Car makers are facing a conundrum as buyers are rushing to purchase bigger vehicles even as auto companies face steeper requirements for increasing fuel economy.
As reported by the Wall Street Journal, the development is evident in U.S. auto sales, which powered forward again last month as consumers bought trucks and sport-utility vehicles and abandoned fuel-efficient vehicles, according to results released Monday (Aug. 3).
Industry sales rose 5.3% to 1.51 million vehicles in July and are on pace to exceed 17 million for the year for the first time since 2001, according to Autodata Corp.
With the national average for fuel prices at $2.65 a gallon for regular gasoline, down nearly $1 from a year ago, consumers are snapping up pickup trucks and SUVs.
It is an issue for the Obama administration and its successor as auto makers have begun lobbying to relax fuel rules that would increase fleetwide fuel economy to 54.5 miles per gallon by 2025, or up about 5% a year through that period. The Environmental Protection Agency will review fuel-economy regulations in 2017.
Low fuel prices have been a windfall for consumers and are boosting economic expansion, but have come at the expense of fuel economy and investments made by auto makers in small or more-efficient vehicles, said Mark Wakefield, a partner with consulting firm AlixPartners LLP.
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