Wednesday, 18 January 2012

U.S. Dealers Claim CAFE Proposal Will Add US$5,000 to New Car Prices

Last August, the U.S. government proposed a Corporate Average Fuel Economy (CAFE) target of 54.5 mpg to be met by carmakers by 2025. Despite initial reactions, the proposal eventually gained the manufacturers’ support. The proposal has received the backing of 13 major automakers, the UAW and several environmental groups, including the National Wildlife Federation and the Sierra Club. However, German automakers Volkswagen AG and Daimler AG have opposed the proposal because it offers no new incentive for diesel cars.

The National Automobile Dealers Association (NADA), which represents some 16,000 dealers operating 32,500 franchises around the country, announced on Tuesday that the proposal would effectively make new cars too pricey for some consumers.

According to Don Chalmers, chairman of the dealers’ association committee, a study that NADA will release next month shows that the proposed fuel consumption targets will increase new car costs 60 percent more than the government’s estimates. Chalmer claims that this will make a 2025 vehicle US$5,000 more expensive.

Well, in our opinion if the government wants to impose such law which is in favor of the country as well as the citizens but at the same is adding to the costs of the Car makers, it should have some money released for the same which could support the automakers and the car thus does not gets pricey which would again pass on the burden to the consumers.


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