Auto Dealers, Congress Meet for Sound Fuel Economy Hike

In July 17, new car and truck dealers from across the country discussed with Members of the House of Representatives their efforts to perform sound hike in the national Corporate Average Fuel Economy (CAFE) standard. Dealers were urging their Representatives to support a bill, H.R. 2927 -- the Hill-Terry CAFE alternative, which would increase fuel economy 30 to 40 percent over the next 15 years.

The talk highlighted that consumers will ultimately determine the success or failure of any efforts of the government to modify fuel economy standards.

NADA Chairman Dale Willey said that there is a very thin line between directing more fuel economy and meeting consumer needs. According to him, it does not mean that consumers will buy these vehicles just because Congress sets a ridiculous CAFE standard. He added that if the consumers cannot get the vehicle that meets their needs, they will keep the ones they have, and that would defeat the intention of increasing fuel economy.

As regards House action on fuel economy expected as soon as next week, House Speaker Nancy Pelosi (D-Calif.) and other lawmakers have stated publicly that they are supporting the more severe CAFE jump approved by the Senate in June, wherein a 35 mpg is minimum standard for combined car/truck. Automakers would be forced to dramatically trim down the sizes of their vehicles to those that carry less cargo, fewer people, and compromise safety. This would be the coarse just to meet the harsh Senate standard and other more radical proposals. These idealistic standards would greatly increase vehicle prices as new fuel saving technologies, such as hybrids or diesels, would add from $2,000-$5,000 to the cost of a vehicle; or simply totally eliminate certain models.

Willey said that a harder push on an arbitrary CAFE standard and an arbitrary starting date would result to a bigger risk of manufacturing vehicles that conflict with consumer demand rather than complementing or attaching consumer demand.

The Hill-Terry CAFE alternative increases current standards by Model Year 2022 form 32 to 35 mpg. Not like the Senate package, the Hill-Terry bill allows separate attribute standards for different classes of vehicles, such as cars, trucks and SUVs. These separate attribute standards protect the heterogeneity in vehicles that American consumers demand. The measure provides automakers ample lead-time to develop the technology needed in order to meet the new standards, and also balances fuel-economy hikes with vehicle diversity, safety concerns and affordability.

We will see how Honda oil pan maker, will react to the results of the talk, since Honda is one of the makers of fuel efficient cars in the market.