Auto makers snipe at feebate 'inequity'The new federal “feebate” scheme could generate $40-million in savings for Toyota Canada Inc. buyers while purchasers of new vehicles from the Detroit three would pay about $45-million in penalties on gas guzzlers.
Those numbers are based on 2006 sales of the vehicles that are eligible for a rebate and subject to a penalty in the program introduced in the federal budget on Monday that has become the subject of intense debate in the auto industry.
An analysis circulating in the industry shows that based on last year's sales figures the $1,000 rebate on the Toyota Yaris subcompact alone would have generated about $34-million in savings for Toyota buyers. People purchasing gas guzzlers from DaimlerChrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd. would have been out of pocket $55-million, offset by about $10-million in savings, mostly from a rebate on sales of ethanol powered vehicles.
Honda Canada Inc., Hyundai Auto Canada Inc. and Nissan Canada Inc. are expected to lead the charge for a strong stand against the budget, industry sources said yesterday.
“It's going to be an interesting meeting,” said Lindsay Duffield, president of BMW Canada Inc., who is also this year's AIAMC chairman.
They will run up against Toyota, which has expressed strong support for the budget and did so again yesterday.
“What the government is attempting to do here is to respond to the challenge of climate change,” Toyota managing director Stephen Beatty said.
He said he has not done an analysis that would confirm the $40-million in savings for Toyota buyers, but noted that its sales change from year to year and the auto maker would be unable to boost production immediately if there was a sudden surge in demand for the Yaris based on the $1,000 rebate.
The difference in fuel consumption between the Yaris and some other subcompacts in the segment is the equivalent of a 19-per-cent difference in CO{-2} emissions, he said.
“In the context of public policy around climate change, that's not a drop in the bucket,” he said.
He noted that some Toyota vehicles are penalized by the gas guzzler tax and some Chrysler and GM vehicles are eligible for a rebate. The rebate applies to hybrids, vehicles capable of using E85 ethanol and other fuel-efficient cars.
“If I were at General Motors right now, I think I'd be looking at how to make every Impala I sold an E85 vehicle,” Mr. Beatty said. “I think that changes the economics of it.”
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