When people like GM Vice Chairman Bob Lutz talk about how new fuel economy regulations are going to add $5-6,000 to the price of new cars and trucks, it's worth examining how they come to those numbers. Obviously there are some cars today that can achieve the 35mpg level without being insanely expensive. Unfortunately those tend to be smaller cars that the vast majority of American new car buyers seem to be unwilling to buy at current fuel prices. For any number of reasons, Americans still prefer vehicles that are larger, heavier and thirstier, in some cases for perfectly legitimate reasons.
Unless the cost of operating those vehicles rises dramatically, it seems Americans won't want to make the switch. Of course the cost may jump anyway, although the timing of such a rise is uncertain. As is all too often the case, trying legislate a simplistic solution to a complex problem is likely to lead to unintended consequences. If customers want their bigger vehicles but carmakers are forced either produce unaffordable versions of big rides or smaller vehicles people don't want, something has to give.

In Cuba, where nearly half a century of U.S. trade embargoes have eliminated access to new American cars, people have just learned to keep the cars that existed there in the fifties on the road seemingly indefinitely. During a discussion at the Chicago Auto Show, GM NA President Troy Clarke indicated something similar could also happen here in the coming years. If car-makers are unable to provide the vehicles customers want at a price they can pay, businesses that specialize in reconditioning used vehicles could step in to fill the gap. While this would benefit consumers by providing affordable transportation, it would negate the benefits of higher fuel economy standards by keeping those more efficient vehicles from supplanting older ones in the fleet. Unless car buyers have a real financial incentive to move to smaller vehicles, they will likely just move to the used car market.


From Our Partners

You May Like
Links by Zergnet
Share This Photo X