For CAFE rules, feds look at aging sales data
DETROIT -- As they prepared for rules mandating a 54.5 mpg fleet average for fuel economy, U.S. officials used long-term sales projections based on figures dating as far back as 2009.
The EPA and the Department of Transportation, in a document released last month, said that by the 2025 model year, Chrysler's U.S. sales will plunge to less than half of what they were in the 2008 model year. General Motors sales in the 2025 model year were projected to be just about what they were in 2008, while annual U.S. vehicle sales were expected to climb 25 percent to 17.3 million vehicles over the same period.
"The agencies' projections are based on the best information available to the agencies at the time," the National Highway Traffic Safety Administration, the arm of DOT that prepared the analysis, said in a statement Thursday. "Such forecasts are always subject to change as the industry and economy shifts."
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said the government's figures for each automaker don't take into account the changes in the industry over the last few years.
"When you get that far out, as a forecaster it becomes a crapshoot," Schuster said. "They don't even know what their lineup is going to be in 2025, so it's difficult for a forecaster to know."
The Wall Street financial crisis of 2008 triggered an auto industry depression that threw GM and Chrysler into government-run bankruptcies the next year.
Chrysler's 47 percent increase in November sales marked its 15th straight double-digit monthly gain; the company is up 25 percent for the year. GM has posted a 0.7 percent gain in market share this year and is on track to record its biggest annual share gain in more than three decades.
The U.S. Treasury still owns a 32 percent stake in GM; Chrysler has repaid its government loans.
The predictions were tucked away in the administration's 567-page proposal to lock in tougher fuel-economy rules for the U.S. auto industry.
The proposal seeks roughly to double today's standards by raising requirements to an average of 54.5 mpg for each automaker by the 2025 model year. The new rules received the backing of 13 automakers in July.
The sales projections for 2025 are based on forecasts obtained by the federal agencies from the Department of Energy, as well as outside forecasting firm CSM Worldwide (now a part of IHS Automotive). A custom forecast, covering the years 2017-2025, was purchased from CSM Worldwide by the agencies in December 2009.
The EPA also said in a separate statement: "The data were from DOE and CSM, a respected independent research firm. When EPA and NHTSA finalize the rule, we will update it with the more current data that becomes available."
The public will have a chance to comment on the EPA-DOT rules in January.
The government's long-range estimates help set a baseline for where sales in the industry are trending even before the more stringent standards are in place. Typically, automakers don't release such long-term forecasts publicly.
Chrysler and GM declined to comment on the projections for 2025.
Carmakers such as Ford, Volkswagen, Hyundai Honda, Toyota, Kia and Nissan were forecast to post double-digit sales increases.
Chrysler, now owned by Italian carmaker Fiat S.p.A., was the only major automaker projected to lose business during this time frame. Its sales were forecast to plummet 54 percent from 1.7 million in the 2008 model year, to 768,241 in model year 2025.
IHS'current forecast projects 1.7 million combined Fiat-Chrysler sales in the United States for the 2023 calendar year, said John Brennan, commercial lead for IHS in Northville, Mich., said.
Through November of this year, Chrysler has sold 1.23 million vehicles in the United States, including Fiat models. GM's sales were predicted to rise 3 percent to 3.2 million between model years 2008 and 2025.
Tesla, which sold 800 electric cars during the 2008 model year, was forecast to sell 31,974 cars in 2025. .
Chrysler, which historically has had a truck-heavy lineup, is starting to add small car options that will help sustain sales even if gasoline prices rise, noted LMC's Schuster.
Other automakers also will adjust their lineups in response to advances in fuel-saving technologies and shifts in consumer demand, making it tricky to forecast sales on many years in advance.