NADA Urges NHTSA to Consider Market Realities for CAFE Standards


WASHINGTON - (August 4, 2008) - The National Automobile Dealers Association warned regulators today that it is the consumer who will ultimately decide the success or failure of any change in fuel economy.

A single, federal fuel economy standard which balances consumer demand, jobs, economic and environmental impact, as well as safety concerns, is critical to reducing fuel consumption and the production of greenhouse gas emissions from motor vehicles.

In a public hearing before the National Highway Traffic Safety Administration (NHTSA) which is currently seeking comment on the recently released draft Environmental Impact Statement, North Carolina dealer David Westcott warned NHTSA regulators that the current economics have already put a significant dent in the nation's auto retail economy.

July was one of the worst months for new vehicle sales in the past two decades.

Westcott outlined the market realities facing the auto industry:  the subprime lending crisis has now hit our industry; consumers have less cash; consumer debt is up; financial institutions are much tighter on credit; negative equity for consumers wanting to trade in vehicles is at an all-time high, often as much as $15,000 per vehicle; there are very few trade-ins on new vehicles; and used vehicle sales are far outnumbering new vehicle sales.”

Westcott urged NHTSA officials to keep these market realities in mind as they consider the testimony and rule making. Westcott owns dealerships selling Buick, Pontiac, GMC, Isuzu, and Suzuki in Burlington, N.C.

“To the extent that purchasers do not buy new vehicles regulated by the CAFE proposal, whether due to their higher costs or to a lack of desirability, the CAFE proposal will necessarily fail to achieve its hoped-for level of environmental performance,” Westcott urged.  “This 'jalopy effect' phenomenon recently was demonstrated by the “failed” introduction of 2007 Model Year medium and heavy-duty trucks governed by new EPA emissions mandates that increased their costs and arguably compromised their fuel economy and reliability.”

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