U.S. auto dealers look to Trump to ease vehicle emissions rules

Source: By Nick Carey, Reuters • Posted: Friday, February 3, 2017

U.S. auto dealers gathered for their annual convention in New Orleans said they want President Donald Trump to ease federal regulation of vehicle emissions and consumer lending, reversing action taken by his predecessor.

Former President Barack Obama enacted rules requiring automakers to roughly double the average fuel efficiency of their U.S. car and truck fleets to 54.5 miles per gallon by 2025. U.S. consumers, however, are buying more SUVs and trucks amid low gasoline prices and shunning smaller, more fuel-efficient cars.

Mark Scarpelli, the National Automobile Dealers Association’s new chairman and owner of General Motors Co dealerships in northern Illinois, said the technology needed to improve fuel efficiency can add $1,500 to $3,000 to a vehicle’s price.

“You inflate the price of the vehicle and a car that was maybe within reach of being affordable now may not be,” Scarpelli said.

He added that a “different phase-in period” for the rules could be a better option.

U.S. auto dealers have a strong lobby in Washington, due largely to their engagement with and support for local congressmen. They are also aligned on the fuel emissions issue with U.S. automakers.

“We need to lighten the load because the government is trying to force manufacturers to make cars people don’t even want,” said Sidney DeBoer, founder of dealer group Lithia Motors Inc

Speaking at the NADA convention, Ford Motor Co Chief Executive Mark Fields said that when he and other auto industry CEOs met with Trump last week they told him that “various studies showed that up to 1 million jobs could be at risk if we’re not given some level of flexibility on that to align with market realities.”

Oklahoma Attorney General Scott Pruitt, Trump’s choice to lead the Environmental Protection Agency, has said he will review the Obama administration’s decision to lock in the fuel efficiency rules.

“They’ve got to make regulation more in line with consumer demand so (the automakers) can build what people want and not what the government’s telling them they have to build,” said Pete DeLongchamps, vice president of Group 1 Automotive Inc, which owns a networks of dealers.

In interviews on the sidelines of the NADA convention, dealers also said they are keen to see a loosening of lending restrictions put in place by the Consumer Financial Protection Bureau (CFPB).

The CFPB does not regulate dealers directly, but does regulate the lenders they partner with and has pushed banks and automakers’ finance arms to institute policies aimed at preventing discrimination based on race. These policies could have the effect of limiting the potential profit dealers make on loans they sell.

(Reporting By Nick Carey; Editing by Meredith Mazzilli)