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Business Minds Magazine Summer 2007

Auto Innovations
THAT SAVE MONEY


New technologies and alternative fuels offer small businesses a way to offset rising energy costs


by Chris Freeburn

 
Running your business


K eeping your company’s vehicles running is getting more expensive all the time. Maintenance and repair costs never seem to go down, and gas prices continue to skyrocket. These rising costs are compelling the major automotive manufacturers to develop new technologies aimed at mitigating the costs associated with operating a vehicle.

Hybrid Engines
Filling up your vehicle’s gas tank can be a painful experience these days. To combat the rising price of gas, carmakers are looking at alternative fuels and engines that can accommodate them. Hybrid vehicles—whose engines combine a battery with a traditional combustion engine—like the Honda Accord and Civic Hybrids, Nissan Altima Hybrid and Toyota Camry Hybrid get considerably more miles per gallon of gas, according to government tests. The Honda Civic Hybrid, for example, outperformed the standard Civic on EPA tests, racking up 49 miles per gallon on city roads, compared to 30 miles per gallon city and 40 miles per gallon highway for the standard Civic. Unfortunately, a hybrid’s ability to produce more miles per gallon comes at a higher sticker price, due to the extra cost of the batteries and other engine equipment. Hybrid vehicles will save your company money in the long run, but generally only if you keep the vehicles for at least five years.

Alternative Fuels
An alternative to hybrid vehicles is flex fuel vehicles (FFVs), which use a blend of up to 85% ethanol (E85) in combination with gasoline. Aside from their ability to use ethanol, FFVs are otherwise indistinguishable from standard vehicles. In theory, FFVs should cost less to operate since ethanol is less expensive than gasoline. But, like hybrids, the advantage has a downside. Ethanol provides less energy than gas, meaning that vehicles using E85 will get about 25% fewer miles per gallon than when running on gasoline. Additionally, ethanol is still only commonly available on a regional basis with the nation’s 900 ethanol fueling stations concentrated almost exclusively in the upper Midwest and South.

E-Mail Maintenance Management
Keeping your vehicles running properly means spotting problems before they result in a costly breakdown. GM’s popular OnStar system offers a vehicle diagnostics service, which analyzes the vehicle’s performance and systems and sends a monthly e-mail to the owner’s e-mail account with the results, along with regular service reminders. “This tool can really reduce costs for small business people operating several vehicles since it alerts them ahead of time that one of their vehicles needs maintenance,” says Fritz Beiermeister, director of sales and marketing for GM’s OnStar division.

More Efficient Engines
In addition to looking at new fuels, automobile makers are using technology to reduce the amount of fuel an engine needs to work. Taking advantage of the fact that V6 and V8 engines can produce large amounts of power, but spend most of their time operating at a fraction of their capability, GM has introduced Active Fuel Management (AFM) for its larger models such as the Envoy, Yukon, and Trailblazer, as well as on certain mid-sized passenger sedans. AFM increases engine efficiency by deactivating half of the engine’s cylinders when the vehicle is engaged in low-energy operations, like crusing on the highway. This change produces a six to eight percent reduction in fuel use by such engines, according to the Environmental Protection Agency.