Can Ford and GM Turbocharge Their Way Out of Consumer Reports' Latest Test Results?

In light of Consumer Reports’ recent determination that turbocharged vehicles, like those made by Ford F and General Motors GM, “have slower acceleration and no better fuel economy than the models with bigger, conventional engines,” investors are left to wonder what, if any, impact this latest finding will have on sales.

If the latest news out of China is any indication, Ford has little to worry about. The Associated Press reports that Ford said sales of Ford-brand vehicles, including imports, rose 135 percent to 44,439 vehicles there in January.

General Motors said earlier that its sales of GM-brand vehicles in China rose 26 percent in January to a monthly record of 310,765.

Consumer Reports magazine tested a wide variety of these turbocharged vehicles, and even contests the EPA fuel-economy estimates on the vehicles, saying the cars didn’t match up.

The Los Angeles Times reported that Ford released a statement in response to the turbo testing saying that the magazine's "findings are not consistent with our internal and external feedback. It shows EcoBoost vehicles lead in customer satisfaction for fuel economy across segments -- including surveys by J.D. Power."

General Motors also released a statement implying that the testers might have driven more aggressively than the average Cruze owner does. “If you have a heavy foot on a turbocharged engine, you're not necessarily going to see a lot of fuel economy benefits.”

Since the middle of 2009, Ford has been aggressively marketing its EcoBoost engines, which feature a turbocharger and promise greater fuel efficiency. The company has sold more than a half million models with EcoBoost engines.

"Our customers are very happy with their EcoBoost vehicles," said Sherwood. Many of those customers paid between $700 and $900 extra to buy a model with an EcoBoost engine.

Stricter government policies are putting pressure on automakers to improve mileage. As standards change over the next 7 years, results will reveal which manufacturers make the grade.

Ford hopes the fuel-cell technology it will produce with Nissan NSANY, Daimler AG DDAIF, and Renault will ultimately be the answer to its problems. With Toyota TM and BMW also working on fuel-cell systems — not to mention the competition from alternative hybrid technologies and the possibility of poor acceptance of fuel-cells, the road ahead will not be smooth.

Ford finished Thursday down about 1 percent while GM was down about 0.2 percent.

Posted In: NewsEventsGeneraldaimler agFordGeneral MotorsToyota
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...