TURIN -- Volkswagen, Fiat and other European makers of thrifty cars could earn billion of dollars in operating profits from U.S. President Barack Obama's proposed fuel economy standards.
European automakers may finally be in position to push their home-field advantage in fuel economy and emissions into the world's largest car market, Adam Jonas of Morgan Stanley wrote in a note to investors last week.
The United States accounts for about 25 percent of global sales -- last years volume was 13.2 million cars -- but only 5 percent of European automakers sales.
Tougher emissions rules in the United States will increase the need for fuel-efficient models, which could be very lucrative for Europeans.
Each 1 percent of the U.S. car market represents approximately $1 billion of incremental pretax profit, Jonas said.
Reachable target for Europeans
Under the proposed new standards, U.S. passenger vehicles and light trucks must average 35.5 miles per gallon (6.62 liters per 100km) by 2016.
That converts into about 152 grams of CO2 per kilometer.
The average CO2 from new passenger cars sold in Europe last year was 154 grams per kilometer, according to the European auto manufacturers association, ACEA.
Morgan Stanley predicts that these four European automakers will benefit most from proposed new U.S. standards:
Renault -- because of its ability to introduce technologies through its alliance partner Nissan, which is well-established in the United States
Fiat -- because of the opportunity to make its technologies available through its Chrysler partnership
Volkswagen -- because of its leadership in small, low-emissions vehicles
PSA/Peugeot-Citroen -- because of its expertise in diesel engines and its successful history as a supplier of its engines to other automakers.
Jonas noted that BMW and Daimler also have experience producing large, heavy, high-performance luxury vehicles that usually offer better fuel economy than their non-European rivals.
European automakers will face even tougher emissions rules at home in the future. CO2 from new cars sold in Europe will be cut to 120g/km by 2015. That is roughly 23 percent below the U.S. goal for 2016.