A world leading energy and climate change consultancy Annex - Effect of regulations and standards on vehicle prices Final Report to the European Commission – DG Climate Action Ref: 070307/2010/570520/SER/A4 Report for Directorate-General Climate Action Date 23rd November 2011 Annex: Effects of regulations and standards on vehicle prices: Contents 1 Range of Car Prices for all size categories .............................................................. 3 1.1 Range of car prices for selected member states and size categories ............................... 4 1.1.1 Range of vehicle weights for all member states. ...................................................... 5 1.2 Key trends – analysis ......................................................................................................... 7 1.2.1 Average price and HC & NOx limit – normalised ..................................................... 7 1.2.2 Average weight, power, and fuel consumption – Normalised ................................ 10 1.2.3 Average price vs. safety features ........................................................................... 14 1.2.4 Average price vs. comfort features over time ......................................................... 18 2 Data collection and description ...............................................................................23 2.1 Introduction ...................................................................................................................... 23 2.2 The JATO dataset ............................................................................................................ 23 2.2.1 Attributes selected .................................................................................................. 23 2.3 Modifications/additions to dataset.................................................................................... 27 2.3.1 Adding environmental legislation time variables .................................................... 30 2.4 Limitations of the dataset ................................................................................................. 30 3 Removal of Multicollinearity .....................................................................................31 4 EuroNCAP results .....................................................................................................34 5 European Automotive fuel consumption testing ....................................................41 5.1.1 Background ............................................................................................................. 41 5.1.2 Discussion of changes to fuel consumption measurement standards ................... 41 5.1.3 Reported Fuel Consumption – VW Golf 1995-1998 ............................................... 42 5.1.4 Reported Fuel Consumption - Ford Escort 1995-1998 .......................................... 43 6 Questions for stakeholder interviews ......................................................................45 AEA in Confidence Ref: AEA/ED56221/Issue Number 4 2 Annex: Effects of regulations and standards on vehicle prices: 1 Range of Car Prices for all size categories The figures below provides further analysis into the range of vehicle prices for each category, illustrating both the minimum, average and maximum price for each year. In Figure 1-1, prices have been adjusted to 2005 Euro prices, with the arithmetic mean (average) shown with the narrow dark line. The shaded band shows the vehicle range between the minimum and maximum prices. Figure 1-1: Minimum, mean, and maximum car prices for different size categories for the six Member States (all in EUR 2005). AEA in Confidence Ref: AEA/ED56221/Issue Number 4 3 Annex: Effects of regulations and standards on vehicle prices: 1.1 Range of car prices for selected member states and size categories Figure 1-2 illustrates six examples of vehicle prices for specific vehicle categories within countries. We have decided not to illustrate all category/country combinations due to the large number of charts that would be presented. These charts illustrate the variation that exists over time within the vehicle categories. This can occur due to special model variants being on sale. For instance in the Italian Mini Car category, for just 2006 a special high performance Fiat Panda was released. The Italian Supermini category also has a noticeable change in maximum price from 2000-2005. This is due to the introduction of a high performance 3.0 litre V6 Renault Clio. Figure 1-2: Range of car prices for a selection of different size categories from individual member states (in EUR 2005) AEA in Confidence Ref: AEA/ED56221/Issue Number 4 4 Annex: Effects of regulations and standards on vehicle prices: 1.1.1 Range of vehicle weights for all member states. Vehicle weight has a large influence on fuel consumption and hence it is important to understand the trend in vehicle weight over time. Figure 1-3 below illustrates the maximum, mean and minimum weights for each vehicle categories over time. It can be seen that there is an upward trend in vehicle weight most vehicle categories. For example, the average weight of supermini vehicles increased by 23% between 1995 and 2010. In comparison to the distribution of vehicle prices above, the distribution of vehicle weights is much more symmetrical than the prices. This indicates that expensive, high feature model variants are not heavier than the cheaper, low feature variants. In some cases, high specification variants can actually weigh less than low specification variants due to the use of materials such as carbon fibre. AEA in Confidence Ref: AEA/ED56221/Issue Number 4 5 Annex: Effects of regulations and standards on vehicle prices: Figure 1-3: Range of Vehicle Weights for given vehicle size categories for all the six member states AEA in Confidence Ref: AEA/ED56221/Issue Number 4 6 Annex: Effects of regulations and standards on vehicle prices: 1.2 Key trends – analysis In this section multiple vehicle attributes are evaluated over time to enable visual comparison. However due to the different data ranges of the attributes, it is not possible to compare these adjacent to one another within the same graph. Hence these values have been normalised with the first year of the sample having the value of 1. This is achieved by dividing all the values by the first year, which is 1995. The exception to this is fuel consumption, which has 1997 equalling 1 due to the changes in the fuel consumption reporting that took place during 1995-1997. This is discussed in Annex 5. 1.2.1 Average price and HC & NOx limit – normalised Figure 1-4 and Figure 1-5 illustrate the relationship between average vehicle price and HC & NOx limits. To enable a direct comparison, both levels have also been normalised, with the 1995 prices set to 1, and all subsequent prices relative to that. It can be seen that the diesel limits are gradually falling over the 15 year period, whereas the petrol limits are heavily reduced in 1996 due to the introduction of the EURO 2 standard. AEA in Confidence Ref: AEA/ED56221/Issue Number 4 7 Annex: Effects of regulations and standards on vehicle prices: Figure 1-4: Correlation between the normalised average price (2005 EURO) and the HC & NOx emissions limit for each vehicle size category. AEA in Confidence Ref: AEA/ED56221/Issue Number 4 8 Annex: Effects of regulations and standards on vehicle prices: Figure 1-5: Correlation between the normalised average price (2005 EURO) and the normalised HC & NOx emissions limit for each vehicle size category. AEA in Confidence Ref: AEA/ED56221/Issue Number 4 9 Annex: Effects of regulations and standards on vehicle prices: 1.2.2 Average weight, power, and fuel consumption – Normalised This section compares weight, power and fuel consumption over the period 1995-2010. As can be seen in Figure 1-6, there is a similar trend for all vehicle categories, with fuel consumption decreasing, despite max power and weight increasing. In some cases the increase in power is quite stark, such as the supermini and lower medium categories, which have around a 40% increase in average max power over the 15 year period. This is achieved with around 20% reduction in fuel consumption. AEA in Confidence Ref: AEA/ED56221/Issue Number 4 10 Annex: Effects of regulations and standards on vehicle prices: One of the examples where weight has not increased is the MPV category, which can be attributed to the increase in market share of compact MPV’s, which have a smaller volume and corresponding weight. Between 1997 and 2005, the 4x4 SUV category does not actually have a decrease in fuel consumption due to a large increase in average power in the period, as MPV’s become more popular as cars for urban consumers as well as rural. Figure 1-6: Comparison of Normalised values of Average Vehicle weight (kg), Max power (HP), and Combined Fuel Consumption for period of 1995-2010 (fuel consumption measured from 1997) AEA in Confidence Ref: AEA/ED56221/Issue Number 4 11 Annex: Effects of regulations and standards on vehicle prices: AEA in Confidence Ref: AEA/ED56221/Issue Number 4 12 Annex: Effects of regulations and standards on vehicle prices: Figure 1-7: Comparison of Normalised values of Average Vehicle weight (kg), Max power (HP), and Combined Fuel Consumption for period of 1995-2010 (fuel consumption measured from 1997) AEA in Confidence Ref: AEA/ED56221/Issue Number 4 13 Annex: Effects of regulations and standards on vehicle prices: 1.2.3 Average price vs. safety features This section correlates