Under a provision of a plan to curb greenhouse gas emissions, the Obama administration has proposed to set less stringent standards for car makers that sell fewer than 400,000 vehicles a year in the U.S. That target defines the major German brands as well as a few smaller Asian manufacturers such as Suzuki Motor Corp. and Mitsubishi Motors Corp.
So which companies does this hurt the most? Those that sell more than 400,000 vehicles per year in the US. According to 2008 sales figures, that would mean that General Motors, Toyota, Ford, Chrysler, Honda, Nissan, and Hyundai would still fall under the most stringent across-the-lineup requirements. Heck, Chevy and Ford each sell more than 400,000 Silverado and F-Series pickups per year.
In essence, this regulation hurts companies which produce most of the cars that people drive; cars that are the most affordable means of transportation.
David Cole, chairman of the Center for Automotive Research at the University of Michigan, said the provision would hand “a distinct competitive advantage” to German and other exempted companies that compete with the major U.S. and Japanese brands in the U.S.
Well at least someone knows economics.
And companies that produce less than 400,000 vehicles (the target beneficiaries of these regulations) don’t fare much better:
- With sales drops in June of 78%, Suzuki can barely cling onto the US market, and Mitsubishi is close behind at 48%.
- Mercedes and BMW both build their SUVs here in Tuscaloosa, AL and Spartanburg, SC, respectively. Despite the fact that these aren’t “American companies”, both are responsible for employing thousands of Americans. These regulations constrict their ability to produce SUVs, first and foremost.
- Kia is a subsidiary of Hyundai.
- Mazda is associated with Ford.
- VW, which is now with Porsche, has combined sales nearing that 400,000 vehicle mark.
Autoblog makes an interesting point:
Nonetheless, these foreign automakers would still have an advantage over a company like General Motors, which competes directly against them with some cars such as the of the Corvette ZR1 and Cadillac CTS-V.
This is true. Mercedes AMG and BMW M performance divisions would have a competitive advantage against Cadillac’s V-Series.
If anyone in the Obama administration knew anything about cars, they would know that the Cadillac CTS-V and Corvette ZR1 are some of the best cars that GM has made in the past two decades, getting rave reviews from the New York Times and Top Gear host Jeremy Clarkson:
The Cadillac marches double-time into battle against anything from Germany or Japan. If only all of G.M.’s models showed this kind of commitment and competitiveness. (NYT)
The ZR1 has a supercharged V8 that manages to be both docile and extraordinarily savage all at the same time. Out of nowhere, this is my car of the year. (Clarkson)
But, remember who is in charge of Government Motors now? The guy who doesn’t know anything about cars.
And who put that guy in charge?