Comment Log Display

The Alliance Of Automobile Manufacturers (Alliance) submits the
enclosed testimony in response to the revised regulatory proposal
implementing the Enhanced Fleet Modernization (EMF) component of AB
118.

The Alliance actively participated in the extensive negotiations
involving AB 118 and publicly supported its enactment. 
Historically, the Alliance has strongly supported Fleet
Modernization programs, which promote safety and fuel economy
while, simultaneously, reducing air pollution and greenhouse gas
emissions.

The Alliance supports the revised regulatory proposal with one
significant reservation.  Specifically, the Alliance objects to
Section 2623(f) and requests deletion of subdivision (f) in its
entirety.  The automobile industry is beleaguered.  Sales of new
vehicles nationally have plummeted from historic highs
(approximately 16 million, annually) to 10 – 11 million vehicle
sales, annually.   Manufacturing capacity has been reduced. 
Dealerships have closed.

2010 may be more promising, but daunting challenges remain.  For
example, financing is increasingly hard to obtain and expensive to
procure.  Consumers who wish, or need, to purchase a new vehicle in
2010 will confront limited financing opportunities.  Certainly, no
artificial impediment to the purchase of a new vehicle (and
retirement of an old vehicle) should be erected.

The Alliance considers subdivision (f) to be an imprudent
impediment to an optimally-functioning EFM program.  The intent of
the EFM program is to create incentives to purchase new vehicles
(and retire old vehicles).  There is no provision in AB 118 that
suggests incentives by other jurisdictions detract from the AB 118
program.  Nothing in AB 118 compels rationing of incentives.  To
the contrary, the express purpose of AB 118 is to accelerate Fleet
Modernization and avoid the inane and counter-productive
limitations of other “scrappage” programs.  Why discourage a robust
EMF program by instituting artificial constraints?  Do not
constrain the Enhanced Fleet Modernization program (emphasis added)
by imposing the limitation contained in (f).

The Alliance notes that nothing in the proposed regulations is
permanent.  If deletion of (f) produces objectionable results, we
will support an adjustment.  However, in the absence of evidence
demonstrating an objectionable result, we request deletion of (f).

Thank you for your willingness to consider our position.