Auto Dealers Fight Mileage Rules

The group says that proposed rules to increase the fuel mileage of vehicles to 54.5 miles per gallon by 2025 would limit the growth of car sales.

January 19, 2012

DETROIT - The National Automobile Dealers Association (NADA), speaking at a hearing in Detroit earlier this week, came out against fuel-economy standards proposed recently by the Obama administration, maintaining the standards would limit the growth of car sales and make vehicles cost prohibitive, the Wall Street Journal reports.

The Obama administration is seeking to increase the average fuel mileage of new cars and trucks to 54.5 miles per gallon of gasoline by 2025.

Current standards require automakers to boost fuel efficiency to 35.4 miles per gallon by 2016. The proposal would require a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021, after which, both would face a 5% annual increase.

The plan offers credits for solar-panel roofs, hybrid trucks, alternative fuels, and other ways of improving fuel economy in ways that don??t figure into traditional Environmental Protection Agency (EPA) mileage tests.

The EPA and the National Highways Traffic Safety Administration (NHTSA) estimate that the additional technology required on vehicles will increase the cost of vehicles by $2,030, but that the lifetime fuel savings in 2025 would total more than $6,000.

Don Chalmers, the NADA??s government relations chairman and a Ford Motor Co. dealer, said the NADA disagrees with that cost analysis.

He said NADA will release a study next month that will project the technology costs to increase up to $5,000 the price of a vehicle, a cost prohibitive increase for many, despite the long-term fuel savings.

"Doesn't matter if beans are a nickel a bushel, if you can't get the nickel you can't get the bushel," Chalmers said.

The Detroit hearing featured presentations from automakers and United Auto Workers union president Bob King. Automakers consulted with regulators on the proposed rules, which were drafted last November.

The EPA and NHTSA plan to hold additional hearings on the matter in Philadelphia today and in San Francisco on January 26. Final rules are expected to be implemented this summer.

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