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and added emphasis to the PNGV purpose to reduce passenger-car fuel consumption.

On the other hand, during this time the demand for sport utility vehicles (SUVs) and pickup trucks has increased to 46 percent of new light-duty vehicle sales. Due to their larger size and weight these vehicles have reduced the average new light-duty vehicle fleet fuel economy from 25.9 mpg in 1987 to 24 mpg in 2000 (EPA, 2000). There is also an implication that, if these lower-fuel-economy vehicles continue to dominate market share, the fleet average fuel economy will continue to decline. Also, the promulgation of Tier 2 emission requirements by the EPA potentially increases fuel consumption of all new cars and will postpone or possibly preclude the widespread use of diesel engines in light-duty vehicles in the United States.

During the past several years foreign and domestic competition in the automotive industry has become ever more difficult to define. Foreign companies (including DaimlerChrysler) produced about 45 percent of the new cars and light trucks sold in 1999 in the United States (U.S. Business Reporter, 2001), and GM and Ford both have added numerous overseas subsidiaries and collaborators to their corporate structures.

This new context for the PNGV makes it timely to consider whether the original goals should be altered to fit the changed situation while recognizing the substantial accomplishments already gained in pursuing the program so far.

PROGRAM PERSPECTIVES

Goal 1

Goal 1 relates to national competitiveness in manufacturing of vehicles. Improvements in manufacturing are clearly needed in order to make high-efficiency vehicles affordable and therefore marketable. In some cases manufacturing innovations are needed simply to make certain that new technologies are technically feasible. Thus, many PNGV activities in response to Goal 1 are easily justified as addressing critical barriers to success in Goal 3.

On the other hand, in today's context the broad issue of U.S. vehicle manufacturing competitiveness is very complex and unlikely to be seriously impacted by a program with the size and characteristics of the PNGV. The USCAR participants spend huge sums on developing manufacturing technologies as a part of their core business activity. It is true that these companies are in serious competition with foreign auto companies in the market, and manufacturing cost is an important element in that competition. But today all the USCAR participants are global marketers, all have foreign subsidiaries, one is a foreign-owned company, and there are even R&D collaborations with foreign companies aimed at the development and manufacture of major vehicle components (e.g., GM and



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