CAR EXHAUSTS generated a lot of hot air at the recent Geneva motor show and led to the resignation of the leader of the German automotive industry.

Bernd Gottschalk, former head of the Mercedes-Benz truck division, quit last weekend as president of the VDA, the German association of the motor industry, after claims that it had failed to defend the carmakers’ position on global warming as the European Union proposed stiff limits on carbon-dioxide emission.

Gottschalk, who is also the head of the international association of motor vehicle manufacturers, resigned under pressure from Mercedes, BMW and Porsche.

These premium-car makers complain that the VDA has not done enough to highlight the progress they have made in reducing exhaust emissions and improving fuel consumption — thereby reducing the output of carbon dioxide, the “greenhouse gas” that scientists claim is the main contributor to global warming. And, although they do not state it publicly, the manufacturers are disappointed they did not receive more support from the German chancellor Angela Merkel when the European Commission in Brussels proposed legislation limiting carbon-dioxide emission to an average of 130 grams per kilometre (g/km) for all new cars by 2012.

The commission called for targets to be imposed by law after it became clear that a voluntary agreement between carmakers to reach an average carbon-dioxide emission of 140g/km by 2008 would not be met. The latest figures available (for 2004) show average emissions of 160g/km.

In fact, Merkel pressed for 130g/km instead of 120g/km as originally proposed, with the extra 10-gram reduction to be achieved by complementary technologies such as bio-fuels, tyres with low rolling resistance, and more efficient airconditioning.

The carbon-dioxide target generated heated discussions in Geneva where every car manufacturer was keen to display its envi-ronmental credentials. John Fleming, president of Ford of Europe, summed up the mood: “We believe that climate change is real. Carbon dioxide is the largest issue facing the automotive industry today.”

But bubbling just below the surface is a difference of opinion that is driving a rift between the manufacturers. It could prevent them presenting the united front that is needed to negotiate with Brussels on the car-bon-dioxide limit and how it should be applied.

It is not yet clear if carbon-dioxide emissions will be measured on a national basis or by manufacturing group or individual manufacturer — nor what the penalties would be if the 130g/km average is not achieved.

French and Italian manufacturers, who concentrate on small cars and diesel engines, are closest to the target. Of the larger carmakers, BMW, Mercedes and Porsche are the furthest away.

In Britain, Ford-owned Jaguar and Land Rover have no prospect of meeting a 130g/km average unless their figures are included with ultra-economical Fiestas and Kas from the parent company.

Mercedes fears that, as initially presented, the EU rule would force manufacturers to make small cars that would be unsaleable.

Dieter Zetsche, the Daimler Chrysler chairman who is also head of Mercedes-Benz cars, said: “Reducing carbon dioxide is a legitimate objective and our products are part of that. We accept the challenge. Our technology is second to none. Our Smart ForTwo diesel has the lowest carbon-dioxide output of any conventional car, at 88g/km. But we must influence the market, not simply supply it with vehicles that people don’t want to buy.”

Norbert Reithofer, chairman of BMW, which has a lot of models with carbon-diox-ide figures above 200g/km, said: “The EU has to realise that there are different kinds of cars throughout Europe. One size and type does not fit all people. We don’t want to turn back the clock and all drive cars the size of Trabants.”

Reithofer calls for realistic targets for car-bon-dioxide reduction for each class of car.

BMW has just introduced a series of sophisticated fuel (and carbon dioxide) saving technologies for its 1-series and 5-series models and will extend these across its range.

Sergio Marchionne, head of Fiat, is thought to be in favour of carbon trading — exchanging credits for low emissions — between the makers of small cars (like Fiat) and the higher-polluting Germans. But Reithofer is vehemently against this.

Peugeot, which makes most of the cars sold in Europe with ultra-low carbon-dioxide emissions (below 110g/km) and has a current average of 144g/km, might be expected to be in favour of a lower limit. But, significantly, Christian Streiff, recently installed as chairman of PSA Peugeot Cit-roen, takes a wider industry view: “I think the objective of 130g/km is extremely hard and not really feasible from a technical point of view. It represents a huge burden for the motor industry — financially as well as technically — and we have to find a way of expressing this common concern.”

While BMW and Mercedes need to fight the imposition of an average carbon-dioxide figure that they cannot possibly meet with the kind of cars that their customers want to buy, the makers of smaller and more economical cars are worried about the additional costs involved.

Carl-Peter Forster, president of General Motors Europe, which includes Vauxhall, Opel and Saab, estimates that the changes needed to achieve a 130g/km average would increase car prices by €3,000-€5,000 (£2,000-£3,500) — a rise of more than 20% on its cheaper models.

Taking a global view, General Motors chairman Rick Wagoner believes that an altogether better solution would be a major switch of fuel to bio-ethanol.

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