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April 8, 2007 7:20 pm

Foreign carmakers doubt Detroit’s ethanol

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Asian and European carmakers in the US have expressed doubts about their Detroit-based rivals’ aggressive push to use ethanol instead of imported oil.

General Motors, Ford Motor and DaimlerChrysler’s Chrysler division are in the forefront of a campaign for wider acceptance of E85, a mixture of 85 per cent ethanol and 15 per cent petrol. They have already put several million “flex-fuel” vehicles capable of running on either E85 or petrol on the road.

But Mike Stanton, president of the Association of International Automobile Manufacturers, said that his members were “skittish” about E85. “We have not endorsed it as fully as the domestic companies have,” Mr Stanton said in an interview. The association’s members include the three major Japanese carmakers – Toyota, Honda and Nissan – as well as Renault of France and several other European manufacturers.

E85’s proponents see ethanol, made from corn and other vegetable material, as a quick way of reducing oil imports. The federal government has thrown its weight behind ethanol with a 51 cent-per-gallon subsidy.

On the other hand, critics blame the E85 drive for pushing up food prices, and point to significant obstacles to wider acceptance. For instance, only 1,100 out of 170,000 US filling stations sell E85.

Oil companies have so far been reluctant to promote E85, and questions have been raised about the impact of ethanol on vehicle warranties. With consumers yet to show a clear-cut preference for any alternative-fuel technology, both domestic and foreign carmakers have hesitated to put all their eggs in one basket.

Several foreign carmakers produce E85 vehicles, or have plans to do so. But Mr Stanton said these initiatives were largely based on a fear that “we’ve got a train in front of us”.

A Nissan official added that even though his company’s Armada sport-utility vehicle and Titan pick-up truck can run on E85, “we are more enthusiastic about diesel and electric”.

Several European carmakers, notably Volkswagen, DaimlerChrysler’s Mercedes division and BMW, plan to launch new “clean” diesel models in the US over the next year or two in the hope of overcoming Americans’ long aversion to diesel.

The Detroit-based companies are conducting research into electric vehicles, hybrid petrol-electric vehicles and fuel-cells, but have given most prominence to E85, especially in farm states where loyalty to their vehicles remains strong.

Ford sent letters to 29,000 owners of its flex-fuel vehicles in Missouri last month helping them to locate E85 stations. GM has agreed to promote 40 E85 stations to be built this year in Colorado.

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