The auto industry and its customers are suffering from unprecedented market conditions. Within the past six months, the industry has been hit with three unforeseen market problems: $4 per gallon gasoline, frozen credit markets, and, now, a recession that is spurring job losses and dampening consumer confidence. These factors combined to drive down U.S. new vehicle sales by 18 percent in 2008 (compared to annual sales in 2007)—this equals nearly 2.9 million fewer cars and trucks sold in our nation in 2008.
As Congress and the Obama administration consider solutions to our economic problems and long-term challenges of enhancing energy security and fighting global warming, modernizing our nation’s automotive fleet would go a long way toward accomplishing those goals. Currently there are nearly 250 million cars and trucks on American roads and highways. Many of these are older vehicles, manufactured prior to enactment of emissions standards that help make the new vehicles sold today dramatically cleaner and better for our air quality.
In the industry, we often say that the best thing you can due to reduce emissions is to purchase a new car. Why? Because today’s vehicles are 99 percent cleaner than vehicles of the 1970s, thanks to a dramatic reduction in smog-forming emissions. In fact, in recognition of the progress automakers have made in reducing smog-forming emissions, California has gone so far as to eliminate smog checks for new vehicles.
Automakers have supported fleet modernization programs in Texas and California and have encouraged Congress and the Obama administration to adopt a fleet modernization program with the following elements:
- Make vehicles 10-years-old or older eligible for trade-in toward a new, cleaner replacement vehicle that meets today’s air-quality standards
- Establish fuel-economy incentives for the replacement vehicle—the better the fuel economy of the replacement vehicle, the more incentive you receive toward its purchase
- Establish a simple point-of-sale system that consumers can use at the dealership
During these difficult economic times, this is the type of program that could provide critical assistance to consumers, auto dealers, and automakers alike. It’s also a program that the environmental community has embraced. As Dan Becker, director of the Safe Climate Campaign at the Center for Auto Safety, recently noted, “The stimulus is about creating jobs. If the automakers are able to sell the cars they make, they will be able to put people to work. Better technology requires more people.”
A broad fleet-modernization program available to American consumers could provide numerous benefits. It would benefit consumers who need a new vehicle that gets higher mileage. It would benefit our environment by replacing older, dirtier vehicles with cleaner, more efficient models. It would contribute to energy security by reducing our petroleum usage. And most of all, it is good public policy.
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Comments
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JMG Posted 3:06 am
16 Jan 2009
I'm all for feebates sitting atop a rising baseline though: say the baseline is 28 mpg. For every mpg the overall car averages below that, $200 is added to the price. Take all the money and give it to people who buy vehicles that average better than the baseline amount, $150 per mpg. Use the difference to support mass transit for people who can't afford either one.
Each year, the baseline goes up 1 mpg.
Also, government should buy used cars with mpg below the baseline for scrap: any old car that has been licensed and driven in the last year can be sold for disassembly and recycling (disassembly lines to be located in Michigan and in other states with idle auto factories). Pay the scrap value plus $25 per 1 mpg below the baseline.
The 5% Project
Let's live on the planet as if we intend to stay.
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JMG Posted 3:11 am
16 Jan 2009
The 5% Project
Let's live on the planet as if we intend to stay.
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hapa Posted 3:56 am
16 Jan 2009
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joejoejoe Posted 3:46 am
17 Jan 2009
http://www.sciam.com/article.cfm?id=when-used-cars-are-mo ...
The auto industry should offer retrofit packages, not lobby for 'cash for clunker' packages. I'd support a subsidy for retrofit programs (more efficient gearing, weight reduction, tires aimed at efficiency more than performance). Encouraging demand for new cars beyond what already exists is horrid transportation policy. Any subsides should be 100% about improving overall transportation efficiency, not swapping old cars for new ones.
US auto makers need to get deeper into the energy business, the aftermarket business, and the light rail and tram business -- and get off the sales pitches for more and more new cars. Stop marketing cars as the solution to everything and start offering transportation and energy solutions and your industry will be fine.
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