If you are in the market for a new car or truck, your may have been wondering why the stickers on the windows show MPG estimates that are not overwhelming. In fact, they are lower than the previous estimates. It's the change brought on by the EPA's new system for estimating mileage. Beginning with 2008 models, the process for estimating how far a car or truck can go on a gallon of gas now factors in more real world elements such as driving a car in hot or cold weather, using air conditioning, or people accelerating quickly. When you include those factors, cars and truck mileage estimates fall - sometimes by quite a bit.
The Toyota Prius under '07 estimates would get a combine 55 MPG. Under the new '08 standards it gets 46.
The Honda Accord hybrid goes from 31 to 27 MPG.
The all-wheel-drive Cadillac Escalade drops not as far: from 15 to 14 MPG.
James Healy, the excellent auto reporter at USA Today has more on the change in estimates in today's paper. It's worth checking out.
The Chrysler Auction:
According to the Financial Times, at least four private equity firms have expressed interest in buying Chrysler. DaimlerChrysler's banker JP Morgan is handling the auction of the American division is in the process of talking with prospective buyers. Aside from talks with General Motors, we've heard very little about other automakers having an interest in Chrysler. Doesn't mean that all of them are not at least checking out the automaker. From talking with people on Wall Street and in Detroit there is interest among many automakers, but whether or not they are serious is very much in doubt.
Private equity buyers for Chrysler would face the same hurdles with Chrysler's pension and legacy costs. And, unlike being bought by another automaker, a Chrysler owned by private investors would not have the size and scales of economy needed to compete in the global auto business. Chrysler by itself is a regional automaker. That makes it tougher to lower costs.
I still believe that there is a strong chance at the end of all this, DaimlerChrysler decides to hold on to the Chrysler division.