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Why You Can't Buy This Car

By Warren Brown
Wednesday, March 7, 2007

GENEVA, March 6 The Opel Corsa OPC is a little sports coupe that looks sharp, runs fast and gets 30 miles per gallon. It can be parked in the tightest of parking spots. It proves beyond any reasonable doubt that fuel-efficient cars don't have to be boring. And even at the stiff price of 34,664 Swiss francs -- about 22,000 euros in most of Europe -- Opel, the European subsidiary of General Motors, expects the Corsa OPC to be a big and profitable seller.

But Opel has no plans to bring that hot little number to the United States, where the Corsa OPC would list for about $30,000.

The reason: "Europe and the United States are two different worlds," says Robert Lutz, GM's vice chairman for global product development.

Consider the matter of gasoline prices.

At a fuel station near Geneva's Exhibition Palace (Palexpo), Tuesday's price of regular unleaded gasoline was 1.61 Swiss francs per liter. That works out to about $5 a gallon -- a bargain by European standards.

Prices for unleaded regular in bordering countries -- France, Germany, Austria, Italy, Liechtenstein -- run as high as $7.50 a gallon. Compare that with an average price of $2.48 a gallon in the United States.

"We could sell the OPC here and make money because gasoline is near $6 a gallon," Lutz said. "If we had $6 gasoline in the United States, we could sell it there at a profit, too," he said. But he said it is unlikely that Americans would buy a little car at $30,000 "when they're paying $2.50 for gasoline." "We need $6 gasoline" in America to make sense of the Corsa OPC in that market, Lutz said.

He has a point.

Even at Switzerland's lower gasoline costs, consumers say fueling their vehicles takes a big bite out of their operating budgets. So they behave accordingly. They drive when they must drive, as opposed to hitting the road for no particular reason. Carpooling is not a concept here. It is an economic necessity. Bicycles, petroleum-powered scooters and motorbikes, and small cars of all sorts are plentiful here. And they can be sold at a profit for their manufacturers because consumers recognize their value in reducing fuel costs.

What is happening this week and next at the Geneva International Motor Show, taking place at Palexpo, is instructive. The stars of the show are not the super-slick Ferrari and Lamborghini automobiles, though those cars, surrounded by exquisitely beautiful female models, are attracting their fair share of attention.

The real stars are the cars ordinary European consumers actually buy. They are micro cars, subcompacts and mid-size automobiles. Gasoline engines in the 1-liter range are commonplace. Diesel engines, generally about 35 percent more fuel-efficient than gasoline models, are everywhere. There are a few sport-utility vehicles on display, including a version of GM's Hummer. But most of the SUVs here are small by American standards. And full-size pickup trucks at the show, or on the streets of Geneva, are few and far between.

There isn't as much fuss here as there is in the United States over gasoline-electric hybrids, though there are a number of hybrid samples available for viewing. The problem is price. Gas-electric hybrids often cost substantially more than their traditional gasoline-powered rivals. And many European consumers, who already get high mileage from diesel-powered and smaller gasoline models, don't see an advantage in paying more for a technology that does not deliver a dramatic increase in fuel efficiency.

Curiously, from the viewpoint of an American long accustomed to homeland criticism of GM and other Detroit automakers as recalcitrant producers of gas guzzlers, GM is seen as a fuel economy leader here. The proof is on the Palexpo show floor.

In addition to the Corsa OPC (Opel Performance Center), there are the Opel Meriva Cosmo city wagon, the Opel Zafira compact minivan and the Opel Antara crossover vehicle. There also is a whole raft of small to mid-size European Chevrolet models, including the five-door Lacetti passenger car, the mid-size Epica sedan, the compact Kalos city car, the micro Matiz automobile, and city wagons such as the Tacuma and the Nubira.

Most of those models easily get 30 miles per gallon, and the smaller vehicles, especially those equipped with advanced diesel engines, get substantially better mileage.

"Are there two GMs?" I asked Lutz.

"No," he said. "There is one global GM serving a variety of very different markets. We try to do whatever we have to do to succeed in each market."

It is questionable whether that argument will succeed in Washington next week, when GM executives will go before what is expected to be a testy House Energy and Commerce Committee to be grilled on what the company is and isn't doing to make more fuel-efficient vehicles for the American market.

Top executives from Ford, Toyota, the Chrysler Group and the United Auto Workers union also will appear before the committee.

Lutz said GM will do whatever needs to be done to meet federal fuel-economy laws. But he said Congress has to do something to curb America's appetite for big cars and trucks to make any gasoline-conservation program successful.

America is in love with all things big, an affection afforded by low fossil-fuel prices, which today remain the lowest in the developed world. Big things -- cars, trucks, houses, restaurant-quality and -size kitchen appliances -- use more energy.

And American cars don't go as far on a gallon of gas. Automakers in the European Union have agreed to voluntary increases in fuel-economy standards next year that will lift the average to 44.2 miles per gallon, according to the Pew Center on Global Climate Change. In 2008, the United States is scheduled to remain at a standard of 24.9 miles per gallon.

"We build and sell big cars and trucks in the United States because that is what consumers there say they want," Lutz said.

"We also sell many fuel-efficient models in America," he continued.

"But the mix of smaller, more fuel-efficient models is bigger in Europe than it is in the United States. We need gasoline of 6 bucks a gallon to change that equation in America. If America really wants more fuel-efficient cars, which will mean more smaller models, it's up to the government to establish parameters in which that market will work," Lutz said.

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