Tuesday, September 4, 2012
The Granolas' Big Win
-- Definition of a "Granola" according to Urbandictionary.com.
The "granolas" got a big win last week and almost no one noticed. The main stream media was so wound up about the Republican Convention and hurricane Isaac that they totally missed this one.
The Obama administration enacted the new corporate average fuel economy standards. Automakers will be forced to double the fuel efficiency of their vehicles to a fleet average of 54.5 miles per gallon by 2025.
Please don't get me wrong. I, like most other car dealers I know, am all for increased fuel economy and less dependence on foreign oil. But I want, and need, to be able to sell vehicles that my customers want to buy.
South Dakota is truck country. My customers are farmers, ranchers, outdoors men and small business people for whom their vehicle is more than just a means of transportation. It is a tool with which they go about doing their work. They cannot get the job done in some bubble-shaped plug-in hybrid.
Not only will these new standards reduce the availability of trucks (if not eliminate them completely), you can expect the average price of vehicles to go up by $3,000 to $5,500 per vehicle as well. If the consumer cannot afford the new vehicles, they will not buy the vehicles and all the "fuel savings" is lost anyway.
The "granolas" will tell you that people will save that money in fuel. One problem, banks don't lend on fuel savings. They lend on equity and payment to income data. In 27 years, I have never had a bank contract buyer as me how much to factor into the equation for customers fuel savings. So if the customer can't buy the vehicle, he cannot save the fuel cost!
This will also cause a loss of jobs in the automobile manufacturing segment as customers are eliminated from the market. But then the Obama administration has never shown a great deal of regard for jobs.
The "granolas" will tell you that some thirteen automakers agreed to these new standards. Well, let's see, who those might be? Should we start guessing with those who do not have an entry in the full-size truck or SUV market?
So the "granolas" push us toward smaller (less safe), more expensive and less utilitarian vehicles.
I wonder if the "granolas" have ever considered where the electricity for those plug-in hybrids comes from. 54% of the electricity in our country is produced by coal - but then they want to rid us of that as well!