Thursday, February 14, 2008

Emission changes could limit car choices


TORONTO -- Provinces that adopt California's proposed standards on auto emissions will find the supply of vehicles severely restricted, senior executives of auto makers in Canada warned yesterday.

And it won't only be the gas-guzzling sport utility vehicles - the bane of environmentalists - that are choked off. The supply of all vehicles will suffer, said Reid Bigland, president of Chrysler Canada Inc.

"You're going to have reduced selection of products and they're going to have increased costs," Mr. Bigland said in an interview at the Canadian International Auto Show in Toronto.

His comments were echoed by executives from General Motors of Canada Ltd., Honda Canada Inc. and Toyota Canada Inc. as several provinces consider adopting California's emissions rules, which are more restrictive and come into play sooner than the U.S. federal government regulations approved last year that Canada has said it will match.

The California regulations are scheduled to be phased in from 2011 to 2016 - compared with 2020 for the federal U.S. and Canadian standards.

They are estimated to translate into fuel economy of 43 miles per gallon (69 kilometres), compared with a 35-mile-per-gallon level adopted by Washington and Ottawa. The figures represent an average for vehicles produced by any single manufacturers. As a result, the auto makers may hold back offering certain vehicles for sale in some markets, especially if those markets adopt California standards, to keep their average MPG down.

Quebec is well down the road to adopting the more restrictive California rules and British Columbia said Tuesday in a Throne Speech that it will also move in that direction.

"To further reduce transportation-related emissions, this legislature will be asked to adopt new California-equivalent vehicle tailpipe emission standards, in tandem with California and a number of other states and provinces," the speech said. Manitoba and Nova Scotia would also like to adopt the stricter rules, auto industry officials said.

Environmental groups have criticized the new U.S. and Canadian standards as being inadequate, and regard the stricter California rules as the minimum action necessary to help reduce greenhouse gases emitted by automobiles.

Mr. Bigland glanced at a green Dodge Viper behind him on the floor of the auto show and acknowledged that Chrysler would not be able to sell the super sports car in any province that adopts the California rules.

Canada represents just 2 per cent of the global vehicle market and single provinces are an even smaller fraction, Mr. Bigland said, noting that "if you think we can dictate the world standard, it's just not going to happen."

By the 2011 start date for the phase-in of the California rules, "the majority of cars and sport utility vehicles that we sell now would just not be available," said David Paterson, vice-president of corporate and environmental affairs for GM Canada.

The Chevrolet Volt electric vehicle that General Motors Corp. is aims to have on the market by 2010 would be one vehicle that GM could sell, he said.

Meeting the U.S. and Canadian standard of 35 miles per gallon by 2020 will be difficult enough, Mr. Paterson and other executives said. The fuel economy of GM's existing subcompacts isn't that high, he added.

What gives the auto makers some hope is that California's effort to have separate standards, which is backed by some 20 other U.S. states, is tied up in the courts at the moment.

But Jim Miller, executive vice-president of Honda Canada Inc., cautioned that all three leading contenders to replace U.S. President George W. Bush have said they support the California regulations.

Consumers in provinces where choice is restricted will simply buy their vehicles in a neighbouring province or in the U.S., industry officials said, noting how Canadians flooded over the border to buy cheaper U.S. cars and trucks last fall when the loonie hit parity with the greenback.

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