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Last Updated: Wednesday, 12 January, 2005, 00:00 GMT
Detroit goes to work on its green image
Stephen Evans
By Stephen Evans
BBC North America business correspondent

Sometimes you might think that the big auto-makers are a branch of Greenpeace or disciples of the Sierra Club or followers of Friends of the Earth.

Ford takes great pride in showing off the grass roof of one of its factories in Detroit. Its executives point to the bee hives in the shadow of the plant as though the company's prime product was honey. General Motors urges people to "Get Green".

Ford Escape
Demand for hybrids has sparked a swift response from car makers
At the North America International Auto Show in Detroit this week, the companies are falling over themselves to assert their green credentials.

Ford unveiled a hybrid version of its Escape sports utility vehicle - an sports utility vehicle (SUV) powered by a "hybrid" engine that can switch between petrol and electricity as a fuel source, so economising on the burning of gasoline.

General Motors presented a prototype of its hybrid SUV called GMC Graphyte and insisted it has several models in the pipelines. It's working with DaimlerChrysler on new engine technology for hybrids.

Legislation and awareness

What has changed is that the industry now thinks the demand is there, or rather, that it will be there.

Thad Malesh of the Automotive Technology Research Group said he expected as many as fifty hybrid models on the US market by 2010.

The research firm, JD Power and Associates, sees hybrid sales of over 500,000 vehicles by 2010, or nearly 3% of the overall US market.

The American car-makers have been driven by a variety of forces.

Legislation is on the way, particularly in California where the state is set to insist that the emission of greenhouse gases from exhausts is cut by about 30% in the next ten years.

And it's a regulation backed by California's governor, Arnold Schwarzenegger (despite his endorsement of the Hummer), so it's likely to happen.

GMC Graphyte
GM insists its GMC Graphyte is the first of many hybrids

And there does also seem to be some popular demand for greener products. Americans have seemed far less aware of environmental issues than Europeans and Japanese. perhaps because of wide open spaces in America give the illusion that the environment is limitless.

That, though, seems to be changing, at least in the rich markets of California and the East Coast.

Prius ahead

The Detroit auto-makers also fear that the Japanese have stolen a march on them.

Motown is still where car company executives mingle with automotive journalists to discuss strategy for the year ahead

Toyota sold some 54,000 of its popular Prius hybrids in America last year, double the sales of 2003.

That remains a drop in the ocean compared with the seventeen million vehicles that were sold in the market, but demand is out-stripping supply, no doubt helped by movie stars like Cameron Diaz and Leonardo DiCaprio, who are members of the Prius club.

Global warming

All this has to be put into perspective.

The Detroit car-makers have changed, there's no doubt about that. It wasn't so long ago that they seemed loath to admit that there was such a thing as global warming. let alone that burning gasoline might cause it.

Now, they accept it: Ford recently published a newspaper advert saying simply: "Global Warming. There. We said it."

But they'll be driven by the market and the market still likes big, powerful petrol engines.

As General Motors' Vice Chairman, Bob Lutz, put it: "Right now the drive for more and more power in cars is way larger than the drive for more and more hybrids."

To emphasize the point, GM unveiled its fastest car ever, the new Corvette Z06, as well as the Cadillac STS-V, powered by a supercharged V-8 engine that delivers the most horsepower of any Cadillac.

The trick will be to get power plus fuel-economy. The car makers haven't turned into herbivores quite yet, but they do now realise that fuel economy may sell cars and make them money - eventually.


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