TOP NEWS
February 26, 2008
CHERRY HILL, N.J. – Subaru of America, Inc.’s 2008 PZEV Legacy, Outback, and Forester 2.5L naturally aspirated models have received the Environmental Protection Agency’s (EPA) SmartWay certification and are now listed in its Green Vehicle Guide that recommends the cleanest and most fuel-efficient vehicle choices.
The EPA Green Vehicle Guide uses emission levels and fuel economy values to determine environmental scores for cars and trucks. Vehicles with very good or superior environmental scores are indicated with the SmartWay or SmartWay Elite designation. Every vehicle listed in this guide meets minimum federal emission and fuel economy requirements. Three pieces of information about a vehicle’s environmental performance are presented: the Air Pollution Score, the Greenhouse Gas Score and, if eligible, the SmartWay or SmartWay Elite designation.
Together, they give a complete picture of the relative environmental performance a vehicle is expected to achieve. The SmartWay and SmartWay Elite designations are assigned by the EPA to those vehicles that score well on both the Air Pollution and Greenhouse Gas Scores.
Copyright © 2009 Automotive Fleet. All Rights Reserved.
Tags: EPA, PZEV, SmartWay Certification, Subaru
Market Trends
September 9, 2008
By Mike Antich
When fuel prices crossed the $3.25 per gallon threshold, fleets began looking for ways to downsize vehicles or opt to four-cylinder engines. For commercial fleets, this trend is also part of a corporate sustainability initiative and/or fuel spend/GHG reduction program. The shift to four-cylinder engines is broad-based and includes companies such as Bausch & Lomb, Owens Corning, Kraft Foods, Johnson & Johnson, Merck, Abbott, Infinity Insurance, etc. One consequence to this increased demand for four-cylinder models is that fleets have increased their purchases of import-badged vehicles.
Fleet management companies, which handle new-vehicle fleet orders from a broad cross-section of companies, also report seeing an increase in fleet orders for import-badged vehicles.
The latest ordering statistics from PHH Arval show a near doubling of market share for imports for the January to August 2008 calendar year versus same time last year. “We expect the trend to continue into 2009,” said Greg Corrigan, VP, strategic business intelligence for PHH Arval.
“Between model-years 2007 and 2008, and even as clients are preparing 2009 selectors, we have noticed an increase in demand for import vehicles and vehicles with four-cylinder engines,” said Jan Freund, director - manufacturer relations for Wheels Inc. ”Import vehicle purchases by Wheels clients increased by 2 percent from 2007 to 2008. Based on client ordering templates and early order activity for 2009, it appears likely that trend will continue. One of the key factors for customers developing their vehicle selector for model-year 2009 has been the cost of fuel, and therefore, four-cylinder vehicles have received a lot of consideration.”
However, ongoing high demand for four-cylinder import-badged models in the retail marketplace will limit the degree of their fleet penetration.
“We are also seeing more specs for four-cylinder vehicles and more interest than we have seen in past years for four-cylinder imports. I definitely think we will see a slight uptick in four-cylinder import orders as a result. Pricing and availability due to high consumer demand for these vehicles still has an impact on limiting the total volume increase for the 2009 model-year. I should point out that we are seeing the same increased interest in the higher-performing four-cylinder vehicles now offered by domestic manufacturers,” said Tim Martin, vice president, operations for LeasePlan USA.
A survey of the fleet departments for Toyota, Mazda, Nissan, and Subaru indicates they are experiencing an increase in commercial fleet orders.
Toyota reports that from January-August 2008, its commercial fleet sales are up 25 percent compared to the same period last year, according to Scott Heyer, corporate manager, fleet for Toyota Motor Sales USA. One factor contributing to this increase has been a jump in hybrid sales to commercial fleets. “Commercial fleet orders (not counting rental) for the Camry Hybrid have witnessed dramatic growth for the January-August 2008 timeframe, compared to the same period last year,” said Heyer. “For all Toyota hybrid models, commercial orders, excluding rental sales, are up 63.5 percent for the same timeframe.” However, the increase in commercial fleet sales experienced by TMS has been part of a multiyear trend. “We have been experiencing 20-percent year-over-year growth in our commercial fleet sales for the past four years,” said Heyer. (Interestingly, TMS reports sales for the Camry V-6 gasoline engine are stronger than those of the four-cylinder model. For the second quarter 2008, orders for the Camry four-cylinder model accounted for 34 percent of all commercial fleet orders, compared to 66 percent for the V-6 Camry.)
Nissan reports a “considerable increase in commercial fleet sales” for 2008, but declined to divulge the percent of increase. “Without question, more and more companies are transitioning from eight- and six-cylinder engines to four-cylinder. With Nissan offering a fuel-efficient line of four-cylinder engines in Versa, Sentra, Altima, and Rogue models, our commercial sales are up considerably over last year,” said Bob Topor, fleet sales manager, commercial, leasing, government and alternative fuel vehicles for Nissan North America.
Mazda also reports an increase in commercial fleet orders. “The dramatic increase in fuel expenses has increased the interest of fleet managers to look towards more fuel-efficient vehicles,” said Robert Fecher, national manager, fleet operations & remarketing for Mazda North American Operations. “We are seeing greater interest in the four-cylinder vehicles versus the six-cylinder, which has been the engine of choice historically for commercial markets. Mazda is fortunate to have a wide array of vehicles with fuel-efficient, four-cylinder engines. The all-new 2009 Mazda6 is an example of this trend towards four-cylinder engines. As we launch this new Mazda6, the commercial accounts inquiring about this vehicle are specifically asking for quotes for four- and six-cylinder engines. In the foreseeable future, it looks like four-cylinder vehicles will be the engine of choice for the commercial market,” added Fecher.
Likewise, Subaru of America is reporting a year-over-year increase in commercial fleet sales. “For the 2009 model-year, Subaru of America has signed a number of new fleet accounts and it is still very early in the model-year. It is a little too soon to calculate the specific impact of these new accounts as ordering has yet to begin in earnest with some larger new accounts,” said Charles Reed, manager, national fleet sales operations for Subaru of America (SOA). “Subaru commercial fleet continues to experience year-over-year sales growth; and with a major price repositioning by SOA in the 2007 model-year, the pace of commercial fleet growth is now exceeding forecasted growth levels. Additionally, many of SOA’s new and existing accounts are going ‘green’ and have opted to order SOA’s SmartWay Certified, PZEV models to complement their own internal, corporate green initiatives,” added Reed.
Reasons for Shift to Four-Cylinder Models
A mid-size sedan equipped with a four-cylinder engine achieves, on average, a 10-percent improvement in combined city-highway fuel economy. There is a reduction not only in fuel spend, but also in cap cost. The cost of a four-cylinder engine in mid-size cars is $1,000-$2,400 less than a V-6. The high price of gas is just one reason why many commercial fleets are investigating the acquisition of four-cylinder models. The other reason was to reduce vehicle emissions as part of a green fleet initiative to conform to corporate-wide sustainability focus.
In addition, switching to a four-cylinder engine allows a car fleet to maintain the same size vehicle necessary to meet its fleet application without downsizing to a smaller model.
One reason for spec’ing six-cylinder engines in past years was driver morale. In years past, many drivers complained about underpowered four-cylinder engines. However, powertrain technology has evolved to the point where many unsophisticated drivers may have difficulty discerning a four-cylinder from a six-cylinder. Today’s four-cylinder engines provide better performance than the six-cylinder engines of yesteryear.
Another reason cited by fleet managers for the switch to four-cylinder engines is that they currently enjoy high demand in the wholesale resale market. Although this has been occurring for the past several years, it is a historical anomaly. In the past, vehicles were penalized in the wholesale resale market if they were not equipped with six-cylinder engines. No more. This will most likely remain the case for the foreseeable future or as long as gas remains over $3.50 per gallon.
Let me know what you think.
Author: Mike Antich | Posted @ Tuesday, September 9, 2008 11:19 AM
Copyright © 2009 Automotive Fleet. All Rights Reserved.
Tags: downsizing vehicles, Fleet, fuel prices, import-badged vehicles, Market, new-vehicle fleet orders, Penetration
ARTICLE
October 2008, Automotive Fleet - Feature
CIGNA Corporation, a health services and benefits company, and Liberty Mutual Insurance are among a growing number of U.S. companies incorporating partial zero emissions vehicles (PZEVs) in their fleets as part of “green” or environmentally friendly initiatives.
PZEVs are modern vehicles with advanced engines equipped with cutting-edge emissions controls. They run on gasoline and generally offer extremely clean emissions with zero evaporative emissions. PZEVs offer varying levels of fuel mileage, but don’t always provide fuel efficiency much better than current model-year averages.
PZEVs Meet State Standards
Even though fueled by gasoline, PZEVs emit significantly less nitrous oxides (NOx) or carbon monoxide (CO) fumes, decreasing vehicle-produced air pollution, even compared to hybrids. PZEVs are 97-percent cleaner than typical gasoline-powered vehicles. They also meet or exceed all state emission standards.
The PZEV category was created as part of an informal agreement between automotive manufacturers and the California Air Resources Board (CARB), so that manufacturers could postpone producing federally mandated zero emission vehicles (ZEVs), which require the production of electric or hydrogen fuel cell vehicles.
To qualify as a PZEV, a vehicle must meet the super ultra low emission vehicles (SULEV) standard, produce zero evaporative emissions from its fuel system, and offer an extended warranty (15-year/150,000-mile) on its emission-control components, which incidentally, covers the propulsion electrical components of a hybrid-electric vehicle.
PZEV vehicles also must meet tight emission test requirements for volatile organic compounds (VOC), NOx, and CO. Cost and technical issues related to battery-electric vehicles led to a modification of the ZEV mandate that resulted in the PZEV, which allows automakers to meet their quotas through partial zero credits.
According to 2007 research developed by the RAND Corporation, a nonprofit institution that helps improve policy and decision-making through research and analysis, PZEVs are an economical way to reduce ozone-forming emissions. Since PZEVs are conventional gasoline-powered vehicles, they require only incremental improvements on an existing and proven technology, rather than an entirely new technology.
Emissions of hydrocarbons from Volvo’s PZEV engine (available in such models as the S40) are less than 0.001 the levels typical of cars built before the advent of catalytic converter technology. Catalytic converters were first introduced in the mid-1970s to comply with tightening EPA regulations on auto exhaust as a way to reduce the emission toxicity of emissions from internal combustion engines. In dense city traffic, a PZEV engine exhaust may even be cleaner than the ambient air.
One drawback is that few makes and models are available with a PZEV option, limiting choices for fleet managers. However, PZEV vehicles are now available throughout the country and in all 50 states.
CIGNA Deploys PZEVs in Fleet
The comparable cost for including a PZEV option in a new-vehicle order is reasonable. At CIGNA, in Bloomfield, Conn., ordering the Subaru Forester with the PZEV option cost an estimated $220 extra per vehicle, according to Bryan Peters, CIGNA vice president for corporate services, operations, and environmental sustainability. He is a member of a CIGNA leadership team charged with developing an environmentally friendly policy that extends across the organization.
Importantly, PZEVs do not negatively impact the drivability of CIGNA’s nurses and case managers who typically use the company’s fleet vehicles, said Peters.
“The overriding benefit of PZEV vehicles is that they are very good for the environment,” Peters noted.
Beginning with 2009 models, all CIGNA Forester purchases will be required to have a PZEV feature. Currently, these models comprise about one-third of the company’s approximately 500 fleet vehicles.
CIGNA has taken a variety of other strategies to promote a green fleet initiative. PZEVs will increasingly comprise a larger part of that program. Like other companies, CIGNA primarily deploys six-cylinder vehicles. Many of its fleet vehicles are also E-85 capable. Hybrids will also be added to the fleet where it makes sense.
Through e-mails and other communications to its drivers, CIGNA proactively distributes tips on conserving gas and energy. Drivers use a fuel card program, and Peters plans to engage in additional proactive vehicle data mining to ensure drivers use approved fuel grades and to track increases in fuel efficiency.
“I think all companies feel the need to engage in increased awareness about green initiatives, particularly with fleet vehicles,” Peters said. “We have a significant amount of grassroots interest among our employees.”
Cigna’s deployment of fuel-efficient, environmentally friendly fleet vehicles and the company’s other green initiatives have additional benefits. Some mutual fund managers are asking companies what they are doing to engage in better environmental sustainability, which can put a company’s stock in a positive light, Peters said.
Liberty Mutual Selects PZEVs
Liberty Mutual Insurance in Boston has developed a green fleet program that also includes 21 Subaru Forester PZEVs, used by the company’s assessors and sales team. That number is likely to rise in the coming years as Liberty Mutual expands its corporate-supported environmentally friendly culture.
Liberty Mutual’s corporate strategy targets energy consumption whenever possible, and its fleet initiatives are just one step the company is taking, said Fleet Administrator Linda Bent. Four of its fleet vehicle makes and models include fuel-efficient features, with 28 percent of the fleet using flex fuels (primarily Chrysler Sebrings and Dodge Grand Caravans) and 2 percent are PZEVs. In all, Liberty Mutual’s fleet counts nearly 2,650 environmentally friendly vehicles.
“Choosing the proper vehicle selector is step one, and we have and will continue to do that,” Bent said. “What we also want to do is impact driver behavior.”
To change driver habits, the company provides all corporate fleet drivers tire pressure gauges and sends them tips on how to better conserve fuel.
Copyright © 2009 Automotive Fleet. All Rights Reserved.
Tags: Automotive, Green Fleet, Green News, PZEV