NADA's Underriner: 54.5 mpg fuel-economy proposal threatens sales
 | Underinner: "NADA is fighting this fight because we want the days of empty showrooms to be long gone." |
Reprints
Print
Respond
LAS VEGAS -- The proposal to increase federal fuel economy standards to 54.5 mpg by 2025 threatens to price millions of consumers out of the market, the incoming chairman of the National Automobile Dealers Association said Monday.
NADA is pushing back with tough questions about the proposal, said 2012 Chairman Bill Underriner in his address to dealers during Monday's closing session.
If fewer customers can afford new cars, it will hurt sales and dealership profits and defeat the objective of improving fuel efficiency, Underriner, a Billings, Mont., dealer with Buick, Honda, Hyundai and Volvo franchises, said.
"If government policy is going to shrink our customer base, shouldn't we be concerned?" he said. "NADA is concerned. NADA is fighting this fight because we want the days of empty showrooms to be long gone."
Supports fuel economy
That fight is not to defeat the fundamental idea of improving fuel efficiency. Underriner stressed that NADA has long supported fuel economy gains.
But NADA wants a full and fair public debate on the 54.5 mpg proposal, he said. And the industry and the government should see how the market responds to the new fuel economy regulations that went into effect just last year before moving on to the next phase.
So far the government hasn't adequately answered questions and concerns about the proposal, Underriner said.
He cited an Environmental Protection Agency estimate that the proposed requirement would add $3,000 to the cost of a new vehicle. NADA, in separate testimony before U.S. regulators, estimates the proposals could add $5,000 to the cost of a typical new car or light truck.
"How many people does that knock out of the market?" Underriner said. "How many people will be forced to buy lesser vehicles that might not meet their needs? How many people will decide to keep their old vehicles? And in doing so, defeat the policy's fundamental intent to increase fuel economy?"
Priced out of the market
Actual costs could be even higher, he said. New economic data show if the average price of a car increases from $12,000 to $15,000, for example, as many as 7.5 million Americans will be priced out of the market, Underriner said, citing NADA analysis.
"That means 7.5 million fewer customers in our showrooms," Underriner said. "We already know what that's like. We've lived that nightmare. We don't want to repeat it."
You can reach Amy Wilson at awilson@crain.com.
