The Manufacturing Perspective - Automotive News

The Manufacturing Perspective:
Public Policy, Fuel Regulations and Energy
Automotive News World Congress
North American International Auto Show, Detroit Michigan
Tuesday, January 10, 2012

Ten Key Points
(1) Automakers are making significantly cleaner, safer and more energy-efficient autos;
the public gets it.
(2) Auto industry is seen as progressive on the environment.
(3) In today’s world, the public puts growth over the environment.
(4) Consumers enjoy an expanding range of options for energy-efficient technologies,
including advancements in ICEs.
(5) Consumers prefer to motivate fuel efficiency gains themselves.
(6) Automakers invest billions in R&D… with only 1% from government.
(7) To meet new federal standards, consumers will need to buy fuel-efficient vehicles in
higher volumes / ratios.
(8) The U.S. is a different marketplace than Europe – especially vis-à-vis diesel.
(9) A multi-sector approach to energy policy is crucial to success.
(10) Consensus on goals and fundamental direction; political and economic realities will
impact implementation

1
Public Sees Profound Progress
How do you view the progress the auto industry has made over
the past several years?
40%
48%
11%
88%
Source: Public Opinion Strategies
of Americans see some or strong
overall progress in the auto industry
Automakers today have made STRONG technological advances
improving quality, safety, fuel efficiency, and environmental impact
Automakers today have made SOME progress in building better cars
but need to go farther
Automakers have NOT adjusted to the times and are NOT making
advances in technological to improve quality, safety, fuel efficiency
and environmental impact

2
Auto Industry Seen as Progressive on the
Environment
Who has made the most improvement in environmental
progress over the past decade?
Mining
Oil & Gas
Lumber/Paper
Agriculture
Automakers
Source: Public Opinion Strategies
0 10 20 30 40

3
In Today’s World, Growth is Primary Driver
24% 27%
49%
Source: Public Opinion Strategies
Satisfied with current balance
Protecting the environment
Encouraging economic growth

4
Manufacturers Have Increased High Mileage
Vehicle Choice by Nearly 300%
Number of High Mileage Models Available to U.S. Consumers
300
250
200
150
100
50
93
Source: www.FuelEconomy.gov
270
(High mileage vehicles are defined as autos that achieve 30(+)mpg highway)

5
Consumers Bet on Themselves to Improve
Fuel Economy
Americans believe the market paves the way
to automotive advances
Source of innovations? Best approach to improving fuel economy
68%
Automakers
27%
Source: Public Opinion Strategies
Consumer demand through their
purchase of cars with better fuel
economy
Government mandates to
improve fuel economy
Increasing gas taxes to push
consumers toward more fuel
efficient cars
58%
30%
10%

6
Automakers Huge Tech Investors
R&D Funding Sources by Industry, 2007
Several other industries, all of which comprise a smaller share of GDP and national
employment than automotive, often receive a substantial amount of R&D funding
from the Federal government.
Source: National Science Foundation

7
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Hybrid Sales: Steep Rise But Still Fractional
Hybrid Sales in Ten Years
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
IN PERSPECTIVE:
In 2010 one pick up truck
outsold all hybrids
Source: Ward’s Automotive
3%
2%
1%
Hybrid
Sales
Market
Share

8
The U.S. is a Different Marketplace than Europe
U.S. Lags Europe in Clean Diesel Sales
U.S.

9
Key Components of an Effective Energy Policy for
Manufacturers
Long-term, consistent policies
Federal leadership with complementary roles for state and local
governments
Allow for wide range of technology pathways
Increase availability of alternative fuels and fueling infrastructure
Recognize that consumers ultimately will pick winners

10
Political and Economic Realities Drive
Implementation