GM eyes possible increase in ethanol-fueled car output
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By John D. Stoll
Last Update: 3:38 PM ET May 18, 2006
DETROIT (MarketWatch) -- General Motors Corp. (GM) said Thursday it's looking to potentially increase the number of vehicles it builds each year that are capable of running on ethanol.
GM powertrain chief Tom Stephens, speaking to reporters at a briefing to announce new engine and transmission initiatives, said the company currently builds 400,000 vehicles annually capable of running on both ethanol and gasoline. He said the company builds 14 different models with ethanol capacity at present and that it is looking into possibly building more.
GM, along with U.S. competitors, have been heralding an increased commitment to ethanol as an alternative fuel. High gasoline prices and the popularity of hybrid vehicles that run on a combination of gasoline and battery power have paved the way for potential demand for ethanol-powered vehicles.
However, limited commercial availability of ethanol fuel has played a role in limiting demand for vehicles that can run on the fuel.
Stephens said GM is making a concerted effort to improve its entire lineup of transmissions and engines and the company will introduce 19 new or significantly revised engines or transmissions in the 2007 model year.
The company's lineup of 2007 model year vehicles has started hitting dealerships and will continue being rolled out over the balance of the year. Stephens said GM's investment in vehicle powertrain is part of an effort to respond to "intense competitive pressure."
He said the company, which is losing market share in the U.S. and posted a $10.6 billion loss last year, remains committed to a long-term mission of being "the world leader in transportation products."
GM is banking on being able to respond to an increased demand for fuel economy. Stephens said the auto maker is the market leader when it comes to the "over-30-miles-per-gallon club." He said the company offers 14 products capable of 30 miles per gallon of fuel.
While GM claims a variety of fuel economy advantages, Chief Executive Rick Wagoner said in an interview last week that the company's image has been impacted by not having a hybrid vehicle - such as the Prius model sold by Toyota Motor Co. (TM) -sooner.
GM will soon launch its first-ever hybrid vehicle and it plans to eventually offer 10 models fitted with hybrid technology. Still, the company only sees hybrid technology as a near-term solution.
Stephens said the company is investing heavily in researching and developing hydrogen-powered vehicles, which GM expects to one day replace conventional cars that run on gasoline. Hydrogen vehicles will "take our vehicles out of the environment debate...we've got a huge program on trying to make that happen," Stephens said.
Stephens said the company is pumping a higher percentage of powertrain department resources into making fuel-economy gains.
"Based on where we spend our money," he said, "fuel economy is number one." GM is spending $8.6 billion on new products in 2006, with much of that pumped into the powertrain department.
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