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On December 1st, the EPA and DOT proposed new greenhouse gas emissions and average fuel economy rules for vehicles produced for the 2017 model year and later, according to Allpar.com. In this proposal, the agencies made predictions regarding individual automakers and their sales numbers in 2025 compared to their sales in 2008. For Detroit automakers, these predictions are bleak.
The main contributor to the Detroit automakers’ predicted trouble is Chrysler/Fiat. For 2025, the newly combined company is predicted to see a 53.7 percent decrease in sales. GM isn’t helping the situation with only a 3.3 percent predicted increase. Ford’s sales are expected to hit right in line with Mazda and Honda with a 25.6 percent increase. While Ford’s sales increase is much better than Chrysler’s decrease, it’s still not enough to pull the Detroit automakers out of the negatives, with the Detroit total showing a 5.1 percent decrease in sales.
If you’re panicking now, just hold on for a second. As Allpar.com points out, these predictions are very premature and based off of data that isn’t very forgiving to the Detroit automakers.
The agencies used 2008 sales numbers to come up with their predictions. As you might remember, 2008 was just before GM and Chrysler’s bankruptcies. Unfortunately, this meant cratering sales for both companies. No one could have predicted then the rebound these two companies have seen since, so how can these numbers be used to predict as far into the future as 2025?
Another issue with the predictions comes from the uncertainty of what the 2008 year means to the EPA and DOT. Model year typically refers to the 15-month period between the time that new models are released and the end of the following year. No matter if you calculate the numbers based on the 2008 model year or the 12-month period between model years (October 2007 to September 2008), the numbers don’t add up. Additionally, predictions for Chrysler were based on the merger between the company and Fiat. Chrysler/Fiat didn’t exist in 2008, so predictions made on 2008 sales numbers couldn’t be correct because they don’t accurately portray the numbers for the since merged companies.
