Enforce CAFE, but first close CAFE loopholes
If we must have corporate average fuel economy standards, the National Highway Traffic Safety Administration should enforce them.
But first, it might be wise for Congress to tell NHTSA just what enforcement means. After all, Congress wrote the law.
At present, enforcement is downright weird. If a vehicle manufacturer is in danger of missing the car or light-truck mandate, it draws on credits it has built up in years in which it did meet the mark and avoids a fine. Or it borrows from expected credits for future years and again escapes the penalty. That should not be permitted. Each year should stand on its own.
Or NHTSA accepts the masterpiece of dipsy-doo perpetrated by General Motors this year. GM feared it would not make its 1998 light-truck CAFE because of strong sales by Chevrolet's and GMC's full-sized trucks. So GM ended the 1998 model run for Chevy/GMC Suburbans in January and started building and selling what it calls the '1999 Suburban' in February.
A neat idea, eh? Not really. General Motors complied with the letter of the CAFE law, but General Motors made a mockery of the spirit of the CAFE law.
In addition to eliminating those loopholes, maybe the fine for missing the CAFE target should be increased. It's now $5.50 for each one-tenth of an mpg by which a maker misses the standard, times the number of vehicles the maker produces. That can be substantial - $55 million, for example, for a maker that builds 1 million trucks and misses the truck CAFE by 1 mpg. Maybe the fine should hurt even more.
And why is the CAFE standard 27.5 mpg for cars and only 20.7 mpg for trucks? That was OK long ago when trucks were purchased as commercial vehicles. Today, they're bought as personal vehicles, and they account for 47 percent of new-vehicle sales. Why should trucks get a break of 6.8 mpg? Enforcement of CAFE is fine. Fair and logical enforcement of CAFE is even better.
In March, General Motors sold 37 percent more cars than it did in February, and the reason appears to be that tried-and-true marketing strategy: incentives. Give 'em away, and maybe people will take 'em.
The Big 3 and Toyota are powerful enough to force the market, and GM did that last month to reverse a disastrous February in which the corporation's share of car and light-truck sales plunged to a stunning 28.6 percent. It was 32.5 percent in March.
But last month's recovery was driven by the power of the incentive dollar, not by superior brand management or marketing excellence. It's a very expensive way to boost sales, and it's kind of sad.