DaimlerChrysler to boost SUV fuel efficiency

June 21, 2002

STUTTGART, Germany - Bloomberg News reported that DaimlerChrysler AG is modifying the Dodge Durango sport-utility vehicle's engine to gain an edge in fuel efficiency over Ford Motor Co., Toyota Motor Corp. and other rivals.

The world's No. 5 carmaker is improving the Chrysler division model's gasoline consumption by 14 percent to an average 20.5 miles a gallon (13.4 liters per 100 kilometers). Changes include reducing friction and increasing fuel pressure in the cylinders.

Sport-utility vehicles and other light trucks make up about half of the U.S. market and are even more important for DaimlerChrysler, accounting for 73 percent of Chrysler's U.S. vehicle sales in the first five months of this year. Higher sales would help the carmaker return to profit.

"Competition is definitely going to pick up in the mid- to long term in fuel efficiency in SUVs," said Arndt Ellinghorst, an analyst at WestLB Panmure, who has a "neutral" rating on the stock. "If they can use this as a marketing tool, it could give them an advantage."

DaimlerChrysler and other carmakers have been criticized by environmental groups for sport-utility vehicles' consumption of gasoline. The vehicles aren't classified as cars under U.S. federal law, so they're exempt from more stringent fuel-use regulations. Even with the higher cost of filling up more frequently, customers prefer them.

"In the North American market, fuel economy is not a major criterion for customers," said Tom Moore, vice president for technical affairs, in an interview. "These are good ideas, but they cost money."

DaimlerChrysler can't afford to alienate car buyers with costlier vehicles as it tries to bring Chrysler back to profit this year. The U.S. division had a $4.7 billion operating loss last year.

The changes would boost the price of the $36,620 Durango by $200, the company said. The investment would pay for itself in two years for someone driving 15,000 miles a year and paying $1.50 a gallon for gasoline.

Sport-utility vehicles are an average one-third less fuel efficient than passenger cars, according to Friends of the Earth, an environmental group. Every gallon (3.8 liters) of gasoline burned generates 20 pounds (9.07 kilograms) of carbon dioxide, the group said.

"This is a nice gesture" by DaimlerChrysler, said David Hirsch, a spokesman for Friends of the Earth. "But they can still do a lot better and the question has to be raised: Why haven't they done this before?"

Engineers' ideas for improving fuel efficiency often aren't tried out because the forecast savings don't justify the cost of tests and a design flaw may hold up a new model's introduction, DaimlerChrysler's Moore said. DaimlerChrysler bundled research into several incremental changes together, instead of working on the ideas separately.

A Durango using the new engine would beat the efficiency of Toyota's Highlander, which gets 18 miles a gallon, and Ford's Explorer, which gets 17 miles to the gallon. DaimlerChrysler's Jeep Grand Cherokee gets 17 miles a gallon. The Toyota Prius, a so-called hybrid vehicle with an electric motor as well as a gasoline engine, achieves 41 miles a gallon.

"Fuel efficiency is really a political question," said Krista Kepler, an auto analyst at Merck Finck. "DaimlerChrysler would love to play the good guys. If they could use this as a marketing measure, it could help against other SUVs."

The modifications focus on the fuel-air mixture, which is ignited in an engine's cylinders to produce power, and the crankshaft, which is attached to the pistons in each cylinder and delivers the power to the wheels.

A fuel channel was insulated to keep gasoline warm after it's heated by the exhaust system and before it's sprayed into the cylinder. The piston can compress a warmer fuel-air mixture more tightly to produce more power when the fuel is ignited.

Engineers also shifted the crankshaft's center of rotation 16 millimeters to one side, instead of leaving it directly below the moving piston. The modification cuts the net friction, which reduces power, as the piston moves.

The company has begun initial testing of the engine and plans to start road tests in August. The company expects to include most of the features in all new Chrysler sport-utility vehicle engines, though it hasn't set a timetable for their introduction.

"If prices rise and consumers begin to feel the pain, it could give DaimlerChrysler a competitive edge," said Michael Raab, an analyst at Bank Sal Oppenheim.