Filed under: Ford, Jaguar, Land Rover, Legislation and Policy
New Euro CO2 rules could hurt Ford attempt to sell Jaguar and Land Rover
As Ford continues to work on the dissolution of their Premier Automotive Group, the coming new European Union carbon dioxide emissions rules could be playing an unwelcome factor. As with fuel economy rules here in the United States, the emissions limits would likely be averaged over the entire fleet of vehicles produced by a carmaker. For Mercedes their big high power AMG models would be offset by the 88g/km Smart ForTwo diesel. That's also probably a big part of why Porsche has bought a controlling stake in Volkswagen over the past year.
It looks like many of the potential bidders for Ford's two remaining British brands, Jaguar and Land Rover, are in the private equity business and won't necessarily have other car brands in their portfolio. The new rules could put a damper on the types of vehicles they build and limit the possible value of the brands. One possibility is that Ford could maintain a minority stake in both companies which may allow them to count their emissions along with the rest of the Ford fleet.
[Source: Detroit News]
Reader Comments (Page 1 of 1)
GregR 9:59AM (8/08/2007)
This is good news for the Indian and Chinese bidders who ship a ton of small cars.
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rgseidl 10:32AM (8/08/2007)
How the fleet average limit will be applied is currently the subject of negotations between the EU Commission and the carmakers. It's much to early to jump to any conclusions about what it all might mean for Ford's putative sale of any more of its European brands.
According to Der Spiegel, the main battle is between German carmakers (who dominate the high-margin upper end of the market) and their competitors from France and Italy (who do most of their business in the high-volume segments). The latest is that the Germans appear to have won a concession in that the fleet average limit will most likely not be applied per brand or manufacturer.
Instead, individual limits are to be applied for a number of weight classes. Details are still quite fuzzy, but these may reflect sales volume * CO2 rather than CO2 per vehicle. If the limit for a given class is not met in a given geography, all manufacturers who sold vehicles in that class will be fined based on their share of the excess emissions. A sticking point is if these fines will be paid to the EU, to individual member states or to more virtuous competitors (something the Germans are loath to do). Another proposal calls for carmakers to purchase CO2 emissions certificates, which could be tradable across industries.
The negotiations will be going back and forth for some time, stay tuned. The only thing that is already clear is that the Germans aren't going to let the French and Italians use CO2 emissions as a way to cripple its carmakers' brand identities, product lines or business models.
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rgseidl 10:38AM (8/08/2007)
@ Greg R -
Chinese and Indian manufacturers have miniscule shares of the EU market for LDVs. Chinese carmaker Brilliance just pulled its first model, a full-sized sedan, from the market because it had performed very poorly in Euro-NCAP crash tests (1 star out of 5).
There is a market for low-cost vehicles in Europe, mostly but not exclusively in the former Communist countries. However, Chinese and Indian manufacturers will still need a few years before their products will be good enough for export to the EU at any price. Not many years, but a few.
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