Chrysler Canada CEO wants ecoAUTO program repealed
Honda Canada is not the only company unhappy about the ecoAUTO rebate program in Canada. Chrysler Canada CEO Reid Bigland wrote an Op-Ed in the National Post urging the program to be repealed. Even though Chrysler has a number of vehicles eligible for the rebates either as a result of good mileage or flex-fuel capability, Bigland still feels the program is excessively arbitrary. Picking a cutoff and saying one car gets a rebate and another doesn't simply because one is slightly above the threshold and the other below doesn't seem far when both vehicles probably offer essentially the same efficiency in the real world. A program like this should really be done with a sliding scale. The rebate should be proportional to the mileage and shouldn't should be more technology neutral. The full-text of the opinion piece is after the jump.Related:
- Honda Canada tweaks the Fit to qualify for MPG rebate
- New Canadian ecoAUTO rebates apply to new 2006 models
As our society looks for answers on helping the environment, the subject of new vehicle fuel economy has received a great deal of attention. Yet, the fact remains that today's newest automobiles are the cleanest, most fuel efficient vehicles ever produced, and new vehicles sold each year represent approximately 1% of total Canadian Greenhouse gas emissions annually.
Canadian consumers today have a wide variety of fuel efficient vehicles to choose from featuring the latest technologies such as continuously variable transmissions, electric-gasoline hybrid power trains, new clean diesel engines, and cylinder deactivation. In fact, for years, Canadians, more than American consumers, have embraced small, fuel efficient vehicles. It is this market trend, combined with technological developments that drove Canada's auto companies to commit in 2005 to the Government of Canada to reduce GHGs by 5.3 million tonnes by 2010. In other words, the marketplace in Canada has made fuel economy a priority, without government mandates, incentives, taxes or penalties
It is for these reasons and more, that we at Chrysler Canada, and many other Canadian car companies, are concerned about the system of ecoAUTO rebates, which are available on select models, and the Green Levy fee which penalizes consumers who require larger vehicles with more people and cargo carrying space, and towing ability.
Chrysler's concerns about the program exist despite the fact that Chrysler has among the industry's highest number of vehicles that qualify for the $1,000 to $2,000 ecoAUTO fuel-efficiency rebates, including the new four-cylinder engine-powered Jeep Compass and Jeep Patriot and Flexible Fuel V-6 powered Chrysler Sebring and Dodge Avenger models. These new fuel efficient vehicles have propelled Chrysler Canada to be the second leading seller of vehicles in Canada this year, behind General Motors. And also, like Toyota and others, Chrysler offers smaller-sales volume multi-passenger sedans, sport utility vehicles and sports cars that get a $1,000 to $4,000 penalty tax tacked onto the purchase price.
Besides using taxpayer dollars to interfere with a market that already has a preference for good fuel economy, there are three main concerns with the current Vehicle Efficiency Incentive program:
1) By relying on arbitrary fuel economy rating cutoffs within each vehicle segment, the incentives makes winners and losers out of different brand vehicles that have minor differences in fuel efficiency.
2) Not all fuel-saving technologies are treated equally in this program. Advanced clean diesel engines can save 25%-35% fuel, but do not get the incentives that hybrid and ethanol type power trains receive. Clean diesel engines power more than half of all vehicles sold in Europe due to their fuel efficiency, but get ignored in the ecoAUTO program.
3) Today's automobiles, including larger sedans, trucks and sport utility vehicles are the most efficient and low-emissions ever produced. Yet, we are taxing Canadian consumers who legitimately need to buy them to transport people, cargo or do towing, for work or recreation. This added tax on these newest vehicles can lead consumers to hold onto their older, less environmentally-friendly large vehicles for longer periods. This will ultimately work against the goals of the program.
No matter how you judge this program, or try to fix it, the bottom line is that Canadian consumers and the Canadian auto industry are already moving in sync towards greater fuel efficiency. The added bureaucracy and expense of this taxpayer-funded Vehicle Efficiency Incentive program does not deliver the intended results, and in many cases drives consumers in the opposite direction. And lastly, Canadians need to consider the economic wisdom of using taxpayer dollars to subsidize the price of vehicles that are built, for the most part, outside of Canada.
We would encourage either the termination of this program, or the broadening of it to treat all technologies and consumers equally and to help replace the oldest vehicles on the road, which offers the greatest opportunity to improve air quality.
Reader Comments (Page 1 of 1)
Debarah 8:35PM (3/15/2008)
Hello
I have a milliondollar sales and Marketing idea. I would like to make an official appointment to speak to the right people with Chrysler Canada. Will you please contact me at my email address. Thank you
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Debarah 8:37PM (3/15/2008)
I have a million dollar marketing and sales idea. Please contact me directly at my email. I would like to set up an appointment to speak directly to the right contacts and people. thank you
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Tim 10:13AM (10/25/2007)
Why is it that the auto manufacturers ALWAYS fight what's good for their customers?
Bumbers, horns, safety glass, airbags, seatbelts, crumble zones, rollover protection, crash testing, pollution control, recycling…. You name it and if it was good for their customers, they’ve fought it.
Is this the only industry that punches it's customer in the nose at every opportunity? Then again, there’s the pharmaceutical industry, the tobacco industry…
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Snowdog 10:25AM (10/25/2007)
Complete BS. How are diesels exempted? They get the highest rebates in the program.
2006: Smart CDI: $2000 rebate.
2006: VW TDI Beetle/Golf: $2000 rebate.
For the most part it is results driven not technology driven which is the way it should be. The exception for E-85 should be quashed. Ethanol is a farce. A ton of energy to make it and then it gets terrible fuel economy when used in flex fuel vehicles.
Also there is a big advantage to NOT using a sliding scale. It makes manufacturers actually do something, like Honda tweaking the Fit for better gas mileage. If it was a sliding scale there would be ZERO incentive to improve to make the next rung on the rebate ladder.
So this guy is completely wrong in just about every way.
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Johnny Rotten 11:32AM (10/25/2007)
Hey Tim, that stuff may be good for you, but I don't want all of that liberal, government knows better, safety crap pushed on me. If want to buy that stuff, fine, I should be able to buy it in a free market, but if I want a stripped down sports car, I should be able to buy that too. I don't need a nanny. I can think for myself.
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Snowdog 11:39AM (10/25/2007)
Hey johnny Rotten:
I think you need to visit Calcutta and inhale deeply of the air that you get when the government doesn't interfere with safety/environmental stuff.
Short sighted morons should really think about what business would do if they were free to work unencumbered by government regulation.
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Tim 12:38PM (10/25/2007)
Johnny, I believe in the free market, however I also believe in personal responsibility. Freedom and Responsibility are 2 sides of the same coin. The manufacturers are responsible to build something that is safe and effective when used as intended. You should get what you pay for. Do you want an airplane whose wings fall off once you reach 1,000 feet?
Should government regulate this? NO!!!! That's what juries of the defendant's peers were designed for. But we have a seriously broken legal system. Once we let the barristers (attorney’s) into the legislator we were screwed! Originally, you couldn’t even be a Citizen if you had a title of nobility.
http://en.wikipedia.org/wiki/Esquire
We need to boot the lawyers out of the legislature as making laws that you can later profit from is a conflict of interest. (If he’s a lawyer, don’t vote for him) We need loser pays, award limits and pay limits for trial attorneys. 35% of the awarded damages, what vampires!
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Ernie 1:40PM (10/25/2007)
Bigland still feels the program is excessively arbitrary.
And yet, when CAFE standards can get thrown out the window just by making a car a liiiiitle bit bigger, (think the PT Cruiser) Chrysler doesn't mind in the least.
Maybe, they should just do what Honda did and engineer their way over that extra inch? Perhaps putting in that little bit of extra work just might even make their cars that much better, eh?
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BlackbirdHighway 1:01AM (10/26/2007)
The free market doesn't exist. It's a myth and an illusion preached by Milton Friedman and his minions.
Markets are always manipulated, and need to be regulated. Believing that corporations, if left alone, will offer lots of choices to consumers is to ignore reality.
Big corporations are not about offering lots of choices, and certainly not about making sure that products are safe. They are simply about maximizing profit, and there's really nothing wrong with that as long as you have regulations to keep them from totally disregarding the public good. That said, regulations also should not be too heavy handed, and limit choices. There needs to be a balance.
Basically, the capitalistic system runs on greed. Greed usually gets a bad name, but it is actually the primary driving force that makes people work hard, innovate, and try to improve the world. The problem with greed is that it's kind of like gasoline. When you burn gasoline in a controlled manner in an engine, it does useful work and moves your vehicle down the road. WHen you burn gasoline in an uncontrolled way, like spreading it around your house and lighting it, then it's not so good. When you let greed operate without regulation, then you have Enron, the Triangle Factory disaster, and so on. When greed is channeled and harnessed, it can accomplish amazing things.
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Tim 8:58AM (10/26/2007)
BlackbirdHighway- The general welfare clause in the US Constitution is about maintaining a proper environment for free market success in case personal responsibility is ignored thus threatening freedom. The Government MUST Protect consumers by keeping monopolies from forming as monopolies stop FREE market COMPETITOIN from doing what it does best which is to create innovation, improve quality & lower costs to the consumer.
The problem is that rich Oligarchs have monopolized government which itself is a monopoly. These Oligarchs natural tendency is to protect their interests. We must return to an unpaid citizen legislature with term limits and without campaign financing bribery and we MUST stop ALL forms of public welfare under the takings clause. The Constitution works when it’s followed, but right now, it’s being totally ignored. In fact, because the 2006 Military Commissions Act abolished habeas corpus, the Constitution is effectively DEAD… and so is the American dream. R.I.P. America.
http://www.ccr-ny.org/v2/restorehabeas/default.asp
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