The extra costs of building more fuel-efficient cars could prove ruinous to some European manufacturers, experts have warned.
According to a study by ISI Automotive, the automotive industry as a whole will have to spend “around £10bn between now and 2022” in order to comply with the EU’s fleet average C02 target figure of 95g/km.
ISI said most of what in engineering terms is “low-hanging fruit”, such as downsized engines and a greater focus on low rolling resistance and aerodynamic efficiency, has already been exploited, but making the next step in fuel efficiency will be much more expensive.
“Having studied reports from the European Environment Agency, the International Council on Clean Transport and the European Commission, we think that these [new generation] cars will require an extra £842 in [engineering] content,” said ISI’s report.
Although this amount might not seem huge, it is a significant percentage of the factory cost of building a car. The average mass-market manufacturer only makes a profit margin of between £250 and £320 per car.