Fiat Powered Natural Gas Cars

April 26, 2009, 1:46 am
An Alternate-Fuel Wild Card in Fiat’s Deck
By Nelson D. Schwartz

In Europe, Fiat is well-known for its mastery of diesel engines. In fact, one reason General Motors bought a 20 percent stake in Fiat’s auto division back in 2000 was to help expand the diesel offerings of its Opel unit. That partnership didn’t work out so well: G.M. paid Fiat $2 billion to extricate itself from the partnership four years later, although Opel did benefit from better diesel technology.

Now as Fiat negotiates with Washington, lenders and labor leaders on a deal to rescue Chrysler (a subject I covered in this article in Sunday’s Times), as well as acquiring Opel from G.M., another fuel that Fiat engineers have advanced could loom large: natural gas.

Fiat is the biggest player in the market for natural gas engines, which produce lower levels of greenhouse gases and other pollutants than either diesel or gasoline engines. In Italy this year the company hopes to sell 120,000 vehicles powered by natural gas, up from 68,000 in 2008.

Generous scrapping incentives from the Italian government will help — you get 3,000 euros if you trade in an old clunker for a new model powered by natural gas, double the allowance of 1,500 euros for junking a standard car. But over the long term, Fiat has a major opportunity to carve out a niche among motorists seeking power and performance while driving green, especially in markets like Germany and Britain, where Opel is strong, and possibly one day in the United States.

The challenge, of course, is fueling up. In Italy, Fiat is collaborating with fuel companies and the Italian government to provide more than a 1,000 stations where motorists can fill their tanks with natural gas. Many cars are equipped to operate on dual fuels, switching from natural gas to the diesel or gasoline tank as needed, depending on what is available.

Natural gas cars and commercial vehicles have been available in the United States for years, but the notion has never hit it big in the mass market, in large part because filling stations have been scarce by comparison. But that was then. An urge to reduce greenhouse gases — and the prospect of another spike in oil prices — could make Fiat’s engine technology very appealing to American drivers eager for an alternative to today’s hybrids.