Stephen Wade, chairman of the National Automobile Dealers Association, wrote a letter to the editor of Automotive News that is important to read, whether you like it or not:
CAFE: Dealers know what sells
January 23, 2012 – 12:01 am ET
To the Editor:
The Jan. 16 editorial about fuel economy (“NADA must be reasonable about CAFE proposals”) overlooks a couple of key points:
— The National Automobile Dealers Association supports both continuous improvement in fuel economy and a single national standard to help get us there.
— When it comes to determining what sells in the showroom, auto dealers are in the best position to offer relevant comment.
We know firsthand, for example, that for the overwhelming majority of Americans fuel economy is not a major factor when deciding what car to buy. Price matters most. So when we learn that the proposed standards could add at least $3,200 to the price of the average car, we are naturally concerned.
The proposed rule requires a leap of faith, a sort of build-it-and-they-will-come approach, which may work in the movies but not in real life. In testimony at the EPA/National Highway Traffic Safety Administration public hearing in Detroit on Jan. 17, for example, manufacturer after manufacturer cautioned that there is no certainty as to how consumers will respond. It’s no wonder that even they called for a strong midterm review in 2018.
The manufacturers may be able to produce the right product mix, but it is the dealer who will have to pay for the product and then hope there are interested consumers. Dealers have already lived the nightmare of empty showrooms. To reap the societal benefits of higher fuel economy, government policy should encourage fleet turnover, not shrink the dealers’ customer base.
I would take issue with some of the points, but I do understand what’s being said and need to accept it. Dealers play a very important role in the auto industry, and in local economies. I really hope that a lot of education, training, and networking can come together so that dealers who are successfully selling hybrids, electric vehicles, and alternative fuel vehicles can coach others who need to bring in that skill set.
Early adopters have been buying a small number of Leafs and Volts, no matter what the price and the incentives. Next on the list will be upper income, educated people living in key metro markets. And third, most importantly, are car shoppers, who want good deals, safe and reliable cars, and something they enjoy driving. Range anxiety over charging and fueling will need to be resolved to reach them, but getting a good deal and an acceptable shopping experience (tied to digital marketing) is key to making this work.