The auto industry and its customers are suffering from unprecedented market conditions. Within the past six months, the industry has been hit with three unforeseen market problems: $4 per gallon gasoline, frozen credit markets, and, now, a recession that is spurring job losses and dampening consumer confidence. These factors combined to drive down U.S. new vehicle sales by 18 percent in 2008 (compared to annual sales in 2007) — this equals nearly 2.9 million fewer cars and trucks sold in our nation in 2008.
As Congress and the Obama administration consider solutions to our economic problems and long-term challenges of enhancing energy security and fighting global warming, modernizing our nation’s automotive fleet would go a long way toward accomplishing those goals. Currently there are nearly 250 million cars and trucks on American roads and highways. Many of these are older vehicles, manufactured prior to enactment of emissions standards that help make the new vehicles sold today dramatically cleaner and better for our air quality.
In the industry, we often say that the best thing you can due to reduce emissions is to purchase a new car. Why? Because today’s vehicles are 99 percent cleaner than vehicles of the 1970s, thanks to a dramatic reduction in smog-forming emissions. In fact, in recognition of the progress automakers have made in reducing smog-forming emissions, California has gone so far as to eliminate smog checks for new vehicles.
Automakers have supported fleet modernization programs in Texas and California and have encouraged Congress and the Obama administration to adopt a fleet modernization program with the following elements:
- Make vehicles 10-years-old or older eligible for trade-in toward a new, cleaner replacement vehicle that meets today’s air-quality standards
- Establish fuel-economy incentives for the replacement vehicle — the better the fuel economy of the replacement vehicle, the more incentive you receive toward its purchase
- Establish a simple point-of-sale system that consumers can use at the dealership
During these difficult economic times, this is the type of program that could provide critical assistance to consumers, auto dealers, and automakers alike. It’s also a program that the environmental community has embraced. As Dan Becker, director of the Safe Climate Campaign at the Center for Auto Safety, recently noted, “The stimulus is about creating jobs. If the automakers are able to sell the cars they make, they will be able to put people to work. Better technology requires more people.”
A broad fleet-modernization program available to American consumers could provide numerous benefits. It would benefit consumers who need a new vehicle that gets higher mileage. It would benefit our environment by replacing older, dirtier vehicles with cleaner, more efficient models. It would contribute to energy security by reducing our petroleum usage. And most of all, it is good public policy.