AutoNation Chief Executive Mike Jackson isn't a typical car dealer. The former head of Mercedes-Benz North America has been on a crusade to generate awareness that the U.S. should have a stiffer gasoline tax to drive sales of more fuel efficient vehicles and push the country to independence from Middle East oil. That's bold talk from a businessman who's part of a fraternity that typically suffers when gas prices climb.
With no sign of a gas tax increase coming from the White House or Congress, Jackson this week is going to help auto makers push more fuel efficient and cleaner-running vehicles by putting AutoNation's own marketing dollars behind those vehicles that get at least 28 mpg or deliver 10% better fuel efficiency than the average for their vehicle class. The vehicles will be promoted as "E-Vehicles" online, and with signage and display material in AutoNation's more than 350 dealerships nationwide.
"We want to increase consumer awareness of the number of fuel-efficient vehicles we offer," says Jackson. "Our E-Vehicle program lets them know in as direct a way as possible which vehicles satisfy specific efficiency standards. We hope that this increased exposure will help consumers become more aware of vehicles that contribute to making us less dependent on foreign oil, which is an issue of national security."
Doing a better job of pushing green vehicles, which often don't pack the profits of thirsty luxury cars and SUVs, could, in part, work against Jackson's own interests. The company's one-year sales growth is down 1.4% year-over-year, and net income was down 36.2% for the same period. But if gas prices continue to climb again toward $4.00 per gallon, it's in his best interest to not only attract buyers of fuel-sippers to his dealerships, but also to include flex-fuel trucks and SUVs in his marketing scheme to help those vehicles hold their own.
If Jackson had his way, car dealers would be selling many more Toyota Priuses, Honda Civics, and Ford Focuses than Cadillac Escalades, Hummer H2s, and Toyota Sequoias, even though dealers make much more profit on the big gas guzzlers than the fuel sipping small cars. A self-described Republican, Jackson nevertheless sounds more like the head of the Sierra Club than the head of the world's biggest chain of car dealerships.
Specifically, Jackson has been calling for a 10-cents-a-year hike in the current federal gas tax of 18 cents per gallon to decrease dependence on foreign oil. At $3 a gallon, which is where the prices of regular gasoline is in many states today, consumer behavior changes a bit, Jackson says. But for consumers to really change their behavior on the scale that it changed in the 1970s and 1980s, gas has to reach $6 a gallon.
Getting on the E-list
"This is the way that Europe moved its population to buy much smaller and more fuel-efficient vehicles, and specifically drove the adoption of clean diesel fuel," says Jackson. The average fuel economy of new cars sold in Europe is above 40 mpg, twice the level in the U.S.
AutoNation's list of "E vehicles" includes 212 vehicles, or about 23% of 906 vehicles on the market. It includes any vehicle that gets 28 mpg or delivers 10% better fuel efficiency than the average for their vehicle class.
Toyota has 26 vehicles on AutoNation's list, the most of any manufacturer. The makes range from the Yaris — a subcompact that gets 36 mpg — to the five-speed Tacoma, which gets 20 mpg, and which leads the small pickup category. Honda and Chevrolet tied for second, with 16 vehicles on the list, followed by Ford and Hyundai, with 15 each. Edmunds.com, the online vehicle-research site, crunched the numbers for AutoNation using data from the EPA. The list includes 80 vehicles.
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