The 2009 New York International Auto Show is in full swing now, running through April 19th in Manhattan. This turned out to be an excellent opportunity to continue our ongoing discussion of CAFE standards, environmentally friendly engineering and the future of the automotive industry in the United States.

Before beginning we will need to offer up full disclosure. TMV was invited to the Auto Show as guests of the Alliance of Automobile Manufacturers, who did not pay us any form of remuneration, but did provide travel and accommodation expenses. We are under no obligation to publish anything on behalf of the association and the opinions expressed are strictly my own, but you can take from that what you will.

During a tour of the show, I had the opportunity to interview A.A.M’s Senior Director of Communications, Charles Territo and get a feel for where we stand in 2009 and where we go from here. In terms of both CAFE standards and economy for the consumer, there were a number of encouraging offerings on display. There was a 3rd generation Prius, rated at 50 mpg highway for $28,000 and a Chevy Aveo (34 mpg) for just over $12,000 MSRP. (That was a surprisingly low price for a new car.)

Still, these numbers didn’t strike me as all that impressive in most cases and I took the opportunity to ask Mr. Territo about the apparently slow rate of progress in fuel efficiency. I pointed out that it was technically last century when certain presidential candidates assured us that, within ten years we would all be driving cars that got 75 mpg. What the hell happened?

He surprised me by answering, “We can manufacture cars today that get 75 miles per gallon.” Fortunately, before my head exploded, he went on to explain the statement. The technology exists to manufacture such vehicles, but they would cost a fortune to bring to the consumer today and wouldn’t really resemble the types of vehicles which Americans are accustomed to and willing to purchase. We can all feel great about purchasing a car that gets better gas mileage, but if we only save $5,000 in gas over the life of the vehicle and it costs $20,000 more to purchase, they won’t be flying off the lots in droves.

In addition to straight up, gasoline powered internal combustion engines, we also touched on the future of alternate fuels such as E85. In Mr. Territo’s opinion, corn based ethynol isn’t dead, but the technology certainly seems to be moving in other directions. The industry has been engaged in supplying such vehicles, but again, progress is driven by consumer demand. There are currently more than seven million flex fuel cars on the road, but that’s still a relatively minor part of the market share. The final solutions, he explained, were unlikely to come in the form of one silver bullet, but would be more regional in nature, depending on the needs and appetite of the consumer. Ethanol may take hold in some areas, while others might rely more heavily on electric cars or even hydrogen fuels.

Fully electric cars were also on display, with some models being available now, but many more remaining in the concept stage. We saw the Gem e4, which has a range of more than 40 miles on one charge and the all electric Mini E. On the plus side, assuming we can move our national power grid to more green energy sources, these types of vehicles seem like a great option in theory. Particularly since connections are available to recharge the cars with either 220 or 115 AC sources, they may be viable options for local transportation, both cheaply and cleanly. To be honest, though, the current state of some of these cars was a bit shaky in my view. We looked at one all electric concept model which, frankly, seemed like little more than a very fancy golf cart. Yes, it serves the stated purpose, but when you slam the door the entire vehicle seems to threaten to buckle. I wouldn’t be surprised if it could be totaled out by a motorcycle doing suburban speeds. Still, the technology is advancing and they may find a niche market even today.

In all of these scenarios, infrastructure presents a major challenge, much of which is beyond the scope of the manufacturers to address. In order for gas stations to aggressively carry flex fuels, the demand has to be there to justify it. In the case of hydrogen fueled cars, there is virtually nowhere in the country yet where you could refill your tank. These things will likely be coming, but it takes time. Mr. Territo compared the auto industry to an aircraft carrier in that regard. It takes a long time for the industry to change speed and direction. Some of the new, more fuel efficient cars on display at the show this year began on the drawing board as much as ten years ago.

So what does the future hold for America’s automobile manufacturers? We talked about the anger many Americans have expressed toward the Big Three, similar to the outrage expressed at the banking industry. The bottom line there was that it’s still too early to say what automobile manufacturing will look like in the years to come. Nobody wants to see their tax dollars wasted, and the industry is well aware of the need for fuel economy standards by the government. But by the same token, as Mr. Territo put it, “The technology is catching up, but you can’t mandate the laws of physics.”

Stay tuned for some more updates from our excursion to the show, including information on consumer fuel saving measures and other alternate energy sources for transportation.

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