Fuel efficiency rules, ethanol mandates and other government programs depend on a rapid rise in new car sales.
Detroit automakers were caught flat-footed last year as new car sales stalled, leaving dealer lots overcrowded and manufacturing plants idle. Now it appears Washington policymakers are at risk of falling victim to overly optimistic sales forecasts.
The White House finalized new auto fuel economy standards late last month that assume annual new car sales will rebound to levels unseen in the past two years, and will do so in as little as 18 months.
Likewise, congressional lawmakers pushing for more flex-fuel vehicles – cars and trucks capable of running on high blends of ethanol and gasoline – may watch the effects of the proposed legislation fall flat as a result of the significant drop in the sale of new vehicles that is dragging down the cash-strapped industry.
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New cars and trucks rolled off dealers' lots last month at a seasonally adjusted annual rate, or SAAR, of 9.86 million units, according to the sales-tracking firm Autodata. That number represented a slight uptick from the previous two months but was still nearly 500,000 units below last December's lackluster SAAR and 3.4 million less than last year's U.S. sales total.
