyota Motor Corp.'s Prius hybrid outsold every sport utility vehicle model in the United States last year, he said. Honda Motor Co. which was occasionally ridiculed for failing to have an eight-cylinder engine in the past is now the only Japanese or U.S.-based automaker to see its sales rise in the U.S. over the first six months of 2008.
While there are government mandates requiring improved fuel economy in the future with a new Corporate Average Fuel Economy of 35.7 miles per gallon by 2015 consumers are the real force today.
``A year ago, even six months ago, people were still looking for big vehicles,'' said Kim Hill, associate director of Ann Arbor, Mich.-based Center for Automotive Research's economics and business group. ``Finally, consumers are part of the equation.''
But the raw materials that go into that equation are still in question. While the auto industry knows that the brave new world of small, light and efficient cars is finally here, no one is certain exactly what shape the new auto world will take, though it will definitely use lighter materials opening the door for more plastics in tomorrow's cars.
``Incremental change is not what's needed here,'' George Racine told automakers and suppliers during the auto industry's Management Briefing Seminars, held Aug. 11-15 in Traverse City. Racine is a member of the automotive work group of the Arlington, Va.-based American Chemistry Council's plastics division.
Composites and thermoplastics offer benefits in shedding weight from cars and trucks, he noted, which improves gas mileage. Parts consolidation through modular design such as front-end systems that combine everything from polyolefin bumper fascia to polycarbonate lights and nylon latches and structural beams offer cost savings.
Toray Industries Inc., Nissan Motor Co. Ltd. and Honda signed an agreement in July to work together to bring carbon- fiber cars to the market sometime in the next decade, with a goal of finding a better and cheaper way to process carbon fiber that will allow them to replace steel body panels with high-end composites.
``As a private investor, I would bet on composites,'' said Lovins, whose Snowmass, Colo.-based consulting group first began working on its ``Hypercar'' concept in the 1990s.
That does not mean, however, that the auto industry expects to buy into any one answer or any one material as it creates its path to the next generation of cars. There are too many issues still unsolved to settle on one strategy. Consider everything that is still in flux for just one future car, General Motors Corp.'s Chevrolet Volt.
Detroit-based GM has promised to bring the Volt to the market by late 2010 as the first major plug-in electric car in decades, able to run for 40 miles on a single charge.
With a little more than two years before its deadline, Bob Boniface, director of design for the Volt, said the automaker is still tweaking the car's shape to boost its aerodynamic efficiency and hit that 40 mile target. While the company used thermoplastics for the body of the concept Volt, specifics about the production model have not been released.
At the same time, the automaker and battery makers are still making adjustments to fine-tune lithium-ion batteries for everyday use in the Volt.
The batteries which use plastics as binder materials, in separator films and for housings are made in Asia, said Mary Ann Wright, chief executive officer for Johnson Controls-Saft Advanced Power Solutions, a joint venture of battery maker Johnson Controls Inc. of Glendale, Wis., and Saft Groupe SA of Paris, that is working with GM on lithium-ion batteries. That means extra cost to ship the battery packs to the U.S. for use in the Volt.
And, Wright noted, while lithium-ion battery technology may decrease Americans' reliance on Mideast oil, it shifts global concerns to other regions where those batteries' raw materials come from. Lithium ore is mined in China and South America.
``While the U.S. and Europe have excellent technology, they own none of the manufacturing,'' she said.
JCI will be doubling its research and development and R&D battery assembly lines in North America during the next two years, and JCI-Saft has extensive research operations in Nersac, France.
The manufacturing structure, however, simply does not exist in North America, according to Wright.
And even an element of the future Volt that may seem simple a fuel tank that will hold gasoline to power an on-board generator to provide extra electrical power when needed is not simply a matter of going to an existing tank maker.
Bo Andersson, group vice president of global purchasing and supply chain for GM, said the carmaker's current suppliers of fuel tanks the majority of them multilayer blow molded tanks turn out tanks that typically hold 17 gallons or more. The Volt will hold 8 gallons.
``Our existing supply base is not set up for small tanks,'' he said.
It will not be easy for the industry to adjust to making smaller cars, or making a new type of car, but Lovins noted that automakers have adapted in the past.
At the start of World War II, auto assembly plants went from making cars to making planes within six months.
``If it were cheap and easy, we would all be doing it just from a competitive standpoint,'' said Beth Lowery, vice president of environment, energy and safety policy for GM.
Even as it lays the groundwork for change, however, the industry also must keep an eye on consumer behavior. While $4 per-gallon gasoline prices led the charge to smaller cars, Americans may drift back to other vehicles once they get used to the sticker shock.
``I'm not convinced yet on Americans giving up their big car or truck,'' said Kiyoshi Furuta, chairman and chief executive officer of Toyota Boshoku America Inc., which will manufacture parts for the Prius hybrid car when Toyota Motor Corp. begins building it in Mississippi in 2010.
``Maybe five years down the road, we'll see it again that people will go back,'' Furuta said. ``I have to be nimble so I can move if the people move.''