As it currently stands, automakers selling fewer than 10k cars in the U.S. hold a "get out of Corporate Average Fuel Economy (CAFE) standards" free card. As Automotive News [AN, sub] reports, the German automaker that sold 32,447 vehicles stateside last year is busy lobbying the feds to raise the exemption's limit to 64k cars. If Porsche's new, full-time lobbyist "convinces" legislators to widen the loophole, the Sultans of Stuttgart will instantly add $4.6m to their annual U.S. bottom line (the amount of CAFE fines they paid last year), protect their current model line-up (obviating the need to try to sell higher mileage vehicles), protect their current model line's power output (same again) and lower their technology costs (needed to meet the new higher standards). When asked about the move in consideration of the fact that "small" Porsche is about to take over mighty VW, Spokesman Tony Fouladpour simply issued the above headline. The rest of the industry isn't quite so taciturn. "Barbara Nocera, director of government and public affairs for Mazda North American Operations, warned that the redefinition would enable new entrants — such as automakers from China and India — to get a foothold in the United States." The Porsche loophole would also help Land Rover and Jaguar, immediately and dramatically increasing their value to potential buyers.
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Why is there any threshold for CAFE exemption at all?
I would assume that most companies who sell less than 10,000 units in the US are high-end manufacturers who sell to the very wealthy, the tax should apply to them too.
Honestly, are we to believe that Porsche is somehow not baking in $4.6 million worth of price increases into their cars to cover this?
So, wait…the last sentence was probably not from Barbara Nocera right?
Anyway, even if Jaguar and Land Rover would get a boost by this the Chinese could in the long run definitely hurt Ford.
Their products right now are laughable copies of western products. Like BMW X5s with Toyota Landcruiser headlights. Not to mention they are safety hazards. But then again, the Japanese and South-Koreans were too at one point.
So Ford (and GM) in this condition should be very happy with any measures preventing the Chinese from getting a foothold in the market.
What’s stopping the Chinese from flooding the market with 15 different manufacturers all selling under 30,000 units?
What’s stopping the Chinese from flooding the market with 15 different manufacturers all selling under 30,000 units?
Mediocrity? It’s up for debate as to whether Chinese automakers at this point can meet safety, emission, and other standards. In some European countries Chinese cars are banned at this point for not meeting standards.
Exactly my point, if there’s a 30,000 unit loophole for CAFE, what other emmission standard loopsholes are there that can be circumvented by lmiting production? Chinese automakers can do whatever they want. They work within a system that has no respect for intelectual property, they could make a part for part copy of a Mercedes S-Class tommorow if they wanted to and sell it under 15 different names. The only reason I can see for their lack of effort on the world wide acceptance front is that their domestic market is so lucrative that there is no point. When they have good reason to, they will be coming, and loopholes like this will make it easier.
Hopefully the government will go the other way and get rid of this exemption all together.
While they are at it they should stop calling three wheel cars motorcycles. That is the loophole thorugh with Zap brings nasty little electric cars and trucks (Xebra) in from China. These things probably couldn’t pass a bumper-basher test lot alone any real safety testing:
http://www.zapworld.com/electric-vehicles/electric-cars
“What’s stopping the Chinese from flooding the market with 15 different manufacturers all selling under 30,000 units?”
Because China is not one big car company or brand.
US has 300M people and three major car companies (2.8, 2.5, whatever), and they do not have a unified direction or coordinate their efforts to gain market share in foreign countries.
China has quality, design, political, and all other sorts of problems, no doubt. I wouldn’t buy their cars until they’ve proven themselves. But to say that all Chinese people will work together with the singular aim to flood the US market is rather uninformed and unthinking
I haven’t a clue where you got the idea that I was sugesting China as a country would be behind this, Chery as a brand could do this all by itself. No doubt with under the table subsidies.
There will ALWAYS be a loophole. We must have loopholes because most of the new rules overreach in order to ensure that the voters are “happy” and reelect the incumbents.
The problem with CAFE is that it’s an average to start with. Averages are usually the most idiotic way to measure or manage anything.
But if they jacked the Porsches up off the ground to get “light truck” status, then 20 MPG would be just fine? Why should light trucks get a gaping exemption while cars don’t? Why not just dump CAFE entirely and go with a fuel tax; let the consumers decide how and what to drive to achieve the goal of using less fuel.
Protecting the last revenue stream of the 2.8 would be my guess. I would love to know what happens to that money paid in CAFE fines.
jthorner:
There’s an exemption for Neighborhood Electric Vehicles which doesn’t require crash testing as long as top speed is limited to 35mph. The Xebra likely falls under this guideline.
Some other examples are the GEM and ZENN.
SunnyvaleCA:
Isn’t that the truth – all passenger vehicles ought to be subject to the same standards. (Subaru Outback Wagon, classifed an SUV?) Now, all we have to do is to define what the heck a passenger vehicle is…
I would kind of like a Porsche that got 30 mpg, something on the scale of the 356B or the early 911. Not everything needs to have 300 horsepower. I’m not fond of the fact that the current 911 is approaching the bulk of the old 928.