Thursday, May 21, 2009
The new fuel-efficiency and emission standards may lead to smaller cars with lighter engines. This is not what consumers prefer, auto analysts tell us.
They may be right that Americans want big, cheap cars. They also want free gasoline, clean air and complementary cocktails in coach.
Meanwhile, they don't want to send their money to petro-financed terrorists.
And they don't want to bail out U.S. carmakers going bankrupt in part because, when oil prices soared, Americans stopped buying big vehicles, as much as they might have preferred them.
The moral here is we can't always have what we want. Life is a series of trade-offs. Had the previous administration gone to bat for tighter fuel-efficiency standards, U.S. automakers would not have been caught flat-footed when gas prices spiked a couple of years ago. They'd be in better shape today.
Furthermore, Detroit would not have had to deal with the chaos and confusion of conflicting federal and California-inspired goals for fuel economy. It also would have avoided angering many consumers by fighting California's more stringent rules (really, the only serious ones for a while) at every pass. Another moral here: Well-written regulations help business by providing the predictability it needs for planning.
In the service of full disclosure, the Obama administration announced that the new standards would tack another $600 to the price of the average car. That's in addition to the $700 in new costs related to milder fuel-economy rules passed in 2007.
To ease the blow, the president said that savings at the pump would offset the average driver's higher vehicle purchase price in three years. Said motorist would save about $2,800 in fuel costs over the life of the vehicle.
That's a very squishy prediction, of course. What is average in this vast and diverse land? The savings will depend on the price of gas, the vehicle, number and type of miles driven (city, mountain, open prairie?) and the motorist's driving style.
Nice to have a number, anyway.
Not long ago, Washington had rigged the fuel-efficiency rules to let SUVs avoid the standards imposed on passenger cars. Those days are gone.
Both cars and light trucks must meet more stringent targets by 2016. (Some of today's cars are almost there.)
There will also be a score covering an automaker's entire fleet, which gives manufacturers wiggle room for selling larger vehicles. An electric car's superior mileage can offset an SUV.
The oddest aspect of Detroit's long fight against fuel-efficiency standards was this reality: The auto industry sells cars, not oil. Sure, cheaply built SUVs were a cash cow in their day, but the bottom line never had to rest on what powered the engine. Whether gasoline or salad oil, automakers can produce a car that runs on it.
Detroit's apparent embrace of new fuel-economy standards leads to greater hope for its resurgence. For starters, it could end the war with environmentally conscious consumers and rekindle the old love affair with cars.
When Americans have money again, they'll focus on the automotive pleasures. For car devotees, it's not about how many miles you drive. I know people who take trains or buses to work but own three vehicles. They have a big one for lugging things, a smaller sedan for tooling around town and a sporty convertible for fun.
What do Americans want in a car? They want comfort and performance, which technology can deliver. And if the improved mileage doesn't pay all the extra costs of fuel efficiency, they still have a reward. They'll have cleaner air, less global warming and reduced dependence on foreign oil. Remember, Americans want those things, too.
COPYRIGHT 2009 THE PROVIDENCE JOURNAL CO.
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Views expressed in this column are those of the author, not those of Rasmussen Reports.
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