Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Rules Regulating Gas Mileage Face an Overhaul

December 22, 2003

Federal regulators are expected to propose a broad revamping of fuel-economy standards that could pressure auto makers to improve the gas mileage of some of their most lucrative sport-utility vehicles, according to the Wall Street Journal.The National Highway Traffic Safety Administration (NHTSA wants to close loopholes that, for instance, allow DaimlerChrysler AG's PT Cruiser to be classified as a light truck, making it subject to laxer gas-mileage rules than a car. Another loophole the agency is targeting allows vehicles such as General Motors Corp.'s Hummer H2 to escape any regulatory limit on fuel economy, according to the Journal.More broadly, the Bush administration says it wants to develop a system for regulating vehicles' fuel efficiency that also encourages greater highway safety. The administration has resisted calls for steep increases in fuel-economy standards, citing the need to protect U.S. jobs and federal research indicating that the regulations may undermine motorists' safety by encouraging auto makers to make their vehicles lighter, the Journal reported.The changes would represent the biggest regulatory rewrite in the 25-year history of the fuel-economy program, according to the Journal.On the face of it, such a system could benefit Detroit's Big Three auto makers -- GM, Ford Motor Co. and DaimlerChrysler's Chrysler division -- at the expense of Japanese rivals, whose vehicles tend to have smaller engines and to be more fuel-efficient. But certain variations of a weight-based system also could put the Detroit auto makers at a disadvantage, the Journal said.One way would be if the government were to require the same average fuel-economy standard for vehicles above a certain weight, pressuring manufacturers to reduce the weight of their heaviest vehicles, according to the Journal.
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