A Canadian
government program meant to encourage the buying of fuel efficient
vehicles, like hybrids and small cars, has also increased
sales of pickup trucks.
Pickups
are exempt from Canada's 5-month old 'eco-AUTO'
initiative, which uses 'feebates' to reward or punish buyers depending
on a vehicle's fuel economy. The
reason for the exclusion is that Canada's federal government considers
most pickups to be work vehicles purchased out of necessity rather
than voluntarily by consumers.
The green-vehicle
effort
provides
government-funded rebates up to $2,000 CAD ($1,865 USD)
for light trucks that achieve an average fuel economy of 8.3-liters
per 1,000-kilometers (28-mpg) but hits gas guzzlers, like full size
sport utility vehicles, with a tax penalty of up to $4,000 CAD
($3,729 USD) tacked onto the purchase price. This has motivated SUV
shoppers to opt for a pickup truck instead.
"Leave a
loophole and consumers and dealers will exploit it. [Pickups]
provide all the utility of a large SUV and are not a major compromise
on 'personal use' applications," says
Dennis DesRosiers, president of DesRosiers
Automotive Consultants Inc., based in Richmond Hill, Ontario.
According
to DesRosiers, in a recently released report, eco-AUTO has reversed
a prior, several-year downward trend in light truck sales since being
passed as part of Canada's national budget in March 2007.
Canadian
sales of light trucks - pickups and SUVs - have increased by 8.3%
for the first seven months of 2007 over the same period last year.
But the sales benefit for pickups becomes clear when
light trucks are broken out by segment. Compact and midsize pickup
sales are up 18%, while big SUV sales have declined by nearly the
same amount - 18.2%.
Mr. DesRosiers thinks the entire eco-AUTO program should be scrapped
in favor of an increase in Canada's fuel taxes to encourage conservation.
