NADA Chairman Voices Concerns Over CAFE Rules
Following recent hearings regarding the proposed Corporate Average Fuel Economy targets set to begin in 2017 and culminating in a mandated “54.5 mpg” by 2025, the National Automobile Dealers’ Association has expressed strong warnings against the federal efficiency standards.
The NADA’s concerns – over what would actually equate to low 40 mpg range on the window sticker – come despite the proposed CAFE rules being supported by a number of automakers as well as the United Autoworkers Union.
As the NADA has contended previously, it is reiterating that strict mpg and emissions mandates could drive up the unit cost of vehicles enough that a significant number of new car buyers will essentially be priced out of the market.
According to NADA’s incoming chairman Bill Underriner, the EPA’s projection that its CAFE goals would add at least $3,000 to the price of each new car and truck is much too low.
In January, the NADA had said it could be as high as $5,000 per car, but now Underriner has said some predict the real cost could be as much as three times this amount – as high as $12,000- $15,000 per car.
If this proves to be the case, then according to undisclosed data findings cited by Underriner, some 7.5 million Americans would no longer be able to afford a new car.
“That means 7.5 million fewer people in our showrooms,” he said. “We already know what that’s like. We’ve lived that nightmare, we don’t want to repeat it.”
Fewer buyers would therefore mean fewer profits for dealers, something Underriner expressed during the convention’s closing speech on Monday, Feb. 6.
“If government policy is going to shrink our customer base, shouldn’t we be concerned?” he said. “NADA is fighting this fight because we want the days of empty showrooms to be long gone.”
Now while it would be easy to assume that NADA isn’t in favor of increasing vehicle efficiency, Underriner was quick to point out that the association has long been an advocate of improvements in fuel economy – it’s just that NADA wants a full and fair public debate on the proposal.
In addition, Underriner said that before moving to the next step, it would be wise for both the auto industry and the government to analyze the impact of the latest fuel economy regulations, which came into effect in 2011.
Although he calls for debate, it appears clear that Underriner has already made up his mind, and it remains to be seen whether he can be convinced that CAFE won’t be a government-mandated boondoggle.
Underriner has also gone on record saying he believes that once adopted, CAFE standards will force many motorists to hang on to their older vehicles, because they won’t be able to afford newer ones.
“How many people will decide to keep their old vehicles?” he said, “and in doing so, defeat the proposal’s fundamental intent to increase fuel economy?”