Posted by: David Kiley on June 14, 2007
I know the debate over fuel economy, especially as it relates to the legislation currently being jawboned in Congress, is complicated. But consider a few facts that will illuminate some people and anger others because of how simply I am presenting them.
I will undoubtedly be accused of over-simplifying the debate. But here goes.
Michigan Senators Carl Levin and Debbie Stabenow are trying to get a compromise into the bill going through the U.S. Senate, which they feel is too hard on their constituents at Ford, GM and Chrysler.
Levin wants the Corporate Average Fuel Economy regulation to be 35 miles per gallon for cars and 30 miles per gallon for trucks and SUVs. That means a company’s entire fleet would have to meet that average.
Consider that Toyota today…TODAY…has a CAFÉ rating for its cars of 36 mpg. So, Levin’s proposal would require GM, Ford and Chrysler to meet Toyota’s current passenger car CAFÉ rating in 13 years. That’s not going to sound like much of a compromise to Levin’s foes.
The complaint: Toyota sells more small cars, Yaris, Corolla, Priuses as a percentage of their total car sales. So what! Isn’t Toyota phenomenally successful with that mix of cars? The company is practically minting money in the basement. Could be that if all car companies developed its product line in a parallel fashion to Toyota, that 35 mpg CAFÉ will look a lot more doable.
30 mpg for pickups and SUVs? The execs tell us they can get there, but that it will cost between $5k and $8k in added technology. And?
Most pickups and SUVs have between $3,000 and $6,000 on incentives on the hood today. It would seem to me that in 13 years you could dial down production of these vehicles to meet natural demand (the trucks and SUVs get rebated because Detroit makes too many of them)and cut out the rebates. If people still want vehicles that big, let them pay the other $3k to $5k it will take. With the quality gains being made today, I would think people could easily drive those vehicles two to three years longer than they have been to make up for the higher initial price. That would make the per year cost of driving the vehicles about what it is today. Sounds logical to me.
Okay…Im being simple. But sometimes we make the questions too hard.
Speaking of asking questions: I came across a survey from last year by Consumer Federation of America. Two thirds of 1,000 people questioned said “the well-publicized financial problems of both Ford and General Motors have resulted from their emphasis on producing and marketing SUVs and pick-up trucks with relatively low miles per gallon.” Just who, may I ask, was buying those SUVs and pickups?
Detroit builds them because people want them. They don’t build them and force buyers to take them.