No. of Recommendations: 6
The other is arcane CAFE standards that perversely incentivize larger trucks.
CAFE was "reformed" around 2006. The old reg set one number, that each OEM had to meet, using a sales weighted fleet average. An OEM could make as many big, V8 ground pounders as it wanted, as long as it sold enough small, fuel efficient, vehicles, to pull the average up.
That system went away in 2006. Now the model sets a mileage target for each vehicle based on it's footprint, the product of the wheelbase and track. Bottom line, there is no need to make small cars anymore, to pull up the corporate average. As an extra flourish, the formula used to calculate the target mileage was intentionally tweaked to discourage the production of smaller cars, as small cars were deemed "less safe" by the reg (yes, I read the entire thing when it was first published). Additionally, "trucks" were given easier targets to meet than passenger cars. So, bottom line, the reg was written to encourage production of big SUVs and trucks, and discourage the production of small cars.
Then the IIHS stepped in. The IIHS observed that engineers had managed to make small cars perform as well in their crash tests as big trucks. Instead of congratulating engineers on building safer small cars, the IIHS defined this as a problem. The crash tests were made even more challenging, with the stated intent of making small cars look bad.
While large SUVs and trucks offer the higher ATP and GP that the OEMs want, people could not qualify for the payments with traditional three year financing. So the OEM's "innovated" with ever longer financing periods, so the Proles could go farther in debt, and still qualify, based on the monthly payment.
Steve
