Another Perspective

Cars, Climate, Fuel Efficiency, and the American Consumer

Cognitive dissonance writ large.

By 7.21.09

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I make it a practice to start reading the auto section of the newspaper whenever the car I am driving clears 100,000 miles. This allows ample time for detailed research on various options out there since I routinely drive a car well past 130,000 miles or more. In fact, my odometer is already registering over 160,000. You could call me a Detroit nightmare.

Since all but one of our children, a college student, has flown the nest, my wife and I no longer drive the big boomers we used to, an extension van or a full-size station wagon back in the days of soccer leagues and cross-country vacations. We pretty much stick with the basic sedans, which are priced right and reasonably fuel efficient, a plus in terms of our budget.

This means that we will probably not be availing ourselves to the latest congressional porker program, "Cash for Clunkers," which will reward the worthy owners, say, of a 1998 Mercedes-Benz M-Class sport utility or a 1992 BMW 8 Series if Kendra Marr of the Washington Post is to be believed ("You Call That a Clunker?"). Evidently, mileage is the key determinant of the government's largess which, therefore, rewards gas guzzlers who did not read the memo on fuel-efficiency or carbon footprinting.

A billion dollars are being thrown at this effort to promote fuel-efficiency, which is a drop in the bucket in terms of the total automobile stock of high-mileage cars and trucks out there. But, hey, who said federal legislation had to be cost efficient? Approximately 250,000 sales may be generated by this program out of reduced total car sales of 10 million this year. Still, that leaves a quarter of a million voters, plus the UAW, what's left of the Big 3 and the congressional delegations of Michigan and Ohio, who will be pleased. Unlike a gas tax or a revenue-neutral carbon tax, this accomplishes nothing significant, either economically or environmentally. It simply optimizes political symbolism and constituent loyalty.

As to my research on a new vehicle, I read a perceptive review of the 2009 Toyota Yaris S, a little bulldog of a car that provides basic transportation in the city and suburbs at a pretty reasonable price. The review in Sunday's Post, "What We Say We Want, Not What We Really Want," by Warren Brown, quickly veers away from the subject at hand into a perceptive analysis of Americans' stubborn refusal to buy these smaller, efficient, cheaper vehicles.

Despite the calls for more fuel-efficient cars and numerous complaints whenever Mr. Brown files a review on a new truck, sports car or luxury automobile, he is deluged with complaining letters, calls and e-mails.

"You [the readers] say that such automotive reviews are meaningless and bordering on consumer insult in our deepest economic downturn in decades," reports Brown. "You urge me to review more practical, affordable vehicles. I have and will continue to do so."

But maybe his readers can't stand the truth, to steal a line from a Jack Nicholson character. Says Mr. Brown: "But here is what for many of you will be a hard-to-swallow truth: Fuel-sippers such as the Yaris are selling in numbers well below those of the Ford F-series and Chevrolet Silverado pickup trucks." He then details the Automotive News Data Center top-10 rankings for the first six months of 2009:

The Ford F-Series trucks hold the top sales of 179,632. The Toyota mid-size family sedan comes in second with 150,242; and the Chevrolet Silverado pickup -- "in a year when GM, its parent company entered and exited bankruptcy" -- is a close third with sales of 149,949.

As for "genuine fuel misers," including the Prius hybrid with sales off by almost half compared to last year, "it's been an awful retail season." The Yaris, which Brown claims is built with "legendary Toyota quality and reliability," and is priced in the $12,000 to $14,825 range, has retail numbers down 40.4 percent in the first six months of 2009. Given the widespread interest in substantially reduced fuel consumption, as expressed in readers' reactions, the media and through the political process, there appears to be cognitive dissonance, writ large, exhibited in consumers' actual behavior.

Warren Brown believes "the problem is us."

"We want cars such as the Yaris and Fit when gasoline prices are high, or when gasoline is in short supply. But when gasoline is flowing at prices that make us smile, which it usually does in the United States, we'd much rather have a Chevrolet Camaro SS with a 6.2 liter, 426-horsepower V-8 engine," says Brown. "Strange as it might seem in these hard times, Chevrolet isn't having any trouble selling that one."

Cheap gasoline is either a blessing or a curse, depending on your views on consumer choice, national security, and the role of carbon emissions in a changing climate. American automobile companies are caught in a cross-fire between conflicting consumer and policy choices and will find it difficult to survive unless politicians quit focusing on them and either offer relief from regulatory mandates on fuel efficiency or shift their focus to the price of gasoline, which is at the root of consumer preference for "muscle" cars, big trucks, and SUVs which are great fun, often a practical necessity and, evidently, still affordable for a big part of the automotive market. Focusing on the price of gasoline would still allow for consumer choice while fundamentally altering demand in favor of greater fuel efficiency. It might also save a domestic industrial sector on the brink of extinction.

There is no certainty either way. But a gas tax would be a more "market-oriented" approach than the current approach. I confess to a certain ambivalence here, but clearly the sales of "fuel misers" were more robust when gas was closer to $4/gallon. As things stand now, domestic auto manufacturers face the worst of all possible worlds: regulatory mandates to sell cars Americans don't want to buy.

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About the Author

G. Tracy Mehan III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.