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CALIFORNIA'S LOW EMISSION VEHICLE REGULATIONS WILL REDUCE NEW CAR SALES, COST JOBS

 ANN ARBOR, Mich., Feb. 9 /PRNewswire/ -- California's low emission regulations will drive up new vehicle prices and drive down new vehicle sales, making these measures counterproductive. This is the conclusion of a strategic analysis recently completed by the Automotive Consulting Group, Inc. (ACG), an Ann Arbor-based research firm.
 ACG projects that Low Emission Vehicle (LEV) regulations will add $911 to $1,343 to the price of a new vehicle, while Ultra Low Emission Vehicle (ULEV) mandates will cost consumers between $1,666 and $4,005. "Some regulators and legislators believe the average family can afford higher prices, but that is just not realistic," stated Dennis Virag, ACG's managing director. "The upcoming wave of regulations will result in inflated new car prices which will force more consumers to drive their older, polluting vehicles even longer," he predicted.
 Currently, California, New York and Massachusetts have adopted low emission regulations. In addition, the governors of nine other states (plus the District of Columbia) have committed to pursue passage of the California regulations. "Adoption of these measures will drive down new car sales, decrease jobs, and reduce both state and federal tax revenue. Meanwhile, the improvements in air quality will be minimal," stated Virag. "Assuming normal vehicle scrappage over the next 25 years, 1994 Federal Clean Air Act standards will reduce automotive emissions over 77 percent while the California low emission standards (including Zero Emission Vehicles -- ZEVs) will reduce emissions about 82 percent. But if consumers can't afford the added price for low emission vehicles, they will not replace their existing cars and trucks. Thus, the mandates become less effective," he said.
 Between 1980 and 1990, the average price of a new car increased more than 111 percent while average family earnings were up only 62 percent. As a result, the number of 11-plus-year-old vehicles on the road increased from 24 million to over 50 million during this period. "There is a direct correlation between vehicle prices and sales," stated Virag. By analyzing the cost implications of the California Air Resources Board (CARB) mandates, the study's author looked to demonstrate the impact that overly ambitious emission regulations may have on new vehicle sales and on the environment. "We want people to realize that the standards coming out of Sacramento and other state capitals are going to have little, if any, benefit in air quality and fuel economy," said Virag.
 This is the fourth in a series of reports dealing with various aspects of the Clean Air Act and CARB regulations. For more information on the regulatory series, or to obtain a copy of the report, interested parties are directed to contact Dennis Virag, managing director, The Automotive Consulting Group, Inc., 2004 Hogback Road, Suite 2, Ann Arbor, MI 48105 or call 313-971-1110.
 -0- 2/9/93
 /CONTACT: Dennis Virag, managing director, Automotive Consulting Group, Inc., 313-971-1110/


CO: Automotive Consulting Group, Inc. ST: Michigan, California IN: AUT SU:

JG -- DE004 -- 4530 02/09/93 10:03 EST
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Date:Feb 9, 1993
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