Midway Group of Nebraska

Camaro sales rose 4 percent through May this year in the United States.

DETROIT (Bloomberg) -- Ford Motor's Mustang is falling farther behind the Chevrolet Camaro as the top-selling U.S. sports car, jeopardizing a Michigan factory as designers work to win back the hearts of pony car fans.

Ford narrowly lost the crown in 2010 after a 24-year run, and the gap widened this year, with General Motors Co.'s revived Camaro outselling Mustang by 33 percent through May.

The 1,700- person plant in Flat Rock, Mich., has just one shift of workers, and its Japanese partner decided last week to pull out.

"The Mustang on its current sales pace isn't enough to sustain Flat Rock," said Jeff Schuster, an automotive analyst with researcher J.D. Power & Associates. "The Camaro has a more modern feel and seems to draw more attention from a younger age group."

The second-largest U.S. automaker is working to increase production of V-6 engines while its designers prepare for a new version in 2014 to restore its cachet. GM started selling a convertible version of the Camaro this year and says the Mustang is one of the top trade-ins for the Chevy sports car.

"They have a huge, loyal base with the Mustang," John Fitzpatrick, the Camaro's marketing manager, said in an interview. "We are starting to chip away at that."

Adding to Mustang's misery, Mazda Motor Corp. said last week that it plans to pull its Mazda6 model out of the Michigan assembly plant where Ford also makes the sports car. Ford, which owns half of the factory, said it is working with Mazda and the UAW to explore options for the "critical" site.

Manufacturing 'options'

Not sharing the assembly line with Mazda will allow Ford to build more Mustang variations, said Steve Ling, the car's marketing manager.

"The flexibility that that provides is a good thing," Ling said in a June 14 interview, declining to give specifics on how Mustang production might change after Mazda leaves. "It's good to have options and that's what that scenario provides."

Even if Mustang manages to overtake Camaro, Ford will never sell enough of its muscle car to fill up Flat Rock, Schuster said. The factory has the capacity to build 240,000 vehicles a year, Mazda has said. Last year, Ford sold 73,716 Mustangs.

"Even with a boost from a redesign, because of what Camaro has achieved, you're still looking at sales volume for the Mustang below 100,000 a year," Schuster said. "The bottom line is something at Flat Rock will have to change."

Ford is to introduce a redesigned Mustang in 2014, said Brian Johnson, an analyst with Barclays Capital in Chicago.

Popular V-6

This year, Mustang sales have suffered because of a short supply of a new V-6 engine that gets 31 miles per gallon on the highway while generating 305 horsepower, Ling said. The Mustang shares that engine with the F-150 pickup, the centerpiece of Ford's top-selling truck line.

As rising fuel prices have driven up demand for the V-6 engine, Ling said Ford has chosen to apportion more supply to the F-150, among its most profitable models. The V-6 Mustang starts at a list price of $22,310, according to Ford.com.

"The V-6 powertrain that's shared with all of our hot products is really very popular right now," Jim Farley, Ford's global marketing chief, said in a June 9 interview. "We have a lower days' supply on Mustang, but we think that's the right way to run that business."

The V-6 engine shortage has left Ford with less than 30 days' supply of Mustangs, half the inventory it had a year ago, Ling said. Ford is now looking for ways to boost production of the V-6, which accounts for 51 percent of Mustang sales, up from 40 percent a year ago, Ling said.

"We're making sure that the truck has enough engines and obviously there is an impact to Mustang," Ling said. "The dealers feel we could sell more" if Ford had more V-6 engines.

Camaro rolling

GM is stepping up the pressure by updating the Camaro next month with a more powerful V-6 engine that gets 30 mpg on the highway, Fitzpatrick said. It also is updating the car's interior with new features like a smaller steering wheel, he said.

Rising gasoline prices and a stalling U.S. economy can't seem to slow down the Camaro, which went on sale in April 2009 after a seven-year hiatus. Camaro sales are up 4 percent this year, while Mustang is down 3 percent, according to researcher Autodata Corp.

"The Camaro is highly unusual in a segment that tends to be very fickle," said Jeremy Anwyl, chief executive officer of auto researcher Edmunds.com. "Normally a sports car that's really hot fades fast."

Maintaining interest

To keep interest stoked, GM will advertise around the movie sequel "Transformers: Dark of the Moon," debuting June 29 and again featuring a yellow-and-black Camaro as a crime-fighting robot, Ling said. The Camaro known as "Bumblebee" has been the ride of actor Shia LaBeouf in all three Transformer movies.

"The linkage to Transformers has really helped create and build the brand Camaro," Schuster said, "especially with young people."

Early next year, GM plans to roll out a ZL1 Camaro with a 550-horsepower engine, matching Ford's Shelby GT500 version of the Mustang that starts at $48,810, according to Edmunds.

"It looks like they clearly targeted the GT500," Ling said. Much is riding on Ford's 2014 redesign of the Mustang, which Ling declined to describe. By then, Camaro will be five years old and more than a year away from its own restyling in late 2015, Schuster said.

GM Ventures is part of a group led by venture capital firm Kleiner Perkins Caufield & Byers that will invest a total of $30 million in Proterra. Golden, Colo.-based Proterra, which was founded in 2004, makes zero-emission, electric buses at a temporary plant in Greenville, S.C., GM said.

When fully loaded with 68 passengers, the vehicle achieves the equivalent of about 24 miles per gallon -- 600 percent better than the typical diesel bus, GM said. It has a 40-mile range and can recharge in about 10 minutes using the company's fast-charging technology.

"This equity investment further demonstrates GM's commitment to electric propulsion," Jon Lauckner, president of GM Ventures, said in a statement.

GM has garnered attention with its plug-in hybrid Chevrolet Volt car. The U.S. automaker's push into electric vehicles is partly aimed at seizing the green mantle.

The investment marks the seventh by GM's venture capital arm, which was established last June with $100 million in funding. The investments have ranged in size from $3 million to $7 million.

One of GM Ventures' areas for investment focus is in technologies involving the greening and electrification of vehicles. Other areas include in-car information-entertainment technologies, sensors or processors, and "smart" or advanced materials that can improve vehicle performance or cut costs.

GM Ventures is headed by Lauckner, a veteran GM engineer, and overseen by GM Vice Chairman Steve Girsky, a former investment banker in charge of strategy at the automaker.

Three of Proterra's buses are in a test fleet near Pomona, Calif., with more to be added, GM said. New buses and charging stations are also headed to San Antonio, Texas, and Tallahassee, Fla., later this year.

The investment by GM and others allows Proterra to complete federal validation testing of its bus, roll out additional pilot fleets and reduce costs at the manufacturing plant, where it will have capacity to build 400 buses a year, GM said.

The Chevrolet Volt earned a top 5-star rating from the National Highway Traffic Adminstration and a Top Safety Pick Ward from the Insurance Insitute for Highway Safety.

NEW YORK (CNNMoney) -- The Chevrolet Volt earned a top five-star rating in thee federal government's new, tougher crash test rating system.

Under the National Highway Traffic Safety Administration's new rating system, all vehicles are given a single rating of one to five stars encompassing front and side impact safety as well as resistance to rollovers.

The Volt earned four stars for occupant protection in front-end crashes, five stars for side crash protection and five stars for resistance to rolling over.

The Volt is an electrically powered plug-in car. It can go about 35 miles on a charge, according to EPA estimates, before needing to turn on its gasoline engine to generate power.

General Motors recently announced it would temporarily shut down the Detroit factory that produces the Volt as it prepares the facility to produce larger numbers of cars.

NHTSA used updated crash test regimen, introduced last year, which includes a new side crash test in which vehicles slide diagonally into a pole, mimicking a car skidding into a light post or tree.

WASHINGTON (Reuters) - The White House has signed off on a new gasoline pump label that would warn consumers when they are about to fill their vehicles with a fuel blended with a higher rate of ethanol.

The Environmental Protection Agency approved raising the ethanol levels in gasoline to 15 percent from 10 percent for newer cars and trucks in January, a move welcomed by the ethanol industry and by farmers who supply the corn to make the fuel.

The new label means the so-called E15 gasoline could be available nationwide by the end of September, according to Growth Energy, the pro-ethanol trade group.

The EPA still has to officially register E15 before it can be sold.

It is unclear how fast E15 gasoline will be adopted by service station owners.

Many station operators have to invest in new pumps and separate storage tanks.

Most stations will continue to sell E10 gasoline, which can be used in all makes of vehicles.

The National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America, whose members sell about 80 percent of the gasoline in the U.S., sent a joint letter to EPA two weeks ago opposing the new label.

The groups said retailers selling E15 could be held liable for damages if consumers inadvertently put the fuel in the wrong engines.

E15 is approved for vehicles built since 2001, a fleet of 150 million cars and trucks that consumes 74 percent of U.S. gasoline production.

The muscle cars that fueled automotive passion in the 1960s were wildly popular because high performance is both fun and addicting. What if a car company could capture those same emotions and sensations in a package that makes no excuses for its environmental impact ... a vehicle that doesn't sacrifice performance for green credentials that literally screams, "drive me?" Meet Chrysler's latest concept vehicle, the Dodge ZEO.

ZEO stands for Zero Emissions Operation. Where premium gasoline once flowed, electrons now deliver ample power. That's right, ZEO is a pure electric car, or more accurately an electric performance car. ZEO delivers clean electric performance on par with the venerable Chrysler HEMI V-8. Acceleration is well within the realm of a true muscle car: 0-60 mph from a standing start happens in less than six seconds.

This is possible because the ZEO is propelled by a 200 kilowatt electric motor that supplies 268 horsepower to the rear wheels. The advanced propulsion system is fed by a 64 kilowatt-hour lithium-ion battery pack that Chrysler says will offer a range in excess of 250 miles. The batteries are located very low in the chassis and below the cabin floor for a low center of gravity. Although the battery pack is large, ZEO manages to weigh in at just 2,650 pounds, thus enhancing overall performance and handling.

"The Dodge ZEO concept is designed to break the paradigm of what an electric car should look like," says Bill Zheng, Dodge ZEO principal exterior designer. "An electric car can be as expressive as any gasoline powered vehicle. The Dodge ZEO concept proves that point ... and then some."

Dodge is calling the ZEO a 2+2 sport wagon. The key word here is "sport" because very little about ZEO evokes the image of a traditional station wagon. Yes, the cabin extends back to the rear bumper with cargo space behind two rear buckets, but there is certainly nothing stodgy about this wagon. Its stance is pure muscle car, with huge 23 inch alloy wheels filling the exaggerated wheel arches and wide, rounded fender lines. ZEO is a very "fast" shape. The windshield, for example, arches up at an extreme rake from the long and expressive hood, extending all the way back over the passenger compartment to the "C" pillar. The cabin tucks inward from the widest portion at the front door line to form a sculpted teardrop form at the ZEO's tail.

Fortunately, while the ZEO is very expressive, it hasn't lost the Dodge brand character. Cues like the Dodge ram head badges and crosshair grille treatment, which is illuminated from behind, make it easily recognizable as a Mopar. Both front and rear lamps are treated as separate sculptural forms that add ,to the futuristic look of the car.

Zheng and his team took an unconventional approach with the door configuration. Rather than hinging from the front or rear, the ZEO's doors swing up out of the way in a "scissor" fashion to provide unobstructed access to the interior. Once these scissor doors are open, the interior quickly becomes the center of attention. Lou Gasevski, principal interior designer of the Dodge ZEO concept, describes the interior as "an example of designing for people who are used to a dynamic lifestyle and who are surrounded with information and virtual friends at all times." Interior lines are bold, yet minimal. Trimmed in Super White leather with dark gray accents, the ZEO's interior hints at a European flair. The designers were after an integrated look and treated the interior as a single piece of sculpture, accomplished by blending individual components into a unified whole.

To create the character of a true 2+2, a dramatic center console slopes downward at an angle that extends all the way past the rear bucket seats. The ZEO's steering wheel, column, and instrument panel are a single freestanding design element that adjusts as one unit. The wheel is open, with two closely spaced spokes allowing 80 percent of the rim uncluttered. A thin blue acrylic viewing screen, which is positioned directly in the driver's line of sight through the open steering wheel, supplies critical driving information.

Clearly, Chrysler designer's had the Sixties muscle car playbook in mind when they concocted the ZEO. A lightweight platform with an oversized motor driving the rear wheels is a sure recipe for fun. Only this time around, it's good clean fun.

Spokespeople for Fox and GM declined to comment.

The sponsorship will likely weave a GM vehicle into epsiodes of "X Factor," but will not last the entire season, like the deals that Coca-Cola, Ford and AT&T have with Fox's other big program, "American Idol." Last January, Pepsi said it would be exclusive season-long sponsor of the program, which Fox executives are hoping will match ratings juggernaut "Idol" in terms of viewer interest.

With TV networks in the midst of selling their fall ad inventory, part of the process known as the "upfront," the new Fox show is getting major interest from marketers. While it's often true that more than three-quarters of new TV programs fail, "X Factor" is already a success overseas and is going after the broader family audience that tunes in to "American Idol." As such, some marketers are treating "X Factor" as if it's a sure thing.

GM has been aggressive on the TV-advertising front in the past year, weaving various Chevrolet vehicles into CBS's "Hawaii Five-0" and enjoying rather obvious integration into the scenes and plots of "Men of a Certain Age" on Time Warner's TNT. The "X Factor" sponsorship will likely focus on one of the company's auto brands, and will not burnish the larger corporation, according to a person familiar with the matter.

The number of "X Factor" episodes in which GM will be involved could not be determined. One person familiar with the matter suggested the car company's plans for the show had not been finalized.