The head of General Motors Canada Ltd. has suggested the company might not continue producing and selling some popular vehicles in Canada under the federal government's long-term plan to improve car fuel economy, the Calgary Herald reported.

According to the newspaper, GM Canada president Michael Grimaldi said there was "a lot of risk" in the government's proposals for fuel economy because of uncertainty about technological capabilities and whether the market will accept the changes and potential price increases.

"The question becomes: Do you have to compromise the functionality and performance of some of the products we offer?" Grimaldi told the Calgary Herald. "And if you compromise the functionality, is the product competitive in the market or is it better not to offer it?" he added.

According to the newspaper, Grimaldi said "the vehicle in question becomes the larger vehicle, which serves a commercial purpose as well as personal use."

The Calgary Herald said Canada’s federal government has proposed a 25% improvement in fuel economy for new cars and trucks by 2010 in efforts to meet provisions of the Kyoto climate change accord.

According to the newspaper, Grimaldi said the industry has told the government that it can't reach the fuel target.

"It's an admirable goal but at this point . . . with the product portfolio, the technology, the cost and price issues, we don't see a way to get there," he reportedly said.

The Calgary Herald said Grimaldi added that GM Canada also faces a "harmonisation" problem because it exports about 90% of its output to the United States, where fuel economy requirements will be different.