• by Thom Forbes  @tforbes, July 7, 2011

"Sure, we can produce vehicles that meet your stinkin' proposed fuel economy standards," automakers seem to be telling policy makers in Washington, "but those tiny little boxes may move off the lot about as fast as the Santa Monica Freeway in rush hour."

As John M. Broder reported in the New York Times Monday, the Obama administration would like to require new American cars and trucks to attain an average of as much as 56.2 miles per gallon by 2025, which would require increases in fuel efficiency of nearly 5% a year from 2017 to 2025.

"We can build these vehicles," says Gloria Bergquist, vp for public affairs at the Alliance of Automobile Manufacturers. "The question is, will consumers buy them?" And, in a statement, the National Auto Dealers Association warns, "to reach a 56 mpg standard would mean a tremendous shift in the types of vehicles consumers buy," pointing out that hybrids and plug-in electric vehicles now account for less than 3% of the domestic market and asserting that number would have to grow to 50%.

It seems that once you land on these shores, you not only develop a craving for Twinkies, cold beer and unreal reality television shows but also for vehicles that can accommodate the extra heft created by the first two items (and their brethren). Vehicle emissions and mileage standards in the U.S. lag as much as 10 mpg behind the rest of the world, Broder reports, with Europe expected to reach about 60 mpg by 2020. That doesn't mean that Europeans all wear white suits, however.

As Sharon Terlep and Mike Ramsey report in the Wall Street Journal this morning, high-performance brands such as Mercedes, Porsche and Jaguar are perhaps even less enamored of the proposed fuel economy regulations, which could result in steep fines -- as much as $25,000 a vehicle beginning in 2016, up from current levels of $5 to hundreds of dollars per vehicle -- or even result in some models being banned.

"This is basically an attack on the way they do business because the things they traditionally sell are based on size and power," Edmunds.com analyst Bill Visnic tells Terlep and Ramsey. "To do something like this is essentially putting them out of business here."

Negotiations in Washington are continuing. An editorial in this morning's Sacramento Bee ruefully speculates that the administration is backing off from a 56.2-mpg standard, citing recent remarks by Transportation Secretary Ray LaHood: "We are going to talk to our friends in the industry. We are going to make sure we get it right for them and for what we believe is in the best interest of the country."

The Bee suggests that "California could play the role of leader should Obama get weak in the knees," while acknowledging "this is the last thing Detroit wants."

It may be true, as the Detroit Free Press' Gred Gardner reported in March, that although car manufacturers are spending billions to meet the government's current 2016 fuel economy law, "consumers aren't buying enough of the fuel-efficient vehicles necessary to allow automakers to achieve the required 35.5 miles-per-gallon average."

The 2010 Explorer with a 4.0-liter V6 was rated at 14/20 mpg, Gardner's story points out. "But if everyone buys a leaner version of the same vehicle being replaced, that won't be enough for automakers to meet the government's average fuel economy standard of 35.5 mpg by 2016 -- unless they're selling mostly passenger cars and large volumes of hybrids."

But then there's this week's story by the AP's Dee Ann Durbin that discusses a "hiring spree" by automakers in the U.S., who are ramping up production to meet pent-up consumer demand. Lo and behold, Volkswagen's new plant in Tennessee, hiring 2,000 workers, makes Passats. Marketing materials for the 2012 Passat TDI Clean Diesel claim it "can get an impressive 795 miles on one tank of diesel fuel -- getting you from the Passat model's Chattanooga plant to Dallas without a single pit stop."

Honda is looking for 1,000 workers In Indiana to meet demand for its parsimonious Civic. And General Motors needs 2,500 folks in Detroit to build the Chevy Volt, an electric car.

"Besides hiring 2,000 people itself, Volkswagen figures the plant, where it will make its new Passat, will create 9,000 spin-off jobs in the region, including 500 at auto-supplier plants that are springing up nearby," Durbin writes. And James Brock, a professor of economics at Farmer School of Business at Miami University, says: "I really do believe that we are seeing a renaissance in the American automobile industry."

A renaissance, it would appear, that efficient, high-mileage vehicles will fuel whether we "want" to buy them or not. In fact, will we really have any choice but to buy the smaller cars? Or will we become Cuba Norte, hoarding our Galaxy 500s and rebuilding the engines on our discontinued Hummers until the floorboards rust out?