The U.S. Senate votes today on an old problem that is new again: stagnant fuel economy. It took rising gas prices, national security concerns and global warming, but Congress may actually increase fuel economy for the first time since 1975, when they mandated automakers to double fuel economy in ten years. And, automakers did. Some Senators are worried about the fallout this time for pick-up trucks – concerned that making them run on less gas will hurt their sale-ability. But recent data shows that fall-out is already happening for precisely the opposite reason: lack of fuel economy.
Autodealer Adam Lee writes in an Automotive News op-ed, “The trucks that the Detroit 3 bet their – and my – future on are not selling.” Sales of pick-up trucks are falling, despite record discounts and incentives. The average discount on a Dodge Ram is $6,000, up $500 since January, according to the Power Information Network. These are the same customer incentives that kept the number of SUV unit sales high while SUV revenue and profits were eroding since 2001.
But pickup truck owners are a different, more loyal breed, according to automaker lore. They want their size, power and don’t care about fuel economy. Turns out the lore and lure are gone. Turns out pick-up owners are just like the rest of us. They don’t want to spend $100 filling up their tank, especially with a slumping housing market and fewer jobs to be had.
What does this mean? The industry’s favorite product is vulnerable not because Congress is about to increase fuel economy standards, but because pickup buyers have already increased their fuel economy requirements, and the industry didn’t want to believe it.