Daimler Falls Behind In CO2 Race, Says Report

Daimler came under pressure from a couple of sources saying that it had fallen behind in the race to meet tough new European Union CO2 rules, but a third report pointed out that this was not the case.

Investment bank Morgan Stanley’s auto analyst Stuart Pearson said the gap between BMW and Daimler’s average fleet CO2 emissions meant that the maker of Mercedes and Smart cars would suffer a €2 billion pricing pricing disadvantage as it struggled to bridge the gap. Pearson was using JATO Dynamics data which showed BMW and Mini’s average fleet CO2 emissions were 147.9 g/km in 2010 compared with Mercedes, Maybach and Smart’s 163.3 g/km.

To reach their 2015 E.U. targets and avoid stiff fines BMW will need to cut its fleet CO2 by 7.1 per cent to 138.1 g/km, while Daimler needs to slash its average by 19.8 per cent to 136.4 g/km, according to JATO.

According to the report, Toyota and Peugeot-Citroen were closest to meeting E.U. targets, while Mazda, and Nissan joined Mercedes as laggards.

If investors rushed to the exits to dump their Mercedes shares, they should have read another report from Citigroup Global Markets, which pointed out that this was not the case, and that the JATO data provided an outdated perspective

Bolt it on
“Mercedes has been doing considerable catch-up. The face-lifted C class, on sale in the first quarter and starting at 117 g/km of CO2 seems to fully match best in class elsewhere in the sector. In our opinion, Mercedes didn’t place a high priority on fuel economy early enough. But the technology required to catch-up is mostly supplier technology in any event, so, once programmed into Mercedes product action programme, it can achieve similar results to peers,” said Citi analyst John Lawson.

But another issue might well intervene in any arguments over average CO2 emissions. Environmentalists are getting increasingly uneasy about the ease with which European car makers are posting strong looking improvements in fuel consumption which may not be borne out in the real world. E.U. tests for fuel economy take place in laboratories and consist of a series of parameters, none of which involve actually driving on roads. Manufacturers say this means all the data can be compared reliably between all cars. Critics say this is like providing data about how cars perform on the moon. Sure, the data would be perfectly comparable, but worthless on the road.

Jos Dings, director of Brussels-based Transport and Environment green campaigners, criticized manufacturers’ data.

“(Results) are less and less a reflection of what we are seeing on the road,” Dings said.

There was a difference between the amount of CO2 a car emitted during a controlled test and it produced when actually driven.

“That gap used to be 20 per cent but has risen to as high as 50 per cent for models as sub-100 g/km cars,” said Dings.

Neil Winton – April 15, 2011