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      08-18-2010, 12:34 PM   #1
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BMW Working To Avoid Gas Guzzler Tax


BMW's goal is to implement fuel efficiency improvements so that its entire lineup avoids the gas guzzler taxes (on cars failing to achieve 22.5mpg). This could happen as early as the launch of each current model's next redesign. Currently, the M3, 550i, 650i, and 750i incur a gas guzzler tax.

TRAVERSE CITY, Mich. -- BMW AG hopes to get out from under the gas-guzzler taxes that are tacked on to the sticker prices of some of its high-performance models in the United States.

Jim O'Donnell, president of BMW of North America, says the company is studying fuel-efficiency improvements that could eliminate the gas-guzzler taxes on its vehicles as early as the launch of their redesigns in the next few years.

The 2010 550i GT incurs a $1,000 gas-guzzler fee, for example. The 650i convertible faces a $1,300 tax. And buyers of the 2010 750i pay $1,000, on top of a base price of about $82,000.

"We'd like to get away from it across the entire line," O'Donnell told Automotive News after a presentation at the CAR Management Briefing Seminars here.

"It's something we don't want to be labeled with. I think we can get there with small improvements."

The graduated gas-guzzler tax is prompted by a model's failure to achieve the minimum fuel efficiency of 22.5 mpg.

BMW's smaller competitor, Infiniti, moved its new-generation M56 sedan out of gas-guzzler status this year. It did so despite increasing horsepower from the previous-generation M sedan, which competes directly against the BMW 5 series.

But BMW is protective of its image as a maker of luxury, sporty cars, and it is not clear just how far the automaker might go to sidestep the tax.

BMW's racy M5 gets just 11 mph city/17 highway and incurs a $3,000 tax. But that five-liter, V-10-powered sports car is at the heart of BMW's image.

Yet BMW is taking surprising steps with its product line. O'Donnell noted that the company will debut a small electric car, currently called the Megacity Vehicle, in China in 2013.

The company has not said where else the electric car will be sold.

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