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Why We Could be Driving Fiestas

The new Ford Fiesta is a perky subcompact four-cylinder car that with the right transmission option can get an impressive 40 miles to the gallon on the highway. It also might represent the future of the American car, particularly if California succeeds in its push to make cars two to three times more fuel efficient by 2025 than they were in 2009.

The Obama administration is expected to start soon the process of setting the fuel efficiency targets auto makers must meet in the U.S. market for the years 2017 to 2025. The state of California—which last year struck an agreement with the federal government that Washington’s rules will match the state’s aggressive agenda to cut automotive greenhouse gas emissions—has put its bid on the table.

It wants auto makers to boost their fleets’ average fuel economy by 3% to 6% a year from the 35.5 miles per gallon target already set for 2016. That would put the nation on track for a 50 to 60 miles per gallon average fuel economy target by 2025. That doesn’t mean every vehicle a car maker sells would have to average 60 miles per gallon. But many would.

Is this impossible? Not really. The average fuel efficiency of U.S. cars increased by 67% between 1975 and 1987, to 22 miles per gallon from 13.1 miles per gallon. Technology available, or in sight, could get the U.S. fleet to that level if used widely enough, says University of Michigan researcher John DeCicco in a recent paper, “A Fuel Efficiency Horizon for U.S. Automobiles.”

But to get there, far more of us would have to choose cars like the 2011 Fiesta—or the hybrid Toyota Prius or the all-electric Nissan Leaf—than Range Rovers or Maseratis or Mercedes E-Class sedans.

The Ford Fiesta is an entirely different kind of small car. The top of the line SES model I tested recently is chock full of big car features—front airbags, side curtain airbags, and even knee airbags. It has stability control, anti-lock brakes, automatic dimming mirrors, and even a voice-activated sound system that can synchronize with your phone or music player.

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The Ford Fiesta as it looked when it arrived in the U.S. in 1978, top. A 2011 Fiesta, right.

The Fiesta with a manual five-speed transmission is rated at 37 mpg on the highway. But spring for the “PowerShift” six-speed automatic, which uses a double-clutch system increasingly common in Europe, and the Fiesta’s rated highway mileage pops up to 40 mpg.

Here’s the catch: A loaded Fiesta can cost close to $19,000, list price. That used to be a lot for a small car. Not any more. The Fiesta has a flock of capable, small competitors in the U.S., including the Honda Fit, Scion xD and Hyundai Accent. All start around $15,000.

To make a profit on small cars in the U.S. today, auto makers have to offer a car that is stylish, safe and fun to drive so people won’t mind paying a comparatively high price per pound to cover the cost of the fuel-saving and safety technology. And to get the highway mileage of my stripped-down Starlet, the Fiesta would need a hybrid electric drive, or more exotic lightweight materials, raising the cost even more.

Auto makers have good reasons to go along with government efforts to mandate higher fuel economy. Europe and China are ahead of the U.S. in demanding advanced petroleum-saving technology. In Europe, for example, the European Union has set a target for average carbon dioxide emissions of 95 grams per kilometer by 2020—the equivalent of about 65 miles per gallon. That means a lot of highly efficient diesel subcompacts.

If the U.S. clings to gas guzzlers, it risks becoming what IHS Global Insight automotive analyst Eric Fedewa calls a “technology island,” as U.S. manufacturers would be making cars with no appeal anywhere else in the world.

In the short term, auto makers fear that not enough of the relatively affluent people who buy new cars have the fond feelings for subcompacts that I do. This goes double for the Detroit brands, whose 1970s and 1980s small cars weren’t their finest creations. Remember the Ford Pinto? How about the Cadillac Cimarron?

If Fiesta sales boom, it will give a boost to those who say the mainstream U.S. market is ready to embrace high-tech, highly efficient, small cars. If not, that’s a sign that it really is all about the pump price.

From Joseph B. White, “Why we Could be Driving Fiestas”. The Wall Street Journal, September 28th

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