Hehe, wait till the new M3 and M5 start selling.....
Cost of Doing Business: BMW pays record CAFE penalties
HARRY STOFFER | Automotive News
Posted Date: 9/20/04
WASHINGTON -- BMW's rise in the United States has come with a cost: record fines for violating U.S. fuel economy standards.
BMW North America Inc. paid more than $42 million in fines during the government's 2003 fiscal year. That year ran from Oct. 1, 2002, to Sept. 30, 2003.
The fines will be reported when the National Highway Traffic Safety Administration issues its next annual report on the corporate average fuel economy program, or CAFE.
The figure represents penalties of $14 million for BMW's 2002 model-year cars and $28 million for 2001, the automaker confirms. BMW had the option of paying both years' fines in a single federal fiscal year.
Porsche Cars North America Inc. paid the second-largest fine in 2001: $5 million.
BMW's 2001 fine amounted to about $137 per car sold during that model year.
For model years 1998 through 2002, BMW paid CAFE fines of about $96 million. That's more than double the $43 million the automaker was penalized for the previous five model years. Figures for the 2003 model year are not available.
NHTSA records indicate that the $28 million payment is the highest by any automaker in a year, although inflation adjustments would make it smaller than some in past years.
The previous largest payment was $20.5 million from Mercedes-Benz USA Inc. for 1987.
BMW is among a handful of companies that have accepted CAFE fines as a cost of doing business. The Big 3 say meeting CAFE standards is part of good corporate citizenship.
BMW spokesman Gordon Keil says the automaker builds "the cars our customers want to buy."
Fast cars with superb handling and luxury features weigh more and use more fuel, Keil says. "If there are penalties, so be it," he says.
Others are discarding that view.
After Daimler-Benz AG bought out Chrysler Corp. in 1998, executives said they intended to have their combined fleet meet CAFE standards. NHTSA records show they are getting close.
DaimlerChrysler told NHTSA it expected its imported cars, mostly Mercedes-Benz models, to average 27.1 mpg in the 2004 model year. That would fall just short of the 27.5 mpg standard for cars.
Dennis Fitzgibbons, DaimlerChrysler's executive director of public policy, says the automaker has not owed CAFE fines since the 2000 model year. It has taken advantage of various credit provisions in the program. And its stake in Mitsubishi Motors Corp. has enabled it since 2001 to use Mitsubishi CAFE numbers to offset Mercedes shortfalls in calculating the performance of its import fleet.
BMW does not make the least fuel-efficient vehicles. But a limited product mix and rising sales create conditions for the penalty.
In 2001, the year of the $28 million fine, BMW sold about 204,000 cars that averaged 25.0 mpg.
In 1997, when the automaker was fined $11.8 million, its fleet average was better at 25.7 mpg.
BMW sold 131,000 cars in the United States that year, NHTSA records show.
The fine is $5.50 for each 0.1 mpg below the car standard of 27.5 mpg, multiplied by sales.
BMW's trucks, mainly the X5 SUV, have been close to the truck standard of 20.7 mpg.
Its truck sales are more modest - about 42,000 last year.
Cost of Doing Business: BMW pays record CAFE penalties
HARRY STOFFER | Automotive News
Posted Date: 9/20/04
WASHINGTON -- BMW's rise in the United States has come with a cost: record fines for violating U.S. fuel economy standards.
BMW North America Inc. paid more than $42 million in fines during the government's 2003 fiscal year. That year ran from Oct. 1, 2002, to Sept. 30, 2003.
The fines will be reported when the National Highway Traffic Safety Administration issues its next annual report on the corporate average fuel economy program, or CAFE.
The figure represents penalties of $14 million for BMW's 2002 model-year cars and $28 million for 2001, the automaker confirms. BMW had the option of paying both years' fines in a single federal fiscal year.
Porsche Cars North America Inc. paid the second-largest fine in 2001: $5 million.
BMW's 2001 fine amounted to about $137 per car sold during that model year.
For model years 1998 through 2002, BMW paid CAFE fines of about $96 million. That's more than double the $43 million the automaker was penalized for the previous five model years. Figures for the 2003 model year are not available.
NHTSA records indicate that the $28 million payment is the highest by any automaker in a year, although inflation adjustments would make it smaller than some in past years.
The previous largest payment was $20.5 million from Mercedes-Benz USA Inc. for 1987.
BMW is among a handful of companies that have accepted CAFE fines as a cost of doing business. The Big 3 say meeting CAFE standards is part of good corporate citizenship.
BMW spokesman Gordon Keil says the automaker builds "the cars our customers want to buy."
Fast cars with superb handling and luxury features weigh more and use more fuel, Keil says. "If there are penalties, so be it," he says.
Others are discarding that view.
After Daimler-Benz AG bought out Chrysler Corp. in 1998, executives said they intended to have their combined fleet meet CAFE standards. NHTSA records show they are getting close.
DaimlerChrysler told NHTSA it expected its imported cars, mostly Mercedes-Benz models, to average 27.1 mpg in the 2004 model year. That would fall just short of the 27.5 mpg standard for cars.
Dennis Fitzgibbons, DaimlerChrysler's executive director of public policy, says the automaker has not owed CAFE fines since the 2000 model year. It has taken advantage of various credit provisions in the program. And its stake in Mitsubishi Motors Corp. has enabled it since 2001 to use Mitsubishi CAFE numbers to offset Mercedes shortfalls in calculating the performance of its import fleet.
BMW does not make the least fuel-efficient vehicles. But a limited product mix and rising sales create conditions for the penalty.
In 2001, the year of the $28 million fine, BMW sold about 204,000 cars that averaged 25.0 mpg.
In 1997, when the automaker was fined $11.8 million, its fleet average was better at 25.7 mpg.
BMW sold 131,000 cars in the United States that year, NHTSA records show.
The fine is $5.50 for each 0.1 mpg below the car standard of 27.5 mpg, multiplied by sales.
BMW's trucks, mainly the X5 SUV, have been close to the truck standard of 20.7 mpg.
Its truck sales are more modest - about 42,000 last year.
![[:D]](/images/smilies/biggrin.png "Big Grin [:D]")