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Analysts wary over FCA lawsuit but say emissions not as bad as VW

MILAN - Any potential fines Fiat Chrysler (FCA) may need to pay to settle a US civil lawsuit over diesel emissions will unlikely top $1 billion, analysts said, adding the case appeared less serious than at larger rival Volkswagen. The US government filed a civil lawsuit on Tuesday accusing FCA of illegally using software to bypass emission controls in 104,000 vehicles sold since 2014, which it said led to higher than allowable levels of nitrogen oxide (NOx) that are blamed for respiratory illnesses. FCA's shares dropped 16 percent in January when the U.S. Environmental Protection Agency (EPA) first raised the accusations, adding the carmaker could face a maximum fine of about $4.6 billion. The stock has been under pressure since. Volkswagen agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers. FCA, which sits on net debt of 5.1 billion euros ($5.70 billion), lacks VW's cash pile but analysts said its case looked much less severe. While VW admitted to intentionally cheating, Fiat Chrysler denies any wrongdoing. Authorities will have to prove that FCA's software constitutes a so-called "defeat device" and that it was fitted in the vehicles purposefully to bypass emission controls. Even if found guilty, the number of FCA vehicles targeted by the lawsuit is less than a fifth of those in the VW case. Applying calculations used in the German settlement, analysts estimate potential civil and criminal charges for Fiat Chrysler of around $800 million at most. Barclays has already cut its target price on the stock to take such a figure into account. Analysts also noted that FCA's vehicles are equipped with selective catalytic reduction (SCR) systems for cutting NOx emissions, so it is likely that any problem could be fixed through a software update. "Should this be the case, we estimate a total cost per vehicle of not more than around $100, i.e. around $10 million in aggregate," Evercore ISI analyst George Galliers said in a note. The estimates exclude any additional investments FCA may be asked to make in zero emissions vehicles infrastructure and awareness as was the case with VW. FCA said last week it would update the software in the vehicles in question, hoping it would alleviate the regulators' concern, but analysts said it may have been too little too late. The carmaker is also facing accusations over its diesel emissions in Europe.

Fiat/PSA's dominance in small vans hangs up EU's merger approval

BRUSSELS — EU antitrust regulators are concerned about Fiat Chrysler and Peugeot / PSA's combined high market share in small vans and may require concessions to clear their $50 billion merger, people familiar with the matter said. The companies, which are seeking to create the world's fourth biggest carmaker, were told of the European Commission's concerns last week. If Fiat and PSA fail to dispel the European Commission's doubts in the next two days and subsequently decline to offer concessions by Wednesday, the deadline for doing so, the deal would face a four-month-long investigation. The EU competition enforcer, which has set a June 17 deadline for its preliminary review, declined to comment. Fiat was not immediately available for comment while PSA had no immediate comment. Hiving off overlapping businesses, usually a regulatory demand to ensure more competition, could prove tricky for the carmakers because of the technicalities. Fiat and PSA are looking to merge to help offset slowing demand and shoulder the cost of making cleaner vehicles to meet tougher emissions regulations. The deal puts under one roof the Italian carmaker's brands such as Fiat, Jeep, Dodge, Ram, Maserati and the French company's Peugeot, Opel and DS. Related Video: Government/Legal Chrysler Dodge Fiat Jeep Maserati RAM Citroen Opel Peugeot

Here's how I averaged 31.5 mpg in a Ram HFE EcoDiesel

Few things could be more American than a bright red Ram pickup parked in front of Mount Rushmore. To get there and back on a single tank of fuel from the nearest major city, however, requires a collaboration of international proportions. This particular Ram is a 1500 HFE EcoDiesel, festooned with badges indicating the presence of an Italian turbodiesel V6 mated to a German eight-speed automatic. Some Rams are even built in Mexico, but this one only boasted a 27 percent Mexican parts content. A rather global truck, this one. It is the sum of its parts, but those bits and pieces were curated by a team of engineers in Michigan. At the risk of hipstering its history, the Ram HFE (High Fuel Efficiency) package was truly custom-tailored for one purpose: Achieving an EPA-rated 29 mpg on the highway, which is 1 mpg better than a standard Ram 1500 EcoDiesel. It did just that. No, it did better than that, but more on that in a minute. The Ram has stuck with its "son of big rig" styling for nearly 25 years; opting for the EcoDiesel V6 means you can fill up next to Peterbilts. My goal was to bypass truck stops entirely. I left Denver early in the morning and aimed to enjoy lunch with Washington, Jefferson, Roosevelt, and Lincoln looking over my shoulder before heading home for dinner. Mt. Rushmore is about 370 miles away from the northernmost truck stop within Denver, where I filled the Ram HFE's tank and headed northbound on Interstate 25 toward Wyoming and a series of smaller highways that roughly follow an old stagecoach route from Cheyenne to what is now Mt. Rushmore in South Dakota. The Ram was such a fuel miser that I could have driven an extra 50 miles each way and still avoided the pumps. It's beautifully stark country: the kind of desolate place where the FM radio does a lot of seeking; that's all the audio I had on board because the Ram HFE is decidedly lacking in comfort and convenience features. To get to an EPA-estimated 29 mpg highway figure, Ram engineers had to goals: To strip weight and improve aerodynamics. In the wind tunnel, the medium-size 4x2 Quad Cab with 20-inch wheels and the Ram Express trim level's one-piece front bumper proved the most aerodynamic configuration of the many flavors of Ram available. Interestingly, testing revealed that adding full-length tubular side steps and a tri-fold tonneau cover normally offered in the Mopar accessories catalog aid aerodynamics.