DETROIT – National Automobile Dealers Assn. Chairman Ed Tonkin calls unreasonable a bid by some groups to push U.S. fleet fuel-economy standards to more than 60 mpg (3.9 L/100 km) by 2025.
“It sounds real good,” Tonkin says of the target, which would fall at the high end of a range of recent proposals for 2025 from the National Highway Traffic Safety Admin. and Environmental Protection Agency.
“Some environmental groups consider 60 mpg the Holy Grail and already they are campaigning hard for it,” he tells a meeting of Automotive Press Assn. here earlier today. “But reasonable people would agree it is a stretch, would be very costly and nobody even knows if we can get there.”
The government said last month it will consider raising corporate average fuel economy standards by as much as 6% per year between 2017 and 2025, reaching an equivalent of 62 mpg (3.8 L/100 km) in the final year.
The next CAFE hike also could be as little as 3% over that timeframe, but sensing a political will in Washington after winning an historic increase last year to 35.5 mpg (6.6 L/100 km) by 2016 environmentalists have been pushing for the most aggressive track.
Tonkin says his group, which lobbies on behalf of the nation’s new-car dealers in Washington, wants higher fuel economy standards but also thinks the desires of consumers are being overlooked in the push to 62 mpg.
‘We’d all like to believe consumers would be willing to pay whatever it takes to reach such a lofty goal, but will they?,” he asks rhetorically. “Or is this another gamble in getting ahead of the consumer, pushing too far too fast?”
Tonkin believes consumers would be willing to pay more for technology enabling higher fuel economy, but only if it could be recouped in one year. The government’s research for the next round of increases shows it would take at least four years for a payback with any degree increase.
And while he admits more car buyers today shop for fuel economy, they remain more focused on convenience features, affordability of monthly payments and predictability of performance in areas such as horsepower.
Tonkin cites sales of hybrid vehicles, which continue to moderate after a spike in demand alongside record-high gas prices in 2008.
“We all hope in the future there is some technology that’s affordable and will get us 60 mpg sooner than later,” he says.
“We all hope for greater fuel economy that will reduce our dependence on foreign oil. And we all hope advanced technology will further cut greenhouse gases. But we have to look beyond hope. Public policy has to take into account the harsh realities of the marketplace.”
Additionally, more-expensive vehicles would leave Americans holding onto their current cars and truck longer, making an increase in CAFE counterproductive, he notes.
Plus, the availability of product from auto makers remains slim after the recession and bankruptcies at the formerCorp. and LLC forced production suspensions last year.
“(Product) is difficult to obtain,” says Tonkin, whose 15 franchises in Portland, OR, includes a Chevrolet dealership.Co. has struggled to keep up with demand for hot new products such as the Equinox and Traverse cross/utility vehicles, but also old standbys like the Tahoe large SUV, as well.
“With reducing shifts and, in some cases, closing plants, product availability has not been what we like,” he tells Ward’s. “(GM has) been listening, however.”
The auto maker currently runs three shifts and some overtime to support demand of the Equinox and Traverse and has suggested more plants could add a third shift to satisfy consumers. Yesterday, the company pledged more than $37 million to spur production at the Traverse’s Delta Twp. MI, assembly plant.
“GM is) trying to meet market demand and that’s a good sign,” Tonkin says. “That’s a great sign, because to the extent these companies can become market-driven, vs. being production-based, they’ll succeed.”
Tonkin says GM, in particular, has told him to market aggressively and the cars and trucks will come. “What they’re telling us is, you put together promotions and put some advertising muscle behind (it) and we’ll get you the product.”