Gear Wars: The Race For an Eight-Speed Car In Bid to Boost Fuel Economy, Wide Range of Auto Makers Soup Up Transmissions By JOSEPH B. WHITE and NORIHIKO SHIROUZU Staff Reporters of THE WALL STREET JOURNAL August 18, 2005; Page D1 In a quest for a new kind of competitive edge, auto makers are pouring billions of dollars into creating cars with six, seven or possibly even eight forward speeds. The burst of investment in automatic transmissions with more than the traditional three or four gears is being driven by growing demand for better fuel economy, as well as car makers' need to outdo rivals in a crowded market. Mercedes is moving to offer seven-speed transmissions in most of its new models. Volkswagen AG's new Jetta compact car offers a six-speed automatic transmission as an option. Ford Motor Co. will soon offer a six-speed automatic on its Explorer sport-utility vehicle as part of a design overhaul for the 2006 model this fall. In addition, "Ford has got a lot of six-speeds in the pipeline," says Craig Renneker, Ford's chief engineer for new automatic-transmission programs. SHIFTING UP Auto makers are rolling out cars with more gears. See a chart with several examples. Toyota Motor Corp.'s Lexus brand is going even higher. It is working on an eight-speed automatic transmission, industry executives say. A spokesman said Lexus wouldn't comment on any future product plans. General Motors Corp. -- racing to catch up in the gear wars -- is working with Ford on a new, jointly designed six-speed transmission that will start appearing in GM vehicles in 2006. By 2010, GM plans to produce three million six-speed transmissions a year, up from a projected one million by 2008, says Tom Stephens, GM's group vice president in charge of world-wide powertrain operations. With more gears, auto makers are able to eke out improvements in fuel efficiency while advertising a sportier performance. In a six-gear system, the low gear delivers more power when launching from a stop; the high gear allows the car's engine to cruise with less effort at highway speeds, saving gas. Mr. Renneker compares the effect to the three-speed and 10-speed bikes he once had. With the lowest gear on the 10-speed, "you could climb a very steep hill," he says. Meanwhile, with the top gear, "you could get the bike going a lot faster." The fuel savings vary by the type of vehicle, but Casey Selecman, an analyst at market researcher CSM Worldwide Inc., says going from four speeds to six can yield an improvement that can range from 3% to 7%. For a vehicle that averages 20 miles per gallon, that can boost mileage to 20.6 to 21.4 mpg. Averaged over a 15,000-mile year of driving, the fuel savings could be as much as 50 gallons, or more than $100. That's not a lot, but with car makers under pressure to improve their fuel-economy figures, incremental gains can add up. Overall, the trend represents potentially billions of dollars in investments in engineering and new production equipment. GM and Ford have jointly invested more than $700 million in their joint transmission project. By 2010, the number of vehicles assembled in North America, Europe, Japan and South Korea with five-, six- or seven-speed transmissions could reach about 10.8 million, up from an estimated 5.7 million this year, according to CSM Worldwide. But in North America alone, the share of six-speed automatic transmissions is expected to rise from just 3% of production now to 40% by 2010, Mr. Selecman says. There is substantial disagreement, however, over when more gears are better for drivers. A spokeswoman for DaimlerChrysler AG's Mercedes-Benz, which is rolling out seven-speed transmissions on several of its new luxury vehicles, says seven-speed transmissions help improve fuel economy and improve acceleration. They also help to reduce engine noise, because the additional gears allow the engine to run at lower revolutions per minute on the highway. Gears as a Marketing Tool Other auto makers say more is not necessarily better. Beyond using the number of gear speeds as a marketing tool -- "We have seven and somebody says 'We have eight,' " -- GM's Mr. Stephens says there's no significant benefit in terms of fuel economy to pushing beyond a six-speed automatic transmission. Mr. Stephens is also skeptical of continuously variable transmissions, which use belts and pulleys instead of gears. Another issue, says Ford's Mr. Renneker, is that consumers may not like the way these new, plus-gear transmissions drive. "That's my biggest concern, that customers will feel it shifting too often," he says. "We are continuing to work to refine our shift busy-ness." Sticking With Five Speeds Some companies are going slow on upshifting to six-speed transmissions. Honda Motor Co. executives say for now they're satisfied with the performance of the company's five-speed automatic transmissions. It's not that Honda engineers aren't experimenting with a gearbox with a higher number of gears, company executives say, but they see going beyond the five-speed transmission now offered on the Accord, the CR-V, the Pilot, the Odyssey and the Acura MDX as unlikely to offer the kind of fuel-economy benefits that the cost of such a project calls for. At the Chrysler Group, DaimlerChrysler's U.S. mass-market unit, the company is phasing in five-speed automatic transmissions in its popular Chrysler 300 C sedan. Its minivans, such as the Dodge Caravan, currently ride with four-speed automatics. "I don't think consumers are counting how many forward gears they have in the transmission," says Steve Bartoli, Chrysler's vice president for strategy. "But they do understand how they feel about a performance level ... and they're gaining more awareness of fuel economy." Balancing those needs can mean using different technology in different vehicles, he says. "There's not one canned answer." Write to Joseph B. White at joseph.white@wsj.com and Norihiko Shirouzu at norihiko.shirouzu@wsj.com
