Porsche Threatened with Extinction in America

Obama is planning new fuel economy standards for automobiles. For German sports car manufacturer Porsche, that could have fatal consequences.

The German sports car maker Porsche is threatened with stiff penalties and even a possible withdrawal from the American market. The reason is new U.S. fuel economy standards proposed nationally by President Obama that could take effect as early as next year. “We’ve secured a waiver for model years 2012 to 2015,” Chief Lobbyist Stephan Schläfli told the newspaper Financial Times Germany. But the waiver expires with the 2016 model year.

Up to the current year, Porsche had to achieve an average consumption for its fleet of 5.7 liters per 100 kilometers (about 41 MPG), then it has to reduce it’s average consumption by about 10 percent per year beyond that, something Schläfli says is not technologically possible.

German manufacturers disadvantaged

If the legislation passes in its present form, German luxury carmakers would suffer the most. Critics say that’s no coincidence because the formulas used to calculate the standards were designed to give American manufacturers an advantage.

The calculations are based on vehicle wheelbase and track width — unusual criteria for fuel economy. Because the Porsche sports car is compact and has a relatively short wheelbase, it is required to meet much stricter mileage requirements than the Corvette made by General Motors. Pick up trucks, which make up a large portion of GM and Ford sales, will face much more lenient economy standards.

Walter Lewis, who represents Porsche in U.S. agency matters, told the newspaper it wasn’t the government’s responsibility to determine winners and losers in the auto industry, and added that what was being contemplated wasn’t environmental policy but business policy.

$37,500 penalty per car

Porsche has been paying penalties for years because it exceeds government mandated fuel economy limits. These have only amounted to a few hundred dollars per vehicle in the past and those increases were passed on to the consumer. “The new law raises the maximum penalty to $37,500 per car,” Schläfli said, adding, “We won’t be able to afford that.”

In order to achieve the average economy target, Porsche plans to offer its Cayenne and Panamera models with hybrid drive. Schläfli explained that Porsche’s model line wasn’t the determining factor. “For the authorities, it’s all a matter of how many vehicles we sell,” he added.

Porsche got into financial difficulties because of overreaching during Volkswagen’s planned takeover of its firm.