Wotka World Wide

Wednesday, May 20, 2009

The AP has a look at the rising costs of automobiles expected with the recently announced fuel efficiency standards:

The new rules would bring new cars and trucks sold in the United States to an average of 35.5 miles per gallon, about 10 mpg more than today's standards. Passenger cars will be required to get 39 mpg, light trucks 30 mpg.

That means cars and trucks on American roads will have to become smaller, lighter and more efficient.

Eric Fedewa, vice president of global powertrain forecasting for the auto consulting firm CSM Worldwide in Northville, Mich., said the changes will make pickup trucks so much more expensive that they will be used almost exclusively for work.

And instead of a minivan or SUV, more parents will haul their families in much smaller vehicles with three rows of seats - something more like the Mazda 5 small van, he said. The Mazda 5 gets about 28 mpg on the highway.

"I think what you'll see is a lot more creativity in interior packaging," Fedewa said. "You'll get more rows of seats where you traditionally had cargo space."

Already on Tuesday, some drivers were skeptical. Dixie Bishop, who runs a plumbing business in San Antonio that uses vans, worries the new requirements will drive up her costs at a time when customers are cutting back on repairs.

This all seems crazy to me, as cars will be vastly more expensive, while also smaller and lighter (meaning more deadly in a crash). Truck prices will skyrocket outside the range of your average consumer, while raising costs significantly for businesses that depend on trucks. And the claim that vehicle prices will rise $1300 seems pretty dubious to me, with the massive engineering costs that will go into these vehicles. I could see it being vastly more. What we are seeing is the freedom of a car being priced out of the range of the lower class. Once they ban the polluting older vehicles completely, the lower classes and immigrants will basically drive illegally or not at all. Of course, the Democrats are the party of the poor right? Don't expect these lower classes to notice they are being stepped on though...

And the era of sports cars could soon be over, as none of them come anywhere close to 39 mph, or even a third of that. Say good bye to Corvettes, Firebirds, Mustangs, etc. Only the rich will be able to afford vehicles like this, because of the penalties associated with buying foreign low mpg sports cars, as they will be the only things left.

Meanwhile, the Japanese have a huge head start on us, and do it with private companies, which virtually guarantees government ownership of American auto companies for the foreseeable future. Good thing for Ford they saw what was coming, but it is still questionable if they will survive these drastic changes to the rules.

Again, like health care, America seems to be rushing headlong towards the European model for society- a society with 10-15% unemployment that is held hostage to unions shutting down key industries every time they don't get enough increase in their month long paid vacations. Next the government will be announcing a 100% tax on the price of gasoline, to stimulate demand for more efficient vehicles. And look for a renewal of the 1970s idea of a low national speed limit around 60 or 55 mph, as this is the most efficient speed on highways.

Meanwhile, the Europeans are ditching their quasi-socialist leaders as quickly as possible to move towards the American model (see Merkel in Germany, Sarkozy in France, and whatever Conservative rises to the top in the UK elections next year, with Labour on the way out). It is a strange thing the way the world works.

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