New Fuel Economy Standards (CAFE)

Sorry, but I think this is totally off-base.

You seem to be saying that domestic car manufacturers are not making the types of cars that people want (quality and mpg). OK, I'll go along with that for the sake of the discussion.

Do we *really* want the govt to 'force' them to do it? Why not let the free market speak (it is!).

What you are actually saying is, that a govt representative should be sitting in on GM's planning sessions, and helping them design the new model year roll-out. That the govt should be making cost/quality and marketing decisions. Hey - convertibles will be big next year - trust me, I'm from the govt! I don't want that. Do you?

-ERD50

I'm not saying that the government should be sitting in on marketing decisions of car makers, but the car companies will drag their feet forever before offering higher mileage quality vehicles in the US because they don't make as much money on them. I agree with you that it is a marketing decision by car companies selling vehicles in the US not to offer the higher mileage vehicles that other parts of the world get, but not because there isn't a market for them, but because it's an economic decision by the car companies to make more money off of us "rich Americans". They can and DO make more money in the US, therefore why offer a cheaper higher mileage vehicle unless forced to by the government by enacting higher CAFE standards. And there IS a market for those higher mileage vehicles, but currently the car companies won't go there unless forced to.

You say that the free market is deciding what vehicles to sell in the US. The free market isn't deciding...car companies are deciding based on profit motives, not consumer demand.
 
Sorry, but I think this is totally off-base.

You seem to be saying that domestic car manufacturers are not making the types of cars that people want (quality and mpg). OK, I'll go along with that for the sake of the discussion.

It seems to be the current modus operandi...........

Do we *really* want the govt to 'force' them to do it? Why not let the free market speak (it is!).

Toyota and Honda are forcing the Big 3's hands, by pummeling them in sales each year, forcing them to sell models at fire sale prices with big rebates. That doesn't help resale value, so the cycle continues.......

On an inflation-adjusted basis, gas is still cheap. A fair number of folks are going pay the piper and keep driving...........
 
I'm not saying that the government should be sitting in on marketing decisions of car makers, but the car companies will drag their feet forever before offering higher mileage quality vehicles in the US because they don't make as much money on them.

OK, I understand you better now. Yes, the car makers will drag their feet in making high mpg cars if there is little profit in them. But I think you are putting the cart before the horse (or something?). There is (relatively) little profit in them, because there is (relatively) little demand.

therefore why offer a cheaper higher mileage vehicle unless forced to by the government by enacting higher CAFE standards.
A more effective way of creating this demands is through fuel taxes. That creates demand for high mpg cars AND encourages conservation through a myriad of ways that the govt cannot legislate. Though they do try - T-AL pointed out in another thread how an 18mpg SUV labeled 'hybrid' can use the car-pool lane, but a 35mpg non-hybrid is banned. It just gets wacky unless you go to the root - fuel prices.


And there IS a market for those higher mileage vehicles, but currently the car companies won't go there unless forced to.
They will go wherever there is a profit to be made. If there is demand, there will be profit - how can this not be?

By your logic, car makers would only sell top of the line cars loaded with options (ignore mpg for a minute), because they make nice profit margins (and amounts) on those. But they sell mid and low priced cars, some stripped down, because there is a market for them, and if they don't sell the car to me their competition will. It is better to make a small profit, than no sale at all (with no follow up service sales).

mpg is the same - if there was a larger market, it would be addressed more than it is today.


-ERD50
 
Of course theres very little demand. The masses have been inoculated to believe that bigger, faster and more expensive is almost always better. You need to be driving down the road in an 8000lb vehicle, eating a half pound cheeseburger with a quart of mayonnaise on it, while your iphone is securely jammed to the side of your face.

Otherwise you're just sucking.
 
Of course theres very little demand. The masses have been inoculated to believe that bigger, faster and more expensive is almost always better. You need to be driving down the road in an 8000lb vehicle, eating a half pound cheeseburger with a quart of mayonnaise on it, while your iphone is securely jammed to the side of your face.

Otherwise you're just sucking.


Pretty funny!
 
If you guys really think advertising is THAT powerful, then instead of CAFE standards, we should only allow car makers to advertise vehicles that get above xx/yy mpg city/highway. That would fix us up this old pesky fuel consumption problem in a nano-jiffy!

-ERD50
 
You must be right, advertising and peoples desires must just not have any effect.

Thats why the majority of vehicles I see on the road are large luxury cars, SUV's and pickup trucks.

I'd presumed all this time that these folks really werent regulary hauling 5000 lb trailers, heaps of cinder blocks, and six people with all their luggage.

I stand corrected.
 
Buy any 'New Coke' lately? How much did they spend on advertising?

Of course, I never said that advertising did not have 'any effect', just that I thought you 'overestimate the power of advertising'.

Zathras: Tesla *is* a great example of a greenie putting their money on the line. But, it's not an affordable car, so not really an answer (yet) to a cheap, high mpg vehicle. Hopefully, someday soon!

-ERD50
 
When in doubt, pick an outlier. New Coke wasnt an advertising mistake it was a major strategic product error.

As far as the lack of power in advertising...hmm...the world seems to be disagreeing with that thesis.

People wont buy something that they dont want, that they dont like, that doesnt improve their perceptual status, no matter how many advertising dollars are involved.

But create a perception of betterness, or make something they want to buy seem like a good choice, and the public will champ at the bit.

Hell, give me a half billion in marketing budget, and I'll bet I can even make a vulcan like you want to pay an extra 30-50% of profit markup on a computer that isnt any better than the average.

I'll not only make you think that and get you to buy, I'll get you to stand up and take your own time defending your decision by telling people on the internet that its better, and I'll get you to repeat all the same marketing horsepuckey that I fed you. Word for word.
 
When in doubt, pick an outlier. New Coke wasnt an advertising mistake it was a major strategic product error.

As far as the lack of power in advertising...hmm...the world seems to be disagreeing with that thesis.
Not an outlier...precisely on point! Coca-cola decided what product to offer the public, produced it, and pushed it to consumers via advertising. I believe this was in response to somone's opinion that mfrs simply 'decided' to make inefficient vehicles and 'tell' the public what to buy.
 
Well, the Prius seems to be a "hip" vehicle for the Hollywood types, although I doubt Ferrari, Mercedes, Porsche, or Rolls Royce are scared........they are just adding to their fleet.........
 
Hell, give me a half billion in marketing budget, and I'll bet I can even make a vulcan like you want to pay an extra 30-50% of profit markup on a computer that isnt any better than the average.

Honestly CFB, this 'issue' seems to be much more of a 'hot button' for you than it is for me. Did an apple fall off a tree and scare your mother while you were in the womb? ;)

Not gonna bite though. Just putting on a string of garlic and getting out my vampire mirror and making the incantation..."Lexus". You can go on about how it wasn't the advertising, really won't be that expensive when you factor in depreciation, amortization..... :rolleyes:

'outlier' or 'inconvenient truth'?

-ERD50
 
Speaking of cars, how many folks have seen the Lexus commercials that show Joe Average American buying a $50,000 car for his wife?

I married the RIGHT woman, she would call the divorce lawyer as she was standing in the driveway if I did that........:
 
Not an outlier...precisely on point! Coca-cola decided what product to offer the public, produced it, and pushed it to consumers via advertising. I believe this was in response to somone's opinion that mfrs simply 'decided' to make inefficient vehicles and 'tell' the public what to buy.

Okay then, let me give a refresher course in "How to screw up a major branded product 101", since it seems that the new coke debacle isnt well remembered.

Coke was a flagship worldwide branded product with a rapidly growing competitor that had a sweeter, somewhat different tasting product, Pepsi. Seeing that Pepsi was quickly catching up to them in product sales, Coke elected to change their product recipe to simulate Pepsi, drop their regular product, and "join them if you cant beat them". Clearly this was a fundamental error in judgment on behalf of company management.

People bought Coke because they liked Coke, it was what they wanted to drink, and because it was probably what they'd been drinking for years. Changing the formula meant that most of your existing customers would stop buying it because it was no longer the same. In parallel, there was no reason for existing Pepsi drinkers to say "well hey, this new coke tastes almost the same, lets abandon what we know and like for this other thing!". All the advertising in the world wouldnt change that, because there was no impetus for existing customers to stay and no reason for prospective customers to switch.

The approximate equivalent would have been Chevy saying "well, those Ford truck guys were right and they make better trucks, so we're going to make a near duplicate of the Ford pickup, except we're going to put a Chevy badge on it.". Ford buyers arent likely to stop buying Fords and start buying Chevy's that are just about the same as Fords. And your long time Chevy buyers arent going to be thrilled with it either.

This isnt a case of "lets make something people dont want and then shove it down their throat with advertising that makes them do things they otherwise wouldnt", its "Lets excite people about buying what they want anyway - a big powerful heavy safe vehicle that makes them feel big and powerful, then build lots of what they really want."

The advertising isnt creating the demand, its simply helping elevate the original desire in the customer.

Creating an advertising and product strategy around small fuel efficient cars would be like the Beef industry putting up ads telling you that tofu and broccoli are better for you, so eat that instead. Its not what you want. On the other hand, putting on a "BEEF! Its whats for dinner!!!" while showing large sizzling slabs of meat on a grill? That'll work.

Perhaps theres a fundamental disconnect in that people here think that the average american consumer cares about oil economics and politics and wants to do the right thing for the country and the earth.

People are largely interested in being comfortable, serving their own base needs, covering up their inadequacies and avoiding things they fear (or conquering them).

Marketing and advertising simply plays on those instincts.

Except for a small percentage of intelligent, earth-crunchy people, gas mileage isnt of interest for most people. In a recent survey I saw of car buying criteria, gas mileage hovered in the #4/#5. With $3.25 gas in evidence.

The car buying public is more interested in speed, safety, power, comfort and reliability, not mileage or emissions. The car companies make more money selling big, feature rich vehicles with big motors and aggressive looks.

Its a win/win for the car makers and the buying public...all the latter needs is just a little push.

By the way, I'm not getting the Lexus stuff. Its just proving my point. My wife was advertised into believing that a Toyota with a different name on it would tell everyone that she's wealthy and powerful and has "arrived", and she never had a nice new expensive car before. I had no need to deny her something that she wanted.
 
By the way, I'm not getting the Lexus stuff. Its just proving my point. My wife was advertised into believing that a Toyota with a different name on it would tell everyone that she's wealthy and powerful and has "arrived", and she never had a nice new expensive car before. I had no need to deny her something that she wanted.

The main difference is,you can afford said car. Does Lexus really want us to believe the average American can afford a Lexus? Because, they can't..........
 
Of course not. By showing the average joe buying his wife a lexus for christmas, the guy making a little more money feels like a chump for not doing it. Lexus isnt interested in getting everyman to buy a car they cant afford, they're interested in getting that financial layer just below their current buyer.

But gosh, that low end and mid range lexus might be reachable via a special lease program for the average joe... ;)
 
Of course not. By showing the average joe buying his wife a lexus for christmas, the guy making a little more money feels like a chump for not doing it. Lexus isnt interested in getting everyman to buy a car they cant afford, they're interested in getting that financial layer just below their current buyer.

But gosh, that low end and mid range lexus might be reachable via a special lease program for the average joe... ;)

I must be stupid, I can get a loaded Avalon for $6,000 less than an ES 330..........
 
I must be stupid, I can get a loaded Avalon for $6,000 less than an ES 330..........

Not stupid. Practical. And in my mind practical equates to sensible. And I have heard many times the cries regarding the death of "common" sense.
 
Not stupid. Practical. And in my mind practical equates to sensible. And I have heard many times the cries regarding the death of "common" sense.

Funny, I just got some grief by one of my acquaintances today about my personal car, a 2003 Honda Accord 4-cylinder.

When I told him a car was the LAST thing I was concerned about, he asked if it was hurting my business because I didn't drive a fancy car. My comment? "If my clients are basing the decision to hire me on the car I drive, I've got big problems".........
 
One thing that many people miss is that even if a small percentage of people (lets say 5%) are interested in higher gas mileage over power and car size, that's still a substantial number of potential customers in a market as large as the US. So, the point I've been trying to make in some of my earlier posts is that for the most part car companies have been ignoring these customers by offering only expensive hybrid cars and not smaller-engined gasoline-engined cars that get similar mileage. It's starting to change a little though. I just ran across an article on the web about a new small car that Toyota may offer for sale in 2008 to US car buyers that will compete with the Smart Car and get over 50 mpg. It's called the Toyota Aygo. I've read threads in many car forums on the internet that people here in the US would love the same small cars that are offered in Europe and Asia but for some reason car companies haven't been offering them here in the US. Maybe it takes something like an increase in the CAFE standards to nudge car companies to even consider the possiblity that Americans would drive the smaller cars. I always hear the argument that car companies would have already offered them for sale here in the US if there was a market for them. The problem is, how do they know that there isn't a market here for them, when they've don't offer them here now. Anyway, here's a link to information about the Toyota Aygo:

http://www.edmunds.com/insideline/do/GeneralFuture/articleId=116832

I know there will be someone in this forum that says...I wouldn't be caught dead in a vehicle like that since it's so small and would be a death trap in a car accident. Some people are willing to take that risk. So don't buy it if you're more safety conscious, but don't knock those who might want to make that choice. Just because you don't want it doesn't mean that there aren't others that would eagerly buy it. If a car like the Toyota Aygo came out in the $12,000-$14,000 range, I'd consider buying one just as a city commuter. It would make a great 2nd car for many people.
 
Last edited:
I must be stupid, I can get a loaded Avalon for $6,000 less than an ES 330..........

Yep, you're sensible. I bought a completely stripped honda pilot for $22k instead of a $45k acura mdx.

I suggested to my wife that she look at a loaded avalon for half the price.

That wasnt what she wanted. Since most of the rest of the stuff she buys comes from walmart and target, and she isnt much of a spender, its pretty tough to say 'no' on the occasions when she wants something.

By the way, she said she'd settle for the ES3xx and I was the one who said we'd buy the big one, because it carried more value and had a better depreciation curve.

So far its 2 years old, has 5000 miles on it, and in 14 years my son is going to learn how to drive in it and it'll be his first car. With a projected 50,000 miles on it...

Now, back to the matter of the actual topic of conversation here, the simple matter is that people dont want econoboxes, they'll pay for the gas, the manufacturers want to make a profit and they do that best by selling big loaded vehicles...hmmm...who gets left holding the bag? Oh yeah, the federal government, who has to manage monetary policy, the economy, and the politics associated with oil importation and consumption.

So given that they're standing there waiting for everyone to quit supersizing everything (which aint gonna happen), they force the manufacturers to make more economical vehicles and present those choices to the buying [-]cattle[/-] masses.

You arent really expecting that the people who floor it through a stop sign to get to the next red light .2 seconds faster and who pass you on the right in the breakdown lane on an entrance ramp to get into heavy traffic one car further up are going to make good long term rational decisions about this matter, are you?
 
DallasGuy - sure, some people will buy the super-small cars. But for the most part, those people already drive reasonably efficient cars, so the savings (in gallons) is also quite small. Remember that for 10,000 miles driven, going from a 15mpg vehicle to a 20 mpg vehicle (only 5mpg, 33%) saves 167 gallons. But going from a 30 mpg to a 50 mpg vehicle ( 20 mpg and 67%) saves only 133 gallons.

CAFE takes this into account, they use a harmonic mean. But people don't.

The trouble is, the high mpg cars are generally smaller, lighter, low power - and to some extent, people reject those. The alternative is to boost mpg with the hybrid system - but that costs money.

I still say mpg is too narrow a focus. Public trans car pooling, telecommuting, jobs closer to work, etc, should get more attention.

What easier way to double the mpg of any vehicle, at no cost and with available technology, than to car-pool? CAFE ignores this (and so many other things).

And those small inexpensive cars may not qualify for 'hybrid' benefits - even though their mpg may be as good or better.

-ERD50
 
DallasGuy - sure, some people will buy the super-small cars. But for the most part, those people already drive reasonably efficient cars, so the savings (in gallons) is also quite small. Remember that for 10,000 miles driven, going from a 15mpg vehicle to a 20 mpg vehicle (only 5mpg, 33%) saves 167 gallons. But going from a 30 mpg to a 50 mpg vehicle ( 20 mpg and 67%) saves only 133 gallons.

CAFE takes this into account, they use a harmonic mean. But people don't.

The trouble is, the high mpg cars are generally smaller, lighter, low power - and to some extent, people reject those. The alternative is to boost mpg with the hybrid system - but that costs money.

I still say mpg is too narrow a focus. Public trans car pooling, telecommuting, jobs closer to work, etc, should get more attention.

What easier way to double the mpg of any vehicle, at no cost and with available technology, than to car-pool? CAFE ignores this (and so many other things).

And those small inexpensive cars may not qualify for 'hybrid' benefits - even though their mpg may be as good or better.

-ERD50

I agree with you on attacking the problem on several fronts. I started telecommuting about 6 months ago and now instead of filling up every week I fill up every 2-3 weeks. The company I work at is encouraging people to work from home so things like that are starting to work a little on that front. Also car pooling and mass transit is good, although easier in some cities than others.

This is not a problem that will be solved overnight. It takes many years for people to change their views on transportation and it will take a long time for people to drop the idea that a car is a status symbol and not just a way to get from point A to point B. I don't disagree that raising gas taxes would help encourage people to conserve but I also believe that by raising the CAFE numbers, the car companies are being nudged in the direction of offering more economical choices....whether it be a truck that goes from 10 mpg to 13 mpg OR a compact car that goes from 35 mpg to 40 mpg...it all helps. If all of sudden the price of gas dropped to 99 cents a gallon, I'd probably say the higher CAFE numbers aren't necessary, but with the prospect of ever higher gas prices, it's just a matter of time before the public SLOWLY edges towards higher mileage vehicles. If someone just bought a gigantic SUV this year, they're probably not going to rush out and sell it and replace it with a 40 mpg econobox tomorrow just because the price of gas went up. BUT if gas keeps rising in price, the next time they buy they may be just a little more conscious of what kind of gas mileage their next vehicle is getting. But at least by the time a person is ready to buy their next vehicle perhaps the higher CAFE standards might allow them to purchase a vehicle with higher gas mileage than it otherwise would be without the higher standards.

Whether you raise the taxes on gasoline or whether you raise the CAFE standards, you're still manipulating the market, just in different ways. The end goal is the same...to conserve and to make the US less dependent on oil imports. You can argue which one is better. I actually wouldn't be against raising the gas taxes...however it's one of the more regressive taxes hitting the poor the hardest and the transportation industry would fight it pretty hard. Also, it would be very unpopular with most Americans so I don't think it would ever pass.
 
I'll be the first to type it, there is no way I will buy the Aygo. With my size it just won't happen. Granted I lost a lot of size when I stopped working out so much, but I'm still a large person and squeezing into that most likely won't happen with any type of comfort.

I do agree many jobs could be tele-commute, but managers do not want to give up that much control.
 
One big difference in the US Market is the demand for creature comforts that consume energy and require more horsepower such as AC and automatic transmissions. The one idea I like about higher gas taxes would be to use the proceeds to fund alternative energy development. Not sure what level of tax would generate a meaningful amount of money, but Im thinking a nickel or dime a gallon to start.

The CAFE is such a ruse because it does not compute passenger miles per gallon. Full line manufacturers are penalized vs companies that only produce economy cars. CAFE I drove the whole industry out of body on frame construction and rear wheel drive into uni-body and front wheel drive. So what did people do? They bought SUVs which had a less restrictive CAFE formula but still run body on frame and rear wheel drive. You could make an argument that CAFE hurt the fleet average...law of unintended consequences.
 
Back
Top Bottom