NADA chief Ed Tonkin fears a 60 mpg fuel economy standard will price many car buyers out of the market.
The National Automobile Dealers Association has put out the caution flag over plans now circulating in Washington D.C. to raise federal fuel economy standards to 60 miles per gallon by 2025.
“NADA has long supported improvements in fuel economy, but it’s also our role to raise some tough questions so there’s no rush to judgment,” NADA Chairman Ed Tonkin told the Automotive Press Association in Detroit.
The proposal by the Environmental Protection Agency and the U.S. Department of Transportation to increase fuel economy standards to 60 miles per gallon has been hailed by environmental groups, Tonkin noted.
“We would all like to believe consumers would be willing to pay whatever it takes to reach such a worthy goal. But will they? Or is this another example of getting ahead of the consumer, pushing too far, too fast? Will huge numbers of consumers be priced out of the market?” Tonkin questioned.
“Nothing happens without a buyer,” the NADA chairman added. “My job is to try to match supply and demand every single month everywhere I have a dealership. And this is true of every dealer in the country. Consumer demands vary from market to market. And consumer preference always prevails.”
Tonkin said when it comes to buying cars and trucks today, American consumers shop for convenience, predictability and affordability, and that fuel economy is not always a top priority.
Advanced technology has to be affordable to help transportation accessible to all Americans, he added.
“We are cognizant of the ripple effect of higher [vehicle] prices,” Tonkin added. “The risk is: if these fuel economy regulations are overly aggressive, it will price Americans out of the market. The same is true for credit.”
During the recent fight over financial services legislation, Tonkin said NADA had urged Congress to “keep auto credit affordable and accessible.”
“Despite huge odds against us, we prevailed because a majority of both the House and Senate recognized the automobile is a necessity of modern life,” he said. “[The automobile] is an essential building block of the U.S. economy.”
“We all hope there is some future technology that’s affordable and will get us to 60 MPG sooner than later. We all hope greater fuel economy will reduce our dependence on foreign oil. And we all hope advanced technology will further cut greenhouse gases,” Tonkin said.
“But we have to look beyond hope. Public policy has to take into account the harsh realities of the marketplace,” he said.