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 2012 chairman of the National Automobile Dealers Association said.
NADA is pushing back with tough questions about the proposal, Chairman Bill Underriner said in his address to dealers during the closing session of the convention.
If fewer customers can afford new cars, it will hurt sales and dealership profits and defeat the objective of improving fuel efficiency, said Underriner, a Billings, Mont., dealer with Buick, Honda, Hyundai and Volvo franchises.
"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."
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 EPA 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?"