Toyota's U.S. Chief Unfazed by Fuel-Economy Mandate Buzz

Competition will mitigate pricing pressures generated by increasingly strict fuel-economy standards, says Toyota Motor Sales U.S.A. Inc's president and COO.

Jim Lentz makes the calming statement following his upbeat address at the dealer covention's opening session.

“Regulation will drive up the price of cars,” he tells journatlists. “As we push to the 35.5 mpg (6.7 L/100 km) by 2016 and then whatever it's going to be up until 2025, that's going to drive cost up (and) it will drive price up.”

But the story does not end there. “You've got to remember, we are still an extremely competitive industry,” Lentz says. “There's still going to be tremendous competition and different availability of products for customers.”

He is skeptical of claims the federal government will recommend a bogey of 62 mpg (3.8 L/100 km) in the coming years, a notion put forward by government analysts in October following the release of a federal study.

The study says a fleet-wide average of 62-mpg is attainable. Lentz expects the next benchmark will not be set until the government consults with industry stakeholders.

“Everyone would love to have higher mileage,” Lentz says. “If we could do it today, we'd do it today. But we've got to understand how feasible it is and what the cost is going to be to the consumer.”

Meanwhile, Jeff Schuster, executive director-global forecasting J.D. Power and Associates tells dealers electric vehicles, plug-in hybrid electric vehicles and hybrid-electric vehicles will account for 5 million units of volume in the U.S. by 2020. But that tally will represent only about 5% of the total market,