Cigar Aficionado

Streams of sunlight pierce the forest canopy as we whip through California redwood country. Our lake blue Bentley Continental GTC convertible slips back and forth between shadow and light, the cool, yet fragrant air blasting in through the car's open top. The big V-12 purrs as we cruise, then roars menacingly as we slam the throttle to the floor.

A day's worth of hard driving has drained the tank. So, as we approach Mendocino, a warning light begins flashing ominously on the hand-tooled wood instrument panel. With the tank perilously close to empty, we ease off the gas and start looking for a service station. You might assume that, for a man sitting behind the wheel of a $180,000 automobile, money is no object, but as we pull up to the pump, my copilot can't help but let out an audible gasp. At $3.69 a gallon for premium, a fill-up will cost more than the bottle of Napa Valley Cabernet we were looking forward to splitting over dinner.

"Even the wealthy are feeling the pinch as oil prices soar to record levels," suggests Dan Gorrell, who until recently was the lead analyst for the California consulting firm Strategic Vision. And even those not stinging from the cost of filling up may bridle at contributing to global warming or our dependency on Mideast oil imports. More and more motorists, at every level of the socioeconomic spectrum, are becoming concerned about the issue of mileage. Fuel economy has become a critical factor for those buying a new car, according to industry data, whether they're in the market for a stripped-down Hyundai or a fully loaded Rolls-Royce Phantom.

The good news is that the industry is responding. Indeed, some of the most significant strides are being made in the luxury segment of the market, where buyers are generally more willing to absorb the cost of technology that can improve mileage and reduce harmful emissions. What's even more exciting is that these solutions often avoid the sacrifice normally associated with fuel efficiency.

BY THE NUMBERS
The all-new Lexus LS 460 sedan is a good example. Its new 4.6-liter V-8 puts out an impressive 380 horsepower, a whopping 100 hp more than the old LS 430. Yet the 2007 remake of the Lexus' flagship gains an additional mile a gallon in city driving and two more on the highway, according to the EPA sticker. Much of the credit should go to a trick dual-injection system. This unique approach, with both direct and port fuel injection, boosts fuel economy and performance simultaneously.

The '07 LS also boasts the world's first eight-speed automatic transmission. Six speeds are becoming the industry norm, and Mercedes-Benz recently launched a seven-speed in its redesigned flagship, the S-Class (see Good Life Guide, page 52). In the automotive world, bigger always seems to be equated with better. But do more gears really make a difference? Depends on what you do with them—and that's where microelectronics come in. If you're not careful, a transmission can spend a lot of time switching—hunting, in industry terms—between gears, especially if you're going up and down hilly terrain. Lexus, like Mercedes, has used some smart programming to anticipate what gear is best, whether you're cruising smoothly or driving balls-to-the-wall. Our own experience was that you're not likely to notice when the new LS 460 or the S550 shifts.

A number of Mercedes models—along with those from competitors such as General Motors—now feature a slick fuel-saving system that has been dubbed displacement-on-demand, or D.O.D. Your average V-8 engine has far more muscle than you actually need on the highway, unless you're pushing the limits on the autobahn. So why waste horsepower, or fuel? When power demands are low, D.O.D. shuts off one bank of cylinders in the engine of the new Cadillac Escalade SUV. Tip in on the throttle, though, and you're instantly drawing full power.

Jaguar takes a very different approach to blending performance and mileage with the XK, a sleek sports car that has an all-aluminum chassis and body. On paper, the base XK8 might seem to lag the competition, its 4.2-liter V-8 putting out only 300 horsepower in a segment where others are nudging close to 400 hp. But spend just a few minutes behind the wheel and you'll be convinced. The XK is a real contender. Lightweight aluminum means less mass to haul, so the V-8 doesn't have to work quite so hard. That translates into surprisingly good fuel economy: 18 mpg city and 27 highway.

The use of alternative materials, including aluminum, magnesium and even carbon fiber composites, is becoming increasingly common. Like the XK8, the Jaguar XJ has an aluminum chassis and body, as do several top-of-the-line Audi models, such as the A8 sedan. Expect to see these materials become even more common in the coming decade.

GEEK-MOBILES?
Drive anywhere in California these days, and you're likely to spot plenty of Priuses. Toyota's oddly shaped sedan has become the vehicle of choice for the green crowd, thanks to its gasoline-electric power train. By the mid-2007 model year, at least a dozen hybrid-electric, or HEV, models will be on the road. While some, such as the Honda Civic, are geared for the cost-conscious motorist, a growing number of hybrids are targeted toward the luxury market.

Toyota's luxury sibling, Lexus, will soon have three HEVs in its lineup. The first is the RX 400h, a gasoline-electric version of the RX crossover/SUV. One of the most popular products in the emerging segment, the RX 400h is stylish, roomy and sophisticated. Like many HEVs, it does have some drawbacks. The RX's hybrid transmission, for example, feels like a stretched rubber band under hard acceleration, a sensation some motorists find awkward. But the overall driving experience is sporty, fun and reasonably nimble for a vehicle of this size.

Though the RX 400h carries a premium—it costs almost $9,000 more than the gasoline-only RX 330 —the hybrid also comes with a variety of additional equipment. According to the EPA, you'll get 31 mpg in the city and 27 mpg on the highway with the HEV. (That's not a typo, by the way. Hybrids do better in stop-and-go driving, where they constantly recharge their batteries.) The RX 400h claims mileage of 18/24, so with gas in the $2.50 to $3 range, that might seem quite appealing, but as with all hybrids, mileage varies widely, and is usually best when the crossover is driven gingerly in urban or dense suburban traffic. Our own usage of the RX 400h suggests real-world fuel economy averaging around 26 mpg, a rate that would make it difficult to recover the hybrid premium, unless you plan to keep your HEV for an extended ownership cycle.

Lexus rethought the hybrid concept when it developed the GS 450h. The Japanese marque's second gas-electric offering puts less emphasis on mileage and more on performance. Acceleration is absolutely exhilarating, as we noted in a previous review in Cigar Aficionado, with 0-60 times of 5.2 seconds, besting a Porsche 911 with Tiptronic transmission off the line. And the modified transmission on the GS 450h doesn't suffer from that annoying rubber band effect. Like the RX 400h, the GS 450h hybrid is loaded to the gills with virtually every feature possible; among the few options are run flat tires and the amazing Mark Levinson audio system. Unfortunately, mileage is little better than the V-8-powered GS 430. But then again, to get this sort of performance, you'd either need a much bigger engine or a big turbocharger, and either option guzzles gas.

Toyota's high-line division is getting ready to roll out its third hybrid model, and the LS 600h is meant to be the ultimate statement for Lexus. Well, at least for now. The sedan starts with a 5.0-liter V-8 mated to an all-wheel-drive version of the Lexus Hybrid Drive system. A new, larger battery pack will store more energy than prior Lexus models, which should improve both performance and mileage. Boasting more than 430 horsepower from its dual power train, the LS 600h "will deliver power and performance on par with a V-12, while also delivering fuel economy on a par with the best V-8s," claims Bob Carter, vice president and general manager of Lexus. Precise specifications have yet to become final. Look for 0-60 times near five seconds flat.

Also expect a cornucopia of gadgets for the geek-minded, such as the Advanced Pre-Collision System, which uses a mix of radar sensors and two forward-facing cameras to detect an imminent collision. A third camera mounted on the steering wheel watches to see if the driver is aware of the situation. Pre-Collision can, among other things, sound a warning, automatically apply the brakes and adjust steering settings to make it easier to avoid a collision. The LS 600h will also offer a system that can automatically park the sedan, with minimal driver intervention. Sales are expected to launch by early spring.

While Lexus has a monopoly on the luxury HEV market, it's not likely to last. Porsche has plans to produce a hybrid version of its Cayenne sport-utility vehicle. Don't be surprised to see Ford Motor Co. pack a hybrid power train into its Lincoln lineup. And offerings from GM, DaimlerChrysler and BMW should hit the market within the next couple of years. Those three manufacturers are partnering in the development of a so-called two-mode hybrid system, with which they hope to leapfrog Toyota/Lexus. Among other claimed advantages, the collaborators maintain that the system will boost highway mileage, as well as city-cycle fuel efficiency.

DIESEL REDUX
What do European drivers know that we don't? The diesel, for one thing. Well over half of the new cars sold in Western Europe, use this super-high-mileage technology, which is the only viable alternative to the hybrid. And if you believe the econo-car segment accounts for most of that, think again. Diesel sales are actually strongest in what might be called the mainstream luxury segment, from the BMW 3 Series to the Mercedes S-Class.

Back in the early to mid-1980s, you had to look hard to find a gasoline-powered Mercedes in the United States. In the wake of the second oil crisis, diesel technology took off, despite a series of annoying problems. Diesels of that era were noisy, smelly, slow, and rode rough. They also had problems starting in cold weather. Worse were the embarrassing quality problems, especially at General Motors, where Oldsmobile diesels had a propensity to fail catastrophically.

Modern diesels are an entirely different breed. Direct-injection technology and other advancements make them clean, quick and a lot of fun to drive. They often exceed the mileage of comparable hybrids. And they have regained a long-standing reputation for reliability.

But diesel use in this country has some hurdles. New rules in the United States require refiners to switch to low-sulfur diesel fuel. That not only eliminates the source of that obnoxious diesel smell, but also permits the use of the latest engine-emission-control systems. At the same time, new clean air regulations severely reduce the tolerable levels of two key diesel pollutants: smog-forming oxides of nitrogen, and soot-like particulates, which some studies have linked to lung cancer.

"It's going to take time" to find a way to meet the new rules, asserts General Motors' car czar, Bob Lutz, and by some estimates, the added emissions hardware could bump up the price tag of the typical diesel by as much as $5,000. In practice, however, manufacturers, despite their complaints, find surprising ways of figuring things out, and equally amazing ways of bringing costs down.

Lamentably, diesels have been scarce on the U.S. market in recent years. With the exception of some large domestic trucks, oil burners have largely been limited to a handful of European imports, such as Mercedes and Volkswagen. With the advent of the next-generation emissions standards, manufacturers are actually cutting back on their diesel offerings. But only temporarily.

No automaker has made more diesel products available in the States than Volkswagen. It's pulling several of these models for 2007, but will continue offering a V-10 TDI version of its upmarket Touareg SUV. Look for that stump-pulling turbodiesel to be replaced by a next-generation V-6 TDI in mid-'07.

Jeep has abandoned its Liberty Diesel, but that's little loss. The engine was outdated. The new-for-'07 Grand Cherokee Diesel borrows a Mercedes power train that's about as clean, quick and smooth as anything you can find, here or abroad. Mercedes itself is making a mid-model-year transition with its E320 CDI. This fuel-efficient sedan will get a heart transplant as Mercedes migrates to its new BlueTec diesel technology. The automaker expects to be able to meet the most stringent diesel rules, which are still to come. But getting to that level will require the use of a special urea additive, which has not yet been approved by federal regulators. So stay tuned on Mercedes and its sibling divisions on the Chrysler side.

Other automakers, ranging from Honda to Audi, are also talking up the diesel of late, and, if the market responds, it's a fair bet that they will weigh in with offerings of their own. The market research gurus at J.D. Power and Associates estimate that, by the middle of the next decade, diesels could account for as much as 10 percent of the American market—perhaps more, if gasoline prices resume their upward march.

SMALLER IS SWEETER?
Once U.S. fuel prices tipped $3 a gallon, a surprising shift took place in the American market. For the first time in two decades, motorists began rethinking their love of large SUVs and pickups. While prices had slipped as we went to press and could dip closer to the $2 mark by year's end, auto industry analysts believe we have seen the proverbial paradigm shift, and that there's likely to be no going back. The shift has been a bit less significant in the luxury market. Full-size luxury vehicles, like the Cadillac Escalade, have remained in strong demand, often because of their large cargo and towing capacity.

Nonetheless, a subtle shift to smaller products has become increasingly apparent. It's not an easy sell. American motorists tend to associate size with price. But vehicles like the Audi A3 and the Mini Cooper show that a manufacturer can command a premium for a downsized automobile with big-car attributes. Mercedes will try to crack the code when it finally begins the long awaited launch of its pint-size Smart car, in 2008.

Don't expect to see an end to the luxury horsepower race. The market for 500-plus-horsepower Ferraris and 1001-hp Bugatti Veyrons will likely remain. There will almost certainly be buyers for big SUVs, such as the Lincoln Navigator. But whether motivated by fuel prices, politics or social stigma, even the most affluent American drivers are rethinking their motoring habits and looking for vehicles that are cleaner and more fuel-efficient. Luckily, a range of tantalizing offerings exists to meet that growing push.

Paul A. Eisenstein, a Cigar Aficionado contributing editor, also publishes the Internet magazine www.TheCarConnection.com