oversight

Convincing the Public to Buy the More Fuel-Efficient Cars. An Urgent National Need

Published by the Government Accountability Office on 1977-08-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

REPORT                     TO THE CONGRESS                                .

BY THE COMPTROLLER   GENERAL
OF THE UNITED STATES
                                                     llllllllllllllllllllllllllllllllllll
                                                           LM103088




Convincing The Public To Buy
The More Fuel-Efficient Cars:
An Urgent National Need
Environmental  Protection Agency
Federal Energy Administration

This report describes what Federal agencies
responsible for the compilation      and distribu-
tion of gas mileage information        have been
doing.      Fuel economy    figures and mileage
guides prepared by these agencies have helped
some energy-conscious      consumers to select
fuel-efficient   cars. However, if more consu-
mers are made aware of these guides and how
to use them effectively,   automobile    fuel con-
sumption will be greatly reduced, and Ameri-
cans will save millions of barrels of petroleum
and millions of dollars annually.




CED-77-107
                                 /-) ,-?,.‘G AUGUST 10, 1977
                      a- - i7 ,n-I/
                          G -’ i /i i/ 2,
                  COMPTROLLER     GENERAL      OF      THE      UNITED   STATES
                                WASHINGTON.     D.C.         20548




B-166506


To the President of the Senate and the
Speaker of the House of Representatives
        This report describes    the efforts     of the Federal agencies
responsible     for the compilation   and distribution       of gas mile-
age information.       Fuel economy figures      and mileage guides pre-
pared by these agencies have helped some energy-conscious
consumers to select fuel-efficient         cars.    However, if more
consumers are made aware of these guides and how to use them
effectively,      automobile fuel consumption will be greatly         re-
duced, and Americans will       save millions     of barrels   of petro-
leum annually.
     We made our review pursuant to the Budget and Accounting
Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing   Act
of 1950 (31 U.S.C. 67).
       Copies of this r.eport are being sent to the Director,
Office    of Management and Budget; the Administrator,       Environ-
mental Protection     Agency; the Administrator,     Federal Energy Ad-
ministration:    interested   congressional   committees:   Members of
Congress: and other interested       parties.




                                              Comptroller  General
                                              of the United States
COMPTROLLER GENERAL'S                                CONVINCING THE PUBLIC TO BUY
REPORT TO THE CONGRESS                               THE MORE FUEL-EFFICIENT CARS:
                                                     AN URGENTNATIONAL NEED
                                                     Environmental Protection    Agency
                                                     Federal Energy Administration
                     DIGEST
                     ------
                     "How can the American public be convinced of
                     the need for changeover to more fuel-efficient
                     motor vehicles,  and be induced to accept the
                     types of automobiles  which will achieve desirable
                     fuel economy?"
                     This question was asked by a Federal Task Force I/
                     nearly a year ago.       The motor vehicle    is the
                     single largest      user of petroleum   in the United
                     States.     Petroleum savings are possible      by con-
                     vincing   the public to buy the more fuel-efficient
                     cars.   In attempting     to answer the question on the
                     basis of its own examination,        GAO asked, in turn,
                     four basic questions      and the answers provided are
                     given below in summary form.

                     Q.       WHAT IS THE POTENTIAL FOR REDUCING AUTOMOBILE
                              FUEL CONSUMPTION?
                     A.       Since the fuel efficiency          of vehicles    bought
                              today will     affect   the petroleum consumption
                              of Americans for the next 10 years, it is
                              important    that the Federal gas mileage guide
                              become as effective        as possible    in influenc-
                              ing consumers to buy the more fuel-efficient
                              cars.    Although the 1976 program was fairly
                              successful,     improvements are needed to con-
                              vince the public that the need to buy the
                              more fuel-efficient        types of cars has be-
                              come urgent.        (See p. 11.)     The mileage
                              guide is a pocket-sized         reference    booklet
                              containing    comparable information         by manu-
                              facturer    and car type.       The guide contains
                              information     on the engine size, number of


                    lJ"The Report by the Federal Task Force on
                        Motor Vehicle Goals Beyond 1980," Septem-
                        ber 2, 1976.



Tear    Sheet.      Upon    removal,    the report
cover    date    should    be noted    hereon.       i                       CED-77-107
     cylinders;       type of transmission       and fuel
     system;     interior    volume     (space),  and city,
     highway,      and combined     city/highway     average
     miles    per gallon     estimates.       The guide also
     contains      an estimate     of the annual     fuel   costs
     based on what a driver           would pay for fuel       in
     1 year if he drove 15,000 miles             and paid
     65 cents      a gallon    for gasoline.       (See p. 4.)

     The guide has two main printings              each year.
     One printing      is dated September        t,o report
     new fuel     economy figures     for models       intro-
     duced at this       time;   the other   is dated Jan-
     uary to add gas mileage         values    for new model
     types certified        since September.         (See pa 5
     for sample pages of the mileage            guide.)

     GAO found that     the new car buyer (1) does not
     always have gas mileage       information         available,
     (2) is often    not aware of the guide,             and (3)
     in many cases does not understand              the guide.
     Only 7 percent     of 1976 new car buyers            surveyed
     were aware of the guide.         Those aware of the
     guide experienced      a 20- to 25-percent           increase
     in gas mileage     when replacing      their      old cars,
     while  those not aware of the guide experi-
     enced only a . 7 percent      increase       in gas mile-
     age. (See pp. 9 and 23.)
     Most 1977 model cars were available            for sale
     in September     1976; however,      the consumer
     guide,   showing   comparable     mileage   estimates,
     was not available       in dealer    showrooms    until
     late   October   or early   November 1976. By then,
     an estimated     766,000   cars had been sold.          (See
     p. 18.)

Q.   IS THERE A NEED FOR A MORE EFFECTIVE’PUB-
     LIC INFORMATION PROGRAM?

A.   The Federal       Energy Administration’s            pro-
     motion     of gas mileage       information,     in the
     model year 1976 was not as effective                  as
     it should      and could have been.           Al though
     it is too early        to fully      evaluate    the
     effectiveness       of the 1977 program,           it has
     several     obvious    weaknesses.

     First,    the Agency          continued      to   rely on public
     service     television         advertising        and news



                              ii
     releases to encourage consumers to use the
     gas mileage labels and guides.   As a result,
     it has no control  over the size or makeup
     of its audience and the number of times the
     ads are shown or printed.
     Second, most of the Agency’s television
     promotion did not begin until   late December;
     therefore,  they missed a peak period in new
     car sales-- model introduction.
     A well-designed       advertising program under
     the direct    control    of the Agency--through
     the use of paid advertising--could         be more
     effeptive    in encouraging prospective       new car
     buyers to purchase the more fuel-efficient
     cars.
     While a Government agency could not hope to
     launch an advertising      campaign as comprehen-
     sive as that of the automobile companies,
     many of their    techniques   could be used on
     a smaller scale to reach more prospective
     new car buyers.      Paid advertising  could be
     tried on a pilot     basis before launching  a
     full-scale  advertising     campaign.  (See
     pa 16.)

Q.   IS THERE NEED FOR MORE TIMELY DISTRIBUTION
     OF GAS MILEAGE GUIDES?
A.   The Environmental    Protection     Agency as
     well as the Federal Energy Administration
     have not been taking full        advantage of
     opportunities    to encourage consumers to
     buy the more fuel-efficient        cars.     As
     previously    shown, the mileage     guide for
     1977 model cars was not available           in auto
     dealer showrooms until      about 2 months
     after   the cars were available.         Without
     the guide, the new car buyer lacked enough
     data to select the more fuel-efficient
     automobile.
     The timing of the printing        and distribution
     of the guide depended on the timing of the
     Environmental     Protection    Agency’s mileage
     testing.     Since printing     and distributing
     the guide takes about        2 months, the Agency’s
     cutoff   date for testing      has to be advanced
     if the guide is to be in the dealers’

                        iii
     showrooms when new cars are available           for
     sale.      Although there are some problems in
     advancing the cutoff        date for gas mileage
     testing,      solutions   are possible  if earlier
     distribution        of the guide is given priority.
     The Federal Energy Administration       also should
     consider other methods for making mileage data
     available    on a timely basis in car dealers'
     showrooms.     One alternative    could be to dis-
     tribute   mileage comparison charts to new car
     dealers at the time new cars are available
     for sale and urge dealers to display        the
     data for buyers' use.        (See pp. 21 and 22.)

Q.   ARE MILEAGE ESTIMATES RELIABLE AND CREDIBLE?
A.   Although there is not enough data to draw
     firm conclusions    concerning  the reliability
     of Federal gas mileage estimates,       indica-
     tions are that these estimates     are higher
     than what most consumers experience        in
     everyday driving,    because of the many
     ranges of variables    which are not control-
     lable in laboratory    testing.
     The Government's    estimates    show the relative
     performance between makes and models and pro-
     vide useful information       to consumers for com-
     paring gas mileages      of new cars.    However,
     consumers may not understand the nature of
     the estimates    and their    usefulness  in compar-
     ing the mileage efficiency        of new cars.
     It is necessary that consumers be better          ad-
     vised on how the estimates   and the mileage
     guide can be used in selecting     fuel-efficient
     automobiles  suited to their   individual      needs.
     (See p. 28.)
RECOMMENDATIONS
The Administrator   of the *Environmental       Protec-
tion Agency should:
--Work toward advancing the cutoff      dates for
   mileage guide testing    in order to make the
   mileage guides available    in dealers'   show-
   rooms when new models are introduced.
   (See p. 22.)




                           iv
The Administrator    of the Federal       Energy
Administration    should:
--Evaluate    the effectiveness  of the gas mile-
   age advertising    program for 1977 model cars.
--Design,     implement,   and evaluate    a timely paid
   advertising     campaign on a pilot     basis for its
   gas mileage information      program    for the 1978
   model cars.
--Undertake   other methods of displaying    gas
   mileage information   in dealers'  showrooms.
--Clearly    inform the public,    as part of its ad-
   vertising    campaign, how the mileage estimates
   can be used in selecting     the more fuel-
   efficient    cars.   (See pp. 16, 22, and 28.)
AGENCYAND OTHER COMMENTS
The Administrator        of the Environmental     Protec-
tion Agency stated that GAO's report was a
balanced and accurate         review of the Govern-
ment's efforts       to have new cars labeled with
fuel-economy      information     and to make copies
of the gas mileage guide available            to the
public.    The Administrator         said that although
the cutoff     dates for mileage guide testing
could not be accelerated          for the 1978 model
year, the Agency would continue to analyze
the feasibility        and advisability     of advancing
the deadlines       for future    model years.
With regard to the use of other methods, be-
sides the guide, of getting     the gas mileage
information  to the public at an earlier     date,
the Agency stated it is pursuing this alter-
native with the Federal Energy Administration
and the auto industry    in the hope of getting
such charts distributed     as early as the
1978 model year.     (See p. 22.)
The Administrator        of the Federal Energy Ad-
ministration       stated that an evaluation    of the
total    advertising     program had been started.
With regard to paid advert.ising,         the Federal
Energy Administration         stated that the Federal
Government could have future          difficulty       in
obtaining   free public advertising            from the com-
munications     industry  as a result.           Regarding
the effect    that paid advertising          would have
on future governmental       relations       with the com-
munications     industry,  it should be noted that
similar   paid advertising      programs have already
been used successfully       by other Federal agen-
cies with no harmful consequences to other
Federal agency public service programs.                  (See
p. 17.)
Generally,    the four major American automobile
manufacturers    agreed with GAO's recommendation
on the need for a more comprehensive,      paid ad-
vertising    campaign.  Their informative   com-
ments are included in their     entirety  as appen-
dixes.     These may be of value to the Congress.
(See pp. 17, and 37 to 80.)




                        . vi
                         Contents
                                                          Page

DIGEST                                                      i

CHAPTER
  1       INTRODUCTION
              Gas mileage testing
              Gas mileage labels
              Mileage guide
              Fuel economy standards
              Scope of review
  2       POTENTIAL FOR REDUCING AUTOMOBILE
            FUEL CUNSUMPTION                                8
              Greater consumer awareness can result
                in reduced fuel consumption                 9
              How fuel economy information  can help
                the consumer                                9
              Conclusions                                  11
   3      NEED FOR A MORE EFFECTIVE PUBLIC
            INFORMATION PROGRAM                            12
              Results of the 1976 and 1977 FEA promo-
                tional   efforts                           12
              Public service vs. paid advertising          13
              Lessons can be learned from auto
                manufacturers                              15
              Conclusions                                  16
              Recommendations                              16
              Agency and industry  comments and our
                evaluation                                 17

  4       NEED FOR MORE TIMELY DISTRIBUTION    OF GAS
            MILEAGE GUIDES                                 18
              Questions raised concerning   the ability
                to achieve more timely distribution
                of gas mileage guides                      18
              Conclusions                                  21
              Recommendations                              22
              Agency and industry  comments and
                our evaluation                             22

  5       CREDIBILITY OF MILEAGE ESTIMATES                 23
             Usefulness   of the EPA estimates             23
             Criticism  of the EPA estimates               24
             Are EPA estimates   representative of
                mileage that consumers can expect to
                obtain?                                    24
                                                                 Page
CHAPTER
               Why consumers may not match EPA
                 estimates                                        26
               Conclusions                                        28
               Recommendation                                     28
               Agency comments and our evaluation                 29

APPENDIX
       I   Letter  dated June 3, 1977, from John F.
             O'Leary Administrator,   Federal Energy
             Administration                                       30

   II      Letter  dated June 14, 1977, from Richard D.
             Redenius, Acting Assistant   Administrator
              for Planning and Management, Environmental
             Protection   Agency                                  35

 III       Letter  dated June 2, 1977,     from Stuart R.
             Perkins,   Director-Vehicle     Emission and Fuel
             Economy, American Motors      Corporation            37

   IV      Letter  dated June 7, 1977, from Charles M.
             Heinen, Director-Emissions/Fuel  Economy,
             Chrysler   Corporation                               48

       V   Letter   dated May 23, 1977, from D.A.    Jensen,
             Director    Automotive Emissions and
             Fuel Economy, Ford Motor Company                     74

  VI       Letter    dated June 2, 1977, from Robert F.
             Magill,     Vice President, General Motors
             Corporation                                          78

 VII       Principal   officials  of EPA and FEA respon-
              sible for administering   activities  dis-
              cussed in this report                               81


                            ABBREVIATIONS
EPA        Environmental  Protection   Agency
FEA        Federal Energy Administration
GAO        General Accounting Office
SAE        Society of Automotive Engineers
                               CHAPTER 1
                              INTRODUCTION
                              _---_--w-w
      One of the first     major Federal actions      to conserve
energy was the voluntary       automobile gas mileage testing
and labeling   program started      in 1973.    The Environmental
Protection   Agency (EPA) was put in charge of the program
and has published gas mileage data on new cars beginning
with model year 1973 from information          developed during its
automobile   emissions certification       program.     In model year
1974 manufacturers     voluntarily    labeled thier new cars with
the gas mileage estimates.
        The Motor Vehicle Information          and Cost Savings Act,
as amended, (15 U.S.C. 1901 et seq.) now requires                EPA to
determine      the gas mileage of new cars and to publish           the
results     in conjunction      with the Federal Energy Administra-
tion (FEA).        Under the Act, the Administrator         of EPA is
required     to prepare a simple,        understandable   guide or book-
let containing        comparative    data on the gas mileages of au-
tomobiles manufactured          each year.     Under the Act the Ad-
ministrator       of FEA is responsible      for publishing    and dis-
tributing      the booklet to auto dealers and consumers.
Further,     the Act requires       (1) automobile manufacturers       to
affix     a gas mileage label to their cars and (2) automobile
dealers to make the gas mileage guides available               to all
prospective       purchasers.      Beginning in 1978, automobile
manufacturers       must produce a fleet       of cars that meet min-
imum mandatory gas mileage standards.
GAS MILEAGE TESTING
---__l------
      Since the beginning of the voluntary      program, EPA has
conducted gas mileage testing    in conjunction     with its pro-
gram for emissions control.     During emissions tests,      which
are run on a dynamometer (see p. 2), EPA compares the
amount of gaseous emissions with the amount of gasoline
used by the automobile.     This data is used to measure both
emission levels and gas mileage.
GAS MILEAGE LABELS
----
      Beginning with the latter half of the 1976 model year
all new cars have been required   to display  a gas mileage
label (see p. 3 for examples of 1977 labels).     The label must
show the gas mileage of the particular    model car, the    esti-
mated annual fuel cost, and the range of the gas mileages
of comparable vehicles.
2
The following        are examples                   of the FEA/EPA                        gas mileage           labels for new 1977 vehicles.

           General           label :

                                                                                         MANUFACTURER’S         SUOQESTED           RETAIL PRICE LABEL
                                                                                                                                        .“#‘ad WRY.“, to lMI,l 4.w




                                                                                                                         -
                                        ISMILES      PER       CALLDN      FOR     CITY     DRIVING

                                        25MJLES      PER       GALLON      FOR     HIGHWAY      DRJV[NG

                                        20 MJLES     PER       GALLON     FOR COMBJNED           CJTY     AND   HIGHWAY      DRIVJN

                VEHICLE:                CENTURY/REGAL
                                        6   CYLINDER)          231   CUi3lC       INCH     DISPLACEMENT         ENGINE
                                        2 BARREL CARBURETOR
                                        AUTOFLATIC   TRANWISSJON,     2.73 AXLE RATIO
                                        CATALYST EQUIPPED,   4000 POUNDS TEST WEIGHT



                    THESE FUEL ECONOMY NUMBERS ARE FROM TESTS OF THIS VEHICLE
                    CONFIGURATION AND MAY NOT BE IN THE EPA/FEA BUYERS GUIDE.
            HE       RANGE        OF     COMBINED       CJTY     AND     HIGHWAY         FUEL   ECONOny      VALUES      FOR OTHER
                    MID-SIZE VEHICLES     IS               FROM 11 TO 20 MILES PER GALLON AS
                    OF SEPTEMBER 17, 1976.




            BASE0 ON $.65    PER GALLON,  lS.DDO                              MILES    DRIVEN     PER YEAR,    AND AN
            LVERAGE  COMBINED   FUEL ECONOMY OF                               20 MILES     PER    GALLON.   THE ESTIMATED
            ,NN”AL  FUEL COST   FOR THIS  VEHICLE                              IS   $488.

                These e.timetee        rre beed en tests   of vehicles    egulppcd with frequently      purchased optlonel   l quleeent.

                 Rainder:    The rclual fuel l conay of this           vehicle will rery dependleg an the type of drlvlng )ro” de,
                 your driving h&its.    bar well you ~lntern           ywr vehicle. optianel cqurprnt    inerellcd. end reed end
                 *u*ec    ccmiitims,
                To cmpr,re the fuel cconoy ef thl, vehicle xlth ether ,977 vehlcler l “d IQ learn lx- the test% were
                conducted. esk yew deeler fer e free copy of the LPA/fEA 1977 Gee nllrege Guide for Hew Cer Bwcrr.




                                                                              3
       The automobile manufacturer        can use either       of two basic
types of label.      The general label displays          gas mileage es-
timates for a model type.          A specific     label contains    the gas
mileage of a specific       vehicle   configuration,       and includes a
more detailed    description     of the engine, weight of the ve-
hicle,   axle ratio,    and the number of forward speeds of the
transmission.      If a manufacturer      chooses to use a specific
label,   it is also required       to apply specific       labels to all
automobiles    of the same model types,         i.e.,   all those auto-
mobiles that would have been covered by a single general
label.
MILEAGE GUIDE
       The mileage guide is a pocket-sized     reference  booklet
containing    comparable information    by manufacturer  and car
type (see p. 5 for sample pages of the mileage guide).          The
guide contains     information  on the engine size; number of
cylinders;    type of transmission    and fuel system; interior
volume (space);     and city,  highway, and combined city/highway
average miles per gallon estimates.        The guide also contains
an estimate    of the annual fuel costs based on what a driver
would pay for fuel in 1 year if he drove 15,000 miles and
paid 65 cents a gallon for gasoline.
      Two versions   of the guide are printed.     One version   is
for California    which has more stringent   emissions standards;
the other is for the remaining 49 States.        The guide has two
main printings    each year.  One printing    is dated September
to report new fuel economy figures      for domestic models in-
troduced at this time; the other is dated January to add gas
mileage values for new model types certified       since Septem-
ber.
SUBCOMPACT                                          CARS                                             SUBCOMPACT                                 CARS
                                                           L


                                                            b
                                                           ;
                                                           51
                                                           Y

PLYMOUTH
                                                           2    ,4/?                !4   MO6
 CRICKETl
 LANCERX                                                   2    ,417                24   1406

PONTIAC
 ASTRE                         140’0                       2    3ot10                    L346
                               14014                       2    soi10                    $406
                               15114                       2    30,10                    1325
                               151r4                       2    BOJlO                    1361
  FlREBlRO                     231,6                       2    66,?                     9513
                               231:6                       2    8617                     6488
                               30118                       2    86,?                     5542
                                                           2
                               301ll3
                               30516                       2
                                                                66,7
                                                                86l7
                                                                                         5513
                                                                                         $542       COMPACT CARS
                                                           4
                               350/6
                               400/8                       4
                                                                66,7
                                                                6617
                                                                                         1542
                                                                                         1650
                                                                                                    -YzqTyT                                            T
                               40018                       4    66,?                     5574                 E
  SUNBIRD                      15114                       2    ,9/7                     5325
                                                                                                            I G;
                               15114                       2    ,9/,                     $361
                                                                                                              zc
                               23116                       2    7917                     $464
                                                                                                         3     tg
                               23116                       2    ,917                     $464
                                                                                                         I”   ;“z
RENAULT
  12                           100/4’                      2    79/l,      2   33   26   $375       AMERICAN
                               ,oo,a*                      2    ?9ill      t   26   23   1424       MOTORS
                                                                                         $443         HORNET                     232/6                     I8     23         20    $488
  17                                                            7216       0   26   22
  17 GORDINI
                                100/4’
                               10014’
                                                           2
                                                           FI   7216       1   36   26   x375       ---I-                        232/6’                    I?     24         19    $513
                                                                                                                                 232f6                     I8     73         20    $466
  5                            ?9/4’                       2    74/10      5   41   30   $325
                                                                                                                                 25616                     I7     20         19    $513
SUBARU                                                                                                                           25616’                    I?     23         19    $513
  SUBARU                       9?/4’                                                32   $305                                    304/6                     14         I8     16    5609
                               9714’                                                26   $375
                                                          1:                                          PACER                      232/6                     18     23         20    5488
TOYOTA                                                                                                                           232f6’                    17     24         19    $513
                                13414’                M    2    ?2/6      21   35                                                23216                     18     23         20    $488
  CELICA
                                13,/4’                A    2     7216     22   29                                                25816                     1,     24         19    $513
                                ,114                  M    2     761 IO   36   49                                                25816’                    1,     23         19    $513
  COROLLA
                                97/a-                 M    2     76110    26   39                   AUDI
                               97,4’                  A    2     ?6!10    25   31                     1OOLS                      1,414’                    18     27         21    $464
  CORONA                        134/4‘                M    2     Boll0    21   35                                                ,,a/,.                    1,     23         19    $513
                                134/4’                A    2     Boll0    22   29
                                                                                                    BUICK
VOLKSWAGEN                                                                                            SKYLARK                    231,6                     16     26         19    $513
                                                                          23   33
  BEETLE                       I 97!4’                M    FI    68,7                                                            23lt6                     (8     25         20    $488
  DASHER                                              M    FI    84,15                                                       301!6                         17     23         19    $513
                                                      A    FI    84115
                                                                                                                             305/a                         16     21         18    $542
  DASHER         DIESEL                               M    FI    M/15
                                                                                                    CADILLAC
  ‘NOT       EOUIPPED       WITH         CATALYST                                                    SEVILLE                 350’8                         !4     19         16    $609
  #AVAILABLE            IN PUERTO          RICO                                                     CHEVROLET
                                                                                                     MONTE        CARLO      305e                      76         20         17    $574
                                                                                                                             35oa                      14       .I9        -1.6   ~ShoV

                                                                                                     ‘NOT      EQUIPPED   WITH       CATALYST




 72                                                                                                                                                                                  13




  The above are sample pages from the 1977 Gas ‘Mileage Guide for New Car Buyers, second
  edition, January 1977.




                                                                                                5
FUEL ECONOMYSTANDARDS
      The Act requires   that beginning with the 1978 model
cars, automobile manufacturers     must produce a fleet   of cars
that,   on an overall  basis, meet certain   minimum mileage
standar.ds shown below.
                                                 Average fuel
      Model year                               economy standard
                                         (in     miles   per   gallon)

        1978      '                                   18.0
        1979                                          19.0
        1980                                          20.0
        1981                                       a/22.0
        1982                                       a/24.0
        1983                                       a/26.0
        1984                                       $27.0
1985 and thereafter                                   27.5
a/Determined  by Secretary  of Transportation            and published
   in 42 Fed. Reg. 33534 (June 30, 1977).
      The gas mileage for an automobile       shall be measured and
a manufacturer's   average fleet    gas mileage calculated     in ac-
cordance with testing    procedures   established    by EPA for 1975
model year passenger automobiles       (weighted 55-percent    city
cycle and 45-percent    highway cycle),     or procedures which
yield comparable results.
        Auto manufactures      should be able to achieve the 1978
standards.       The estimated     overall fleet  average for the 1976
and 1977 model cars was 17.8 and 18.6 miles per gallon,
respectively.        However, auto manufacturers      stated that meet-
ing the 1985 standards of 27.5 miles per gallon will be dif-
ficult.      Recent gains in mileage are primarily         attributable
to reductions      in size and weight of the cars, and manufac-
turers    are doubtful     that major gains can be assured in future
years.      Even though many small cars get exceptionally            good
mileage,     a significant     percentage  of new car buyers still
want large automobiles         which generally   do not get as good mile-
age.
SCOPE OF REVIEW
        The major portion    of our review was conducted at EPA's
Motor Vehicle Emissions Laboratory          in Ann Arbor, Michigan.
We also performed work at the Washington,           D.C., headquarters
of the Environmental       Protection   Agency, Federal Energy Admin-
istration,     and the Department of Transportation.        We examined
pertinent     records,   documents, and reports     and held discussions
with responsible       agency officials   regarding   the computation,
publications,      and dissemination    of fuel economy information
to the public.
      We also had discussions   with representatives      of four
major automobile manufacturers,     several major oil companies,
and a social research organization.       We reviewed documents
and reports  provided by these organizations      pertaining    to
the fuel economy information    program.
       We also obtained comments on matters discussed      in this
report   from the Environmental    Protection  Agency, the Federal
Energy Administration,    Ford Motor Company, American Motors
Corporation,    Chrysler Corporation,    and General Motors Corpora-
tion.
       We are including    the comments of the automobile manu-
facuturers   in their   entirety  'as appendixes,  even though they
go beyond the scope of this report,        because we believe they
are very informative     to the Congress and may be of value in
future considerations      of the program.
                              CHAPTER 2
               POTENTIAL FOR REDUCING AUTOMOBILE
                         FUEL CONSUMPTION
      "How can the American public be convinced of the
      need for changeover to more fuel-efficient       motor
      vehicles,   and be induced to accept the types of
      automobiles   which will  achieve desirable    fuel
      economy? Without public acceptance and purchases,
      the most fuel-efficient    design is useless....      This
      issue looms as the major dilemma facing the Federal
      Government and industry."    I/
       According to the Federal Task Force on Motor Vehicle
Goals Beyond 1980, the petroleum        situation    is critical      in
both the long and the short term.          In the short term, the
Nation has become dependent on uncertain          petroleum      imports
to an undesirable    extent and is additionally          subject to the
large outflow    of dollars    from our economy.       In the long term,
a worldwide petroleum       shortage is projected      in the next 50
years.    This is especially      true with respect to domestic
production.
        In 1975, the United States consumed the equivalent        of
about 6 billion      barrels  of crude oil;   about 39 percent of
the oil consumed was imported.         The automobile   is the single
largest    user of petroleum,     consuming the equivalent    of about
1.8 billion     barrels   of crude oil in 1975.
      One way to reduce the need to import oil is by improv-
ing the gas mileage of cars.        Potential savings are contin-
gent on (1) successful      development of technology   to improve
the gas mileage of cars and (2) convincing        the public to
buy the more fuel-efficient       cars.
       The purpose of EPA/FEA's gas mileage information    program
is to encourage consumers to buy the more fuel-efficient       cars
by informing    them of the gas mileage of the various alterna-
tives.    A 1976 FEA study by Abt Associates,  Inc. showed that
the information    program for 1976 model cars had a positive


L/Draft   of "The Report by the Federal Task Force on Motor
   Vehicle Goals Beyond 1980," September 2, 1976.     The task
   force was established  by the Energy Resources Council be-
   cause of the Nation's  long-range  need to conserve energy.



                                  8
impact on reducing fuel consumption.          Petroleum savings
attributed    to the 1976 model year program were estimated         to
be about 900 million       gallons of gasoline,    or 21 million
barrels    of petroleum.     At 65 cents a gallon retail,      the es-
timated dollar      savings to consumers was about $585 million.
GREATERCONSUMERAWARENESSCAN RESULT
IN REDUCEDFUEL CONSUMPTION
      The FEA study concluded that the use of public educa-
tion can result   in reduced fuel consumption.      The study showed
1976 new car buyers who were aware of EPA/FEA gas mileage
labels and guides experienced     a 20- to 25-percent     increase in
gas mileage when replacing   their   old cars.   In   contrast,
buyers who were not aware of labels and guides experienced
only a .7-percent   increase in gas mileage.
       Although the 1976 fuel economy information           program was
fairly    successful,     the FEA study showed that many buyers were
not aware of the gas mileage information.              Of 1976 model car
buyers interviewed,         only 53 percent (422 of 796) remembered
seeing the labels and only 7 percent were aware of the gas
mileage guide.        In view of the relatively      low awareness and
use of the gas mileage information          in 1976, an improved pub-
lic information       program could play a major role in helping
to reduce fuel consumption in future          years.
        If more consumers can be persuaded to buy the more
fuel-efficient        cars, the Nation's       overall    fleet   avarage fuel
economy will       increase.       An analysis   by the Federal Task Force
on Motor Vehicle Goals Beyond 1980 showed that by increasing
fleet     gas mileage from 15 to 20 miles per gallon,                we can
save about 1.2 million            barrels  of oil a day, or 432 million
barrels      a year.    Studies show that automobiles            average about
8 to 10 years of useful life.              Therefore,     today's decision
to buy fuel-efficient           cars will have a lasting         effect    on
future     fuel consumption.          The sooner we can achieve major
gains in automobile          fleet    gas mileage,     the greater      the sav-
ings.
HOWFUEL ECONOMYINFORMATION
CAN HELP THE CONSUMER
       The gas mileage of small cars is generally       assumed to
be higher than large cars.      Accordingly,   it might be con-
cluded that consumers wanting good gas mileage should buy
a small car.     However, this isdeceiving,      because some
vehicles   in the mid-size   and large. car categories    get gas-
oline mileage equal to or greater       than some compacts or sub-
compacts.    Two primary factors    affecting  gas mileage are



                                       9
size/weight of the car and size of the engine.       For instance,
a small subcompact Chevrolet    Camaro with a large 350 cubic
inch engine gets only 14 miles per gallon in the city,        while
a large Oldsmobile Delta 88 with a small      260 cubic inch
engine gets 17 miles   per gallon in the city--an     improvement
of 3 miles per gallon.    The following   table shows additional
examples of large cars which get mileage      equal to or greater
than some smaller cars.
                               Engine
                               size/
  1977                      cylinders             Miles per gallon
model car       Category    (note a)       City       Highway Combined
Chevrolet
Camaro         Subcompact      350/8        14         18          15

Ford
Mustang       Subcompact      302/8         16         21          18

Chevrolet
Nova           Compact        350/8         14         18          15

Oldsmobile
Omega         Compact         305/8         16         22          19
Oldsmobile
Cutlass       Mid-size        260,'8        17         26          20

Dodge
Monaco        Mid-size        225/6         17         22          19

Buick
LeSabre       Large           231/6         17         25          20

Oldsmobile
Delta 88      Large           260/8         17         23          19
a/Engine size refers    to the cubic    inch displacement    or
  overall  size of the cylinders.       The greater   the inches
   the more powerful  the engine.
      Buying a subcompact will    not guarantee good mileage.
For example, combined EPA mileage     estimates    in the sub-
compact category can range from 15 to 41 miles per gallon.
Assuming a person drives 15,000 miles in 1 year, the dif-
ference in gas consumed by two vehicles       in the subcom-
pact category could be 634 gallons of gasoline.          At 65 cents
a gallon,   the difference in cost to a consumer would be $412
a year.


                                10
     CONCLUSIONS
            Since the fuel efficiency        of vehicles bought today will
     affect    our petroleum consumption for the next 10 years, it
     is important     that EPA/FEA's gas mileage information       program
     be as effective       as possible    in influencing consumers to buy
     the more fuel-efficient        cars.    Although the 1976 program was
     fairly    successful,    improvements are needed to convince the
     public of the urgent need to buy the more fuel-efficient
     cars.
r.




                                      11
                             CHAPTER 3

                    NEED FOR A MORE EFFECTIVE
                   PUBLIC INFORMATION PROGRAM
       FEA needs to develop a more compreshensive       and
aggressive   program to inform the public of the need to con-
serve gas through the purchase of the more fuel-efficient
automobiles.     FEA's promotion   of gas mileage information
for 1976 and 1977 model year automobiles       was not as effec-
tive as it could have been, because it relied         solely on
free public service advertising      which minimized FEA's direc-
tion and control     over the program.    While public service
advertising    is good and should be encouraged,      FEA may not
be reaching many prospective      new car buyers through the
program.
        In contrast,   organizations     who pay for advertising    can
design programs directed         (1) at large,  general audiences or
(2) at specific      audiences demographically      suited to their
objective.      They can also control      the number of times the
ads (television,      radio,   or printed   media) are shown and
effectively     evaluate the response.
       We believe   improvements are needed in FEA’s program
to encourage new car buyers to use gas mileage data when
purchasing    a new car.     FEA should evaluate the effective-
ness of its advertising       program for 1977 model cars and con-
sider,   on a pilot    basis, alternative     approaches,   such as
a positive    paid advertising     campaign designed to reach a
maximum number of prospective        new car buyers.      FEA should
evaluate   the effectiveness      of the pilot    program before em-
barking on a nationwide       campaign.
RESULTS OF THE 1976 AND 1977
FEA PROMOTIONAL EFFORTS

      FEA's promotion   program for 1976 gas mileage informa-
tion was not as effective     as it could have been. Although
manufacturers   have cooperated with EPA's voluntary   labeling
program, the FEA study showed that only 53 percent of the
1976 new car buyers remembered seeing the label.
       The gas mileage guide was even less effective.        The FEA
study showed that only 7 percent of the new car buyers inter-
viewed were even aware of the existence        of the gas mileage
guide.    Promotion of the gas mileage guide was done through
public service    television advertising    informing  the public
that the guides were available      upon request.


                                  12
       For model year 1976, FEA printed         500,000 California
guides and 2,500,OOO guides for the other 49 states.                FEA
did not keep accurate        records regarding    distribution     of
the guides and could only estimate          that about 250,000
copies of each guide were still          on hand.    Most of the guides
were bulk distributed       by FEA, however, single copies could
be requested from the Government Printing            Office    Document
Distribution      Center in Pueblo, Colorado.        The Center dis-
tributed     55,850 California     guides and 263,400 guides for
the other 49 states.        FEA did not know how many guides
eventually     reached the hands of consumers.
      Steps have been taken to make 1977 buyers more aware
of the fuel economy information.      For example, EPCA requires
that gas mileage labels be affixed     to all cars sold in
the United States.    The Act also requires     that gas mile-
age guides be available   in dealers'    showrooms.      Furthermore,
EPA issued news releases on the gas mileage figures           to the
media and FEA prepared some public service        television     adver-
tisements   regarding the guide and label which were distri-
buted to the media in late December 1976.
      Although it is still   uncertain how effective    FEA will
be in promoting 1977 model year gas mileage      information,
several weaknesses are apparent in the program.        Further-
more, FEA told us that no evaluation     is planned for the
1977 model year similar    to the Abt study for 1976.
      First,   FEA was not timely    in promoting   their    1977
gas mileage information.        The mileage guide for 1977 model
cars was not available       in auto dealer showrooms until        about
2 months after     the cars were available     for sale and an
estimated    766,000 new cars had been sold.       This subject      i.::
discussed in more detail       in chapter 4. Not until       late
December, almost      4 months after   new models were for sale,
did FEA release to the media the public service           television
ads promoting     the label and guide.     During this period
1.9 million    new cars were purchased by consumers.
     FEA also continued          to rely   on public service   advertis-
ing which minimized its          control   over the program.
PUBLIC SERVICE VS. PAID ADVERTISING
Public   service   advertising
       FEA relies   on public service advertising        to publicize
gas mileage information        on the guide and label through tele-
vision   and printed    media advertising.     While this technique
is relatively     inexpensive,    it has inherent   limitations.


                                      13
For instance,    according   to an FEA official,     who is responsible
for advertising    and promotion,     a public service campaign
usually gets limited      exposure.    Such a campaign is in competi-
tion with other public service material          from Federal,  State,
and local groups for a limited        amount of free time.     Also,
since the majority     of advertising    is paid for,   it is not
likely  that public service announcements would be run during
prime time.     Sponsors who pay for time on radio and televi-
sion demand maximum exposure for their dollar,          and public
service   announcements are relegated       to the less desirable,
"whatever   is available"    time.
       Another inherent      problem with public service announce-
ments, according to the FEA official,          is that they usually
obtain greater      exposure on the smaller,      less popular stations.
The larger    stations   with the larger     audiences are the prime
targets   of the sponsors who have money to buy time.          Popular
stations    have little    free time to fill    with public service
advertisements.
       The printed     media generally   use public service    ads as
filler    materials    to complete a page or take the place of some
paid advertising       that was canceled at the last minute.       For
this and other reasons,       the FEA official     stated that a public
service campaign directed        through the printed     media is very
unreliable,      in terms of attempting    to affect    large or specific
audiences.
Paid advertising
       The primary advantage of paid advertising     is that
specific   time    and space can be obtained.  The advertiser  can
assure his exposure in any media and direct      his message to
a specific     target  audience.
      An added benefit     is that the advertiser   can release
his message in an effective,       reinforcing  manner.   The adver-
tiser  can select the optimum times to saturate        the market and
build on a theme.      Effective   advertising  can make a product
or service known quickly.
        A final    advantage of paid advertising      is that it lends
itself    to evaluation.      The advertiser    can target    his au-
diences,     control   and guarantee the exposure of his message,
and thereby determine the effectiveness           of his approach.
There appear to be no legal constraints           on using paid ad-
vertising      to promote the gas mileage information         program.
When an appropriation        is available    for a particular     object
or purpose,      it is also available     to pay expenses which



                                  14
are necessary for proper execution          of that objective.
Section 381 of the Energy Policy and Conservation             Act (42
U.S.C. 6361) requires        FEA to establish    and carry out a respon-
sible public education program to encourage energy conserva-
tion.     Thus, if FEA believes     paid advertising     is necessary
for an effective       energy conservation    program, then the appro-
priations    available'   to FEA for carrying     out the purpose of
the program would be available        for paid advertising.
LESSONSCAN BE LEARNED FROM
AUTO MANUFACTURERS
       Since both FEA and the automobile manufacturers            try to
influence   the same market--prospective      new car buyers--FEA
could improve its program by using some of the promotion
methods used by the automobile      companies.     Officials      of two
major auto companies told us that their        advertising      is geared
to get people into the showrooms.        They try to appeal to
their needs and desires.      FEA's objective    is similar       in that
prospective    buyers must be made aware that the gas mileage
information    is available.   Once the prospective        buyer has
the information     it can be used to sell him on the advantages
of buying a fuel-efficient     car.
       Manufacturers    we interviewed       mentioned several    important
elements of their      advertising     which are missing from the
FEA public service advertising           campaign.    These include (1)
use of prime time advertising          to gain exposure to large au-
diences,    (2) selection     of electronic     media time slots and
printed   media that appeal to the prospective           new car market,
(3) continuous     advertising     to keep the product     in the public
eye, (4) timing the advertising           with peak sales periods,      and
(5) pretest    of promotional      themes.
      Representatives     from two major auto companies told us
that they make extensive      use of television   advertising      because
it gives maximum exposure for the dollar.         One manufacturer
spends about 50 percent of its advertising        budget for televi-
sion.   Prime time television     advertising   is used to get broad
coverage or ads may be run during specific        shows having
viewers which include a good percentage of prospective             buyers.
The manufacturers     also consider  it very important      to show
the ads throughout     the year to keep their    products     in the
public eye.
        The timing of an advertising     campaign is also impor-
tant.     One manufacturer    told us that about 65 percent of its
advertising     budget is spent during fall     and spring campaigns--
the two peak periods for new automobile         sales.   The fall ad-
vertising     period is of particular    importance because it is
the consumers' first       exposure to the new models.


                                   15
      The manufacturers  told us they pretest    almost all of the
promotional  themes before they are given broad exposure.      If
themes are not appealing during pretest,     other approaches
are tried.
CONCLUSIONS
      FEA'S promotion of model year 1976 gas mileage informa-
tion was not as effective    as it could have been.    FEA had
no plans to evaluate the 1977 program.      Although it is too
early to fully  evaluate  the effectiveness    of the 1977 pro-
gram, it has several obvious weaknesses.
       First,   FEA continued  to rely on public service tele-
vision advertising      and news releases to encourage consumers
to use the labels and guides.        As a result,     FEA has no con-
trol over the size or makeup of its audience and the number
of times the ads are shown or printed.          Second, most of FEA's
television    promotion did not begin until       late December;
therefore,    they missed a peak period in new car sales--model
introduction.
       A well-designed    advertising program under the direct
control   of FEA-- through the use of paid advertising--could
be more effective      in encouraging prospective new car buyers
to purchase the more fuel-efficient       cars.
      While a Government agency such as FEA could not hope
to launch an advertising     campaign as comprehensive as that
of the automobile   companies, many of their       techniques     could
be used on a smaller scale to reach more prospective           new
car buyers.   Paid advertising     could be tried,     on a pilot
basis, before launching    a full-scale   advertising      campaign.
RECOMMENDATIONS
      We recommend that     the Administrator     of FEA:
      --Evaluate     the effectiveness   of its gas mileage adver-
         tising   program for 1977 model cars through the use of
         consumer surveys similar      to the one used for the 1976
         program.
      --Design,     implement, and evaluate a timely paid ad-
         vertising    campaign, on a pilot   basis, for the 1978
         model cars.      The advertising  should be directed   to
         large audiences which include considerable        numbers of
         prospective     new car buyers.




                                   16
AGENCYAND INDUSTRY COMMENTS
AND OUR EVALUATION
        In commenting on our report       (see app. I), FEA stated
that an evaluation     of the total    advertising       program had been
initiated,    and that a separate assessment of the use of all
media in promoting the program,         including     television     and
radio '%pOtS,11   will   be prepared.      With   regard    to  paid  advertis-
ing, FEA stated that the recommendation could cause the Fed-
eral Government to have future        difficulty      in obtaining     free
public advertising     from the communications          industry    and that
it could raise other problems.
      The   four major domestic auto makers agreed there was a
need for    a comprehensive paid advertising    campaign to con-
vince the     public through the use of the mileage     guide to
purchase    the more fuel-efficient  new cars.      (See apps. III to
VI.)
        We believe that the actions   initiated     by FEA show a
positive    effort  to improve the program.       Regarding the ef-
fect that paid advertising     would have on future       governmental
relations    with the communications    industry,    similar   paid ad-
vertising    programs have been used in the past by other Fed-
eral agencies with success and with no harmful consequences
to other Federal agency public service programs.             Further-
more, FEA has in the past initiated        requests    for funding
from the Congress for just such a program.




                                      17
                              CHAPTER 4
              NEED FOR MORETIMELY DISTRIBUTION OF
                         GAS MILEAGE GUIDES
        The mileage guide for 1977 model cars was not available
in auto     dealers' showrooms until   about 2 months after most
cars were available.       Each new car sold had a label which
showed the specific     mileage data for the car itself    and the
mileage range for other cars in the same size.classification.
However, without     the guide, the new car buyer could not
readily     identify the specific   make or mileages of other cars
within    the class range.    During this 2-month period,   about
766,000 new 1977 model cars were sold.
      The printing    and distribution    of the guide depend on
when the results     of EPA's mileage testing     are available.      For
the 1977 model cars, a manufacturer        could have its cars
tested as late as September 3, about the same time that many
new model cars are already available        for sale.     If the print-
ing and distributing     of the guide continues      to take about 2
months, EPA's cutoff     date for testing    would have to be ad-
vanced, if the guide is to be in the dealers'          showrooms when
new cars are available      for sale.
       Although EPA raised a number of problems in advancing the
cutoff    date for mileage testing,        we believe the problems can
be dealt with,      and EPA should work toward advancing the date
in the interest      of more timely distribution        of the guide.    We
also believe FEA should consider other methods for making
mileage data available          on a timely basis in car dealers'
showrooms.       One possibility     would be to distribute     mileage
comparison charts to new car dealers at the time new cars are
available     for sale and urge dealers to display          the data for
buyers'    use, at least until       the mileage guides become avail-
able.     Such a chart,     in the form of a news release,       had
been published      by EPA in September 1976--the        same month
1977 model cars first         became available.
QUESTIONS RAISED CONCERNINGTHE
ABILITY TO ACHIEVE MORE TIMELY
DISTRIBUTION OF GAS MILEAGE GUIDES
       In a letter    dated August 13, 1976, we informed the Ad-
ministrators     of EPA and FEA that because of the apparent
lack of emphasis on the timely distribution       of the 1977 gas
mileage guide, the guides would not be available        in dealers'
showrooms until     late October at the earliest.     We asked both
agencies to comment on the distribution       schedule and to



                                  18
advise us of any plans to expedite    the distribution   of the
mileage guide.   We also discussed with respresentatives      of
four major automobile manufacturers     the feasibility  of ad-
vancing the gas mileage testing   cutoff   date as a way of
getting the guide in car dealers'    showrooms earlier.
       The responses from the agencies and auto manufacturers
were generally      negative.      EPA and FEA said that action was
being taken to expedite         the printing     and distribution    after
the estimates      were computed by EPA; however, very little
could be done to expedite the testing             and computation    of the
figures.     Major improvements in the timeliness             of the guide
depends on earlier       cutoff   dates for computing the estimates
that go into the guide.          The agencies and the auto manufac-
turers   believed that earlier         cutoff  dates for testing     would
decrease the number of models appearing              in the guide, dis-
rupt testing     scheduies,     and jeopardize     the accuracy of the
estimates.      The following      sections   present a discussion      of
specific    objections     raised and our comments concerning         these
objections.
Number of cars     listed   in the guide
        For model year 1977 automobiles,       EPA accepted manufac-
turers'    test results  for computing mileage guide estimates
until    September 3, 1976.   EPA-sent the final       figures     to FEA
for publication     on September 17, 1976.       EPA stated that most
of the data used in computing gas mileage estimates              is a
product of new car emissions certification,           and little     can
be done to make fuel economy data available           at an earlier
date.     FEA stated that an earlier    cutoff    date would mean
that fewer models would be listed       in the guide and that the
public would only have limited       gas mileage information.
      Although an earlier    cutoff  date might result      in fewer
models being shown in the guide, our analysis          of the 1977
fuel economy program showed that 85 percent of the tests
used to compute 1977 mileage estimates        were completed by
July 31, 1976.    If 1977 testing     for mileage guide entries
had been cutoff   at July 31, 1976, there would have been
enough data to compute estimates        for 94.6 percent    (440 of
465) of the models listed     in the 49-State guide.       A similar
analysis   of the California    guide showed there was enough
data to compute estimates     for 89.7 percent (261 of 291) of
the models listed    in the 1977 California     guide.
      We believe    the advantages of having a mileage guide
available  early    in September outweigh the disadvantages  of




                                    19
having a few less car models in the mileage guide.
Furthermore,    if both EPA and automobile manufacturers
are given an earlier    cutoff date, it is conceivable   that
testing   schedules could be reorganized   so that more cars
would be tested by July 31.
Testing schedules and
credrbllltv of the estimates
       Automobile manufacturers      expressed concern that if mile-
age guide cutoff      dates were advanced, it would be difficult
to complete testing.       They said under present conditions         it
is difficult     to schedule testing     at EPA's emissions labora-
tory because of the tight      schedules.     One manufacturer's
policy    is to assure that its cars meet emissions certifica-
tion standards before trying       to maximize gas mileage.       The
company believes      the gas mileage of its vehicles     will   suffer
if the testing     time is cut short.
       Manufacturers    and EPA also said earlier         cutoff    dates
would jeopardize     the credibility      of the estimates       because
there would be fewer tests available            for computing the es-
timates.    Our analysis      showed that the four domestic manu-
facturers   had 100 percent,       97 percent,     82 percent,    and
67 percent of their      testing    done by July 31. Foreign manu-
facturers   also had a considerable        portion    of their    testing
done by July 31. Four of nine foreign              manufacturers     had
100 percent of their       testing   complete by July 31--two
were over go-percent       complete,   two were over 80-percent
complete,   and was only 59-percent        complete.
        Our analysis   also showed that if tests completed after
July 31 had not been used in the computations,            changes
would have occurred       in one of the city,     highway, or com-
bined ratings      for only 15 percent (72 of 465) of the models
in the 49-State guide and 4 percent (12 of 291) of the cars
in the California      guide.   Eighty-one    percent of the changes
were 1 mile per gallon differences,         10 percent were 2 miles
per gallon differences,       6 percent were 3 miles per gallon
differences,     and 2 percent were 4 miles per gallon dif-
ferences.
Use of the guide     by early   buyers
        FEA stated  that many of the early purchases are made
by    customers who buy only by nameplate and frequently     with-
out    even seeing the vehicle.    This implies that early buyers
are    not concerned about gas mileage.    However, 56 percent of
the    1976 model car buyers interviewed   for the FEA study



                                    20
considered gas mileage very important     and 21 percent
responded that gas mileage was one of their     reasons         for
deciding on the model bought.     Since the sample was          drawn
from new car registrations   early in the model year,           Septem-
ber, October,  and November of 1975, we believe early            buyers
are concerned about gas mileage and it is important             that
they have access to th&,mileage    guide.
        Another factor     that should be considered       is that ad-
vertising     is intensified    when the new models are available.
Although many consumers decide to buy later             in the year,
shopping often begins early.          Marketing    research   has shown
that 70 percent of new car buyers pick up brochures at show-
rooms before making their decision.            EPA and FEA are not
taking full     advantage of opportunities       to influence     consumers
because mileage guides are not available            along with other
brochures when the new models are introduced.
Accuracy   of the estimates
      EPA emphasized    that it must have enough review time to
assure the accuracy     of the estimates published  in the guide.
      We agree that the accuracy of the estimates      is very
important,   and EPA should continue to make the necessary
review to assure accuracy.       However, if testing  can be com-
pleted sooner, EPA will    still   have enough time  to review
the mileage figures   before forwarding     them to FEA for print-
ing and distribution   of the guide.
CONCLUSIONS
        EPA and FEA have not been taking full        advantage of op-
portunities      to encourage consumers to buy the more fuel-
efficient      cars because the mileage guide for 1977 model cars
was not available         in auto dealers'  showrooms until   about 2
months after       the cars were available.     Without the guide
the new car buyer lacked enough data to select the more
fuel-efficient        automobile.
       The timing of the printing        and distribution     of the guide
depended on the timing of the EPA mileage testing.                Since
printing   and distributing       the guide takes about 2 months,
EPA's cutoff    date for testing      would have to be advanced if
the guide is to be in the dealers'            showrooms when new cars
are available    for sale.      Although there are some problems
in advancing the cutoff       date for gas mileage testing,         solu-
tions are possible       if earlier   distribution      of the guide is
given priority.




                                    21
      We believe FEA also should consider other methods for
making mileage data available      on a timely batsis in car
dealers'   showrooms.  One alternative     could be to distri-
bute mileage comparison charts to new car dealers at the
time new cars are available     for sale and urge dealers
to display   the data for buyers' use.
RECOMMENDATIONS
      We recommend that the Administrator      of EPA work toward
advancing cutoff   dates for mileage guide testing       in order to
make the guides available    in dealers'    showrooms when new
models are introduced.     In addition,   the Administrator     of
FEA should undertake other methods of displaying        gas mileage
information   in dealers'  showrooms.
AGENCYAND INDUSTRY COMMENTSAND OUR EVALUATION
        In commenting on our report   (see app. II),  EPA stated
that they found it to be a balanced and accurate       review and
critique    of their  efforts  to have new cars labeled with fuel
economy information      and to make available to the public
copies of the Gas Mileage Guide.
        With regard to advancing the cutoff               dates for mileage
guide testing,        EPA stated that it is already too late to ac-
celerate     1978 model testing         but that they will continue        to
analyze the feasibility           and advisability        of advancing the
testing     deadlines    for future model years.            Also by letter
to FEA dated June 20, 1977, EPA emphasized its plan to con-
sider such an earlier          cutoff    date for its mileage tests.          FEA
commented that an earlier            cutoff    date would be acceptable
to FEA, and that it would continue to insure the fastest
possible     printing    and distribution        of the guide.      The four
major domestic automakers expressed some difficulty                   in
meeting an accelerated          cutoff     date on the mileage testing
of all models under production,              particularly      for 1978 model
cars.      (See apps.      III  to VI.)
       With regard to the use of other methods, besides the
guide, of getting      the gas mileage information     to the public
at an earlier     date, EPA stated that it is investigating      the
possibility    of distributing     charts containing   fuel economy
information    for display     in dealers'  showrooms until  the
guides are available.         EPA states that it is pursuing this
alternative    with FEA and the auto industry,       in the hope
of getting    such charts distributed      as early as the 1978
model year.




                                      22
                                  CHAPTER 5
                  CREDIBILITY OF MILEAGE ESTIMATES
       Most drivers   will   not experience   EPA's estimated
mileage figures,     but they are reliable     for comparing mileage
rates of different     model cars.     EPA's tests are conducted in
a controlled    and scientific    environment    and cannot readily
account for the ranges of some important          variables  affecting
fuel economy, such as road and weather conditions           and
individual   driving   habits.
       Several independent studies have been done which indi-
cate that EPA mileage ratings       are higher than consumers ex-
perience in everyday driving.        The studies are not comprehen-
sive enough to definitely     conclude that EPA mileage ratings
are inflated;    however, they do indicate      that consumers are
likely   to experience mileage which is lower than estimated
by EPA. This could be having adverse effects          on consumers'
confidence    in the EPA estimates.
       There are valid reasons why many consumers will               not
match EPA estimates.         EPA mileage ratings        are estimates     and
are not intended to predict           the actual mileage drivers         will
obtain.       However, the FEA survey of 1976 new car buyers in-
dicates     that many consumers do not understand the intent                and
usefulness      of the estimates      in making a buying decision.            Be-
cause this could reflect          unfavorably     on the credibility      of
the mileage estimates,          we believe FEA should clearly         in-
form the public,       as  part   of  its  advertising     campaign,   how
the EPA estimates        can best be used in selecting         the more
fuel-efficient       automobiles.
USEFULNESSOF THE EPA ESTIMATES
       The EPA estimates   can be used by consumers who are
comparison shopping for a fuel-efficient      car.   In interview-
ing auto manufacturers,     Government agencies,   and independent
organizations,     the consensus was that consumers could ex-
pect to obtain better     gas mileage from those vehicles     with
better   EPA ratings.
     A General Motors survey showed good relative    correla-
tion between EPA estimates   and consumer experienced mileage.
For example, the study showed that consumers who owned cars
with higher EPA ratings   experienced better mileage than
those who owned cars with lower EPA ratings.
      EPA acknowledges that many consumers              will  not match its
mileage estimates.    The gas mileage guide             states that the



                                      23
mileage ratings  are estimates     and consumers may not get the
listed  mileage because of where and how they drive and dis-
cusses various factors   affecting    gas mileage.   For example,
the guide states that with an 18 mile per hour headwind,
about a 10 percent   (2 miles per gallon)     loss in gas mileage
will occur.
      Even with EPA's explanations      in the guide, there is still
uncertainty   concerning credibility     of the estimates  and how
consumers perceive     them, as discussed below.
CRITICISM OF THE EPA ESTIMATES
        When EPA began publishing     mileage ratings   for 1973 model
cars, the program received considerable         public support.      The
automobile    industry,  however, was critical      of EPA's testing
procedures    because the mileage ratings      only represented    city
driving    and did not reflect    highway driving.
        Responding to the criticism,      EPA developed a highway
cycle for the 1975 model cars which reflected           long distance
driving    on nonurban roads and on interstate       highways at
speeds averaging about 48 miles per hour with no stops.
Manufacturers       began emphasizing the highway mileages in
their    advertising    because the mileage rates were considerably
higher than the urban ratings.         Consumers then complained
that the highway estimates        were higher than actual mileages
being experienced.
        In model year 1976, EPA made another change by com-
puting a combined city/highway    estimate   based on 55 percent
city and 45 percent highway driving.       This estimate is com-
puted by averaging the results    of city and highway test
cycles.
       There is less criticism;    however, indications       of a
credibility    gap remain.    The FEA survey of 1976 new-car
buyers showed that 64 percent of the buyers who were aware
of the labels did not believe the estimates.          Fifty-two    per-
cent who were aware of the gas mileage guide also did not
believe the EPA estimates.       The reason given most frequently
for not believing    the label was that the estimates         were too
high.
ARE EPA ESTIMATES REPRESENTATIVE
OF MILEAGE THAT CONSUMERSCAN EXPECTc
TO OBTAIN?
      Although several studies   indicate EPA's combined mileage
estimates   were generally higher than consumers experience   in


                                  24
everyday driving,      they were not comprehensive enough to con-
clude that EPA estimates        were inflated.     In fact,   one study
showed a good correlation        between EPA combined city/highway
estimates   and experienced mileage.          Most studies showed,
however, that consumers' average experienced            mileage in
everyday driving      relates   more closely    to EPA's city esti-
mates.    The results     of these studies     are presented below.
General     Motors   post   card   surveys
       General Motors Corporation     conducted several surveys
to determine the gas mileage experienced        by owners of 1975
General Motors cars.       The surveys were divided   into three
parts:    (1) a winter   survey of 4,491 customers,     (2) a
spring-summer    low mileage survey of 3,868 customers,       and
(3) a spring-summer     high mileage survey of 4,178 customers.
A total   of 12,537 post cards were mailed and 2,600 valid
responses were received.
       The survey showed that General Motors customers
reported gas mileages 11 percent lower than EPA's combined
55 city/45   highway split.   More specifically, the survey
showed General Motors customers were experiencing    mileages
about
         --1.6 miles     per gallon   less    than    the EPA combined     55/45
            estimated,
         --0.4 miles     per gallon   more than       the EPA city   rating,
            and
         --4.9 miles     per gallon   lower    than    the EPA highway
            estimate.


       In an attempt to project   fuel consumption in future
years, DuPont analyzed EPA mileage estimates.         DuPont's
analysis   showed gas mileages achieved by owners of 1974 and
1975 models was lower than predicted       by EPA composite values.
Motorists'    mileage was closer to the EPA city gas mileage
estimates    than the composite estimates.     DuPont ultimately
used EPA's city mileage estimates      to predict  future gasoline
consumption.
Shell     of Canada study
         A comparison of EPA combined estimates   with mileage ob-
tained     by Shell employees on twenty-three   1975 vehicles  in



                                       25
normal driving     indicated  a good correlation   between estimates
and actual experience.       The study concluded that the gas
mileage of most cars improves with accumulated mileage.          For
the 23 cars tested the average mileage on the road was only
0.1 percent    below the average    of EPA ratings  for the same
models.
Other    studies
        In addition   to studies  comparing EPA estimates   with
mileages experienced      by consumers, other stud"ies have been
done which indicate      EPA estimates   may be somewhat high.
For example, an EPA six-car       study of 1975 models showed that
vehicles    running the highway cycle on a test track got 5 per-
cent lower mileage than they received on a dynamometer.          EPA
attributed     this to the rough surface of the test track.
      At EPA's request, a Society of Automotive  Engineers
(SAE) committee was formed to develop road testing    fuel
economy measurement procedures.   A comparison of mileage
rates derived from SAE's test procedures with EPA mileages
showed that EPA rates were much higher than the figures
derived from SAE road tests.
WHY CONSUMERSMAY NOT MATCH EPA ESTIMATES
        EPA acknowledges that many drivers         will not match its
estimates    because the tests are conducted in a controlled
and scientific      environment     and many ranges of variables          can-
not be readily      accounted for without      destroying      the compar-
ability    of the estimates.        Some of the more important         vari-
ables are (1) travel        and trip characteristics;         (2) individ-
ual driving     habits;    (3) weather,   road conditions,        and
vehicle maintenance;        and (4) vehicle    characteristics        and
options.     An explanation     of the impact of these variables
on gas mileage estimates        follows.
Trip    characteristics    and driving     habits
        The type of driving    people do greatly     affects    their gas
mileage.      Assuming other variables      are equal, drivers      who do
a lot of city driving,       characterized     by short stop-and-go
trips,    are likely   to get less mileage than people whose
driving    is characterized    by longer trips     on the highway.
Maximum mileage is generally         achieved when driving      at speeds
which average between 30 to 40 miles per hour.               As average
speed exceeds 40 miles per hour, the mileage will go down.




                                    26
        Individual   driving habits also have a major impact
on gas mileage.       It is also one of the most difficult
factors     to account for in a gas mileage test procedure.
        Tests conducted by the Automobile Club of Michigan
showed that cars could experience             as much as a 44-percent
loss in gas mileage when operated by a poor driver                    as com-
pared to a good driver.           To determine the effects          of bad
driving     habits,    the test driver      made jack rabbit       starts,
rapid stops, and weaved in and out of traffic.                   The Club also
ran the tests using good driving             techniques     including      smooth
acceleration,       travel    at an even rate of speed, and using brakes
only for routine         stops.   Traveling     in mid-afternoon        traffic,
the test car got 14.36 miles per gallon using good driving
habits and 8.11 miles per gallon with bad habits.
Weather. road conditions.
and vehicle maintenance
       EPA tests are run under ideal conditions.             Vehicles are
tested in temperatures      ranging from 68 to 86 degrees, the
dynamometer assumes smooth level roads, and test vehicles                are
in a good state of maintenance.           In real driving,    motorists
experience various      temperatures,       road conditions,    and degrees
of vehicle maintenance.        The   following    chart   shows  how these
conditions    can affect   gas mileage.
                                                          Miles        per
      Road conditions                                    gallon        loss
                                                          (percent)
Broken and patched      asphalt                                   15
Gravel                                                            35
Dry sand                                                          45
3% grade                                                          32
7% grade                                                          55
      Environment
18 miles per hour tailwind.......(l2%            gain)
18 miles per hour crosswind                                        1
18 miles per hour headwind                                        10
2Q"F temperature                                                   8
Altitude  (4,000 ft.)                                             15
      State   of vehicle    maintenance
One plug misfiring  50% of time                                    7
Tires underinflated  35%                                           7
Front wheels l/4 inch out of alignment                             2


                                     27
Vehicle    characteristics       and options
       With all the models, car lines,            and options available
to new car buyers, a veritable           plethora      of vehicle      config-
urations   are possible.       EPA officials       estimate      that con-
sidering   only characteristics,         such as car line,          transmis-
sion type,    engine   displacement,       axle   ratio,    and    engine    type,
about 8,700 different        configurations       exist.     Considering
other factors,     such as power steering,           air-conditioning,          and
nonperformance     options,    the number of different            combina-
tions available     would be even larger.
       EPA's testing      procedure does account for the effect        some
vehicle   characteristics       have on gas mileage.       Factors con-
sidered,   at least to some extent,         include aerodynamic drag,
axle ratio    l/,  and air-conditionins.          A factor  not considered
is the effect     of radial     and various    types of tires.
CONCLUSIONS
       Although there is not enough data to draw firm conclu-
sions concerning     the reliability     of EPA gas mileage estimates,
indications    are that these estimates      are higher than what
most consumers experience        in everyday driving,   because of the
many ranges of variables       which are not controllable     in labora-
tory testing.
       EPA's estimates  show the relative  performance   between
makes and models, and provide useful information       to consumers
for comparing gas mileages of new cars.       However, consumers
may not understand the nature of the estimates       and their
usefulness   in comparing the mileage efficiency     of new cars.
       Therefore,    we believe    it is necessary that consumers be
better   advised on how the estimates          and the mileage guide
can be used in selecting        fuel-efficient     automobiles suited
to their    individual   needs.
RECOMMENDATION
     We recommend that FEA clearly       inform the public,   as
part of its advertising    campaign, how the EPA estimates       can
be used in selecting    the more fuel-efficient    automobiles.


L/Axle ratio   is measured by the number of times the drive-
   shaft turns for each time the rear wheels turn.




                                       28
AGENCYCOMMENTSAND OUR EVALUATION
       In commenting on our report      (see app. I), FEA agreed
that getting    the public to use the gas mileage guide would
in fact be easier and more quickly        accomplished    if there
was more public confidence       in EPA's mileage figures.       In
response, EPA stated (see app. II) that in discussions             of the
credibility   of EPA estimates,     the underlying    assumption is
that in-use experience     yields lower mileages than those ex-
pected, resulting    in a lack of confidence       in EPA mileages.
        We believe that the comments of both of these agencies
recognize    the need for the public to be better     advised of
the mileage figures       and the manner in which they are to
be used, as a means of encouraging       the purchase of more fuel-
efficient    automobiles.




                                   29
APPENDIX     I                                                                         APPENDIX        I




                      FEDERAL       ENERGY        AD.MINISTRATION
                                    WASHINGTON,    DC    20461



                                                                         OFFICE OF THE ADMINISTL4TOR
                                             June 3, 1977



     Mr. Monte Canfield
     Director
     Energy    and Minerals        Division
     General     Accounting      Office
     Washington,      D.C.      20548

      Dear   Mr.   Canfield:

     This is in response         to your letter    of April     27, 1977,
     requesting       our comments   on the draft     report    "Convincing
     the Public       to Buy the More Fuel-Efficient         Cars:     An
     Urgent     National   Need."
     A general      comment on the report             and the overall         program
     is that more attention              and analyses       are needed on the
     fuel    economy numbers          themselves.         Convincing     the public
     to use the Gas Mileage              Guide and to refer          to the Fuel
     Economy Label        prior     to purchase        could be easier        and more
     quickly     accomplished         if there      was more public        confidence
     in the numbers.            We believe       that   the report      should     give
     increased      emphasis      to this      issue.                            Q

     A staff    analysis       of    your report,          including specific
     recommendations,          is    enclosed.          If we can provide     any
     additional      information,          please       let us know.




      Enclosures




                                                   30
                                                                                        APPENDIX I
APPENDIX I



                                        STAFF ANALYSIS

     This   GAO draft      report      made three        main   recommendations            for    FEA:

            1.     Evaluate    the effectiveness       of the gas mileage
                   advertising    program     for 1977 model cars through
                   the use of consumer         surveys   similar to the one
                   used for the 1976 program.            (p. 22)
            2.     Design,     implement,      and evaluate            a timely     paid
                   advertising       campaign     on a pilot           basis    for the
                   1978 model cars.           (p. 22)
            3.     Clearly      inform     the public,    as part    of its
                   advertising         campaign,    how the EPA estimates                  can
                   be used in selecting           the more fuel-efficient
                   cars.       ip. 38)
     Comments     are   addressed       to   each    recommendation          in   sequence:

     1.     An ongoing       evaluation         of the total         program      is being
            conducted,       in-house.          We are examining           such aspects
            as the inventories             of Guides       in the Pueblo Distribution
            Center     and in our warehouse,               the type and extent            of
            media exposure          (written       as well      as TV and radio)          and
            comments      received       by the Federal          Regional        Offices    of
            the Federal        Energy      Administration          (FEA) and the
            Environmental         Protection         Agency     (EPA), including          spot
            checks of automobile               dealerships       around      the country.
            The report       gives     the inference          that     "advertising"         is
            defined      simply    as TV and radio            spots.       We, however,
            include     all methods          of informing        the car-buying          public
            about    the Label and the Guide.

            A specific       separate       assessment       of the usage of the TV                                  -2
            and radio       spots will       be prepared.           These spots were
            released      in late       December     to sustain        interest       in the
            program     between       the fall      and the spring           buying     surges.
            Our goal has been to keep the program                        in the public's                 ~-.7.   ._. - _. _
            view through         the whole model year.               The regular         media
             (newspapers,        magazines,       and automobile           industry      adver-
            tisements)       publicize       the numbers         extensively        in the
            fall     and again      in the early        spring      when the second
            publication        is issued.         To fill      the gap between           these
            news items,        we released        the spots.




                                                    31
APPENDIX    I                                                                                 APPENDIX     I




           Questionnaires      will   be sent to all stations       which
           received      the spots  in order   to elicit   critical      comments
           on the usage and content.          When we have assembled        the
           information      we will   send it to you.
     2.    It can be argued                that     paid advertising           has certain
           advantages         over public             service      announcements.            However,
           such a move would have serious                          consequences         as far as
           the entire         Federal         Government          and its relations            with
           the communications                 industry        are concerned.            First,       it
           would     set a precedent                that     would seriously          impair       the
           government's            ability        in obtaining         free    space and air
           time for public               service       messages       and programs.            Such a
           move would also involve                     the government          in the highly
           competitive           time and space buying                 business       thereby
           opening      itself         to possible           charges     of discriminatory
           practices        from those media not selected                        for commercial
           time or space.                Finally,         it would involve          the Federal
           Government          in providing             financial      assistance         for a free
           press.
     3.    Many effortshave           been made to "clearly                  inform"       the public
           about   how to use these             estimates.           A warning         is on the
           Label    itself:      the manufacturers              include        the warning          in
           their    advertising;         the text         in the Guide addresses                  this
           issue,      including      a warning         in a color         box in the center
           of the Guide.           According        to the letters             about     their      fuel
           economy,        the public      is generally           aware that         these       numbers
           are estimates         and should         be used as relative                indicators
           of performance.            However,        they are dissatisfied                  with the
           degree     of difference          between        the Label values             and their
           in-use     experience.          The problem,           therefore,         with this
           Program       may be more with the numbers                    themselves          and not
           how to better         explain      the ways of using                them.
           All the studies             of in-use       fuel     economy of which            FEA is
           aware,       show that        the EPA estimates             are "inflated"          by
           10 to 15 percent.                 They are not in or near the middle
           of the range of the actual                    in-use      fuel    economy for a
           given      car model.           It is recognized            that    no one test
           procedure         can measure         all   the factors          which    affect      fuel
           economy;        however,        the tests       should      produce      estimates
           which      fall     in the middle         of the range of the model's
           fuel     economy performance              if they are to be useful                  to
           the public.            These same studies              also lend credence             to
           the argument           that     the estimates,          while     generally        good
           relative        indicators         for a given model year,                may fail       on
           a year-to-year            basis      as accurate        measures       of relative
           fuel     economy.




                                                     32
APPENDIX     1                                                                            APPENDIX   I




   The GAO Report    also           does not appear  to give   sufficient
   emphasis  to certain             points  in two of the fuel    economy               studies
   it cites.
   DuPont     Study
   The Report         does not discuss         the main thrust          of the DuPont
   study:       that    production       cars,   when tested       on the EPA cycle,        are
   failing        to achieve       the same fuel       economy as the certification
   cars.        This raises        questions     about     the relationship        between
   certification           and production        cars.       In addition,     the study
   shows that         the EPA composite          estimates      are higher      than actual
   in-use       experience.
   Shell    of   Canada     Study

   There are two important                qualifiers         in the Shell     study which
   the Report         omits.       The cars in question            were not necessarily
   U. S. type models and thus direct                       comparison    with    the EPA
   estimates        for U. S. models may be misleading.                      The study also
   notes     that     their    driving      conditions         are about  80 percent      high-
   way driving,          not the 45 percent             used in the EPA estimates.
   As such,       the Shell        in-use    results       would be better       compared    to
   the EPA highway           figures      rather      than the composite.

   FEA, in order      to better    quantify        the differences        and to better
   understand     what kind of fuel         economy information            is the most
   useful,    has undertaken      a major      study of in-use         fuel     economy
   as it compares       to the EPA estimates           on both an absolute            and
   a comparative      basis.    It is hoped that           the results        of this
   study will     lead to improvements           in the fuel       economy estimates
   so that    they more accurately          represent      average     in-use      fuel
   economy.
   It is recommended      that Chapter    5 of the Report         address       these
   issues   prior  to making   recommendations          for improvements          in
   the program.      It is also recommended          that   the interpretations
   of the fuel    economy studies      be clarified.

   Other sections           of the report      contain     minor      criticisms        of
   FEA's handling           of the 1977 program.            One criticism          relates
   to the timing          of the program's        promotion        and discusses          the
   time required          to publish     and distribute          the Guide.          The
   Report's      statement        that   this   process      took approximately               2
   months     is in error.          We received      the copy from EPA on
   September       17, and on October          11 (3 weeks later)              began
   receiving       return     and reorder      postcards       from the dealers
   indicating        not only     that   they had received            the Guides,         but




                                                  33
APPENDIX I                                                                              APPENDIX I




     that    they also wanted      additional    copies.      All Guides were
     printed      and distributed     by October    29--a   total  of 6 weeks.
     This was the largest         (12.5 million)      and fastest    (ordinarily
     8-10 weeks was the usual           printing  time)   printing    of the
     Guides     to date.
     There was a recommendation                  that  a chart      something       like    the
     EPA press        release      be circulated       to the 25,000         dealers      to
     cover      the gap between          the model year introduction                and the
     printing       of the booklets.             There are two main difficulties
     with     this    approach:         One is that      reproduction        of the charts
     could      be almost        as lengthy      a process     as having       the Guides
     printed.         An order      of that      size would have to go to the
     Government         Printing      Office     to be typeset        rather     than just
     mimeographed          or xeroxed.         This preparation          process      and
     printing       time     could    take 3 to 4 weeks.
     The second reason         is that     no legal   authority        exists      for
     requiring      the dealer      to post such information.               The Act
     requires     the Guide       (Section    506 (b) (1) of Title            III,     P.L.
     94-163,    refers   to "a simple         and readily      understandable
     booklet")    ; a chart      is technically      not the Guide nor a booklet
     and therefore,      not subject        to rulemaking.
     If some other          format,       like  a wall    chart,  were printed,       this
     would also require             printing     time as well     as extra    funds.       To
     incur     this    cost     (approximately        20-25 cents    each) on top of
     printing       the Guides,         in order    to give the dealers       the
     information        either      when the Guides        arrive  or a couple       days
     early,      does not appear            to be an effective     use of funds.
     The issue       of when to cut off the testing                   and still       provide
     the maximum fuel             economy information           to the public         is up to
     EPA.      If EPA determined           that     an earlier       cutoff     date could be
     feasible,        that would be acceptable               to FEA.        However,     if they
     believe      that     early     September      allows     more useful       information
     to be printed           in the Guide,        then FEA will         continue      to ensure
     the fastest         printing       and distribution          possible.




                                                   34
APPENDIX       II                                                                         APPENDIX          II




             UNITED     STATES      ENVIRONMENTAL            PROTECTION       AGENCY
                                     WASHINGTON.      D.C.   20460

                                        JUN14 1977

                                                                                          OFFICE OF
                                                                               PLANNING    AND MANAGEMENT




  Mr. Henry Eschwege
  Director,   Community and Economic Development              Division
  United States General Accounting   Office
  Washington,   D.C. 2054$
                                                                                '.
  Dear Mr. Eschwege:

       We have reviewed        your draft   report  on "Convincing     the Public           to
  Buy More Fuel-Efficient        Cars:    An Urgent National    Need."

         In general we found the draft         to be a balanced and accurate    review
  and critique     of our efforts   to have new cars labeled with fuel economy
  information    and to make available       to the public copies of the Gas Mileape
  Guide.     Our substantive    comments are directed      toward the two principal
  EPA-related    recommendations    contained.in     the draft   report and the
  discussion    and recommendation    relating     to the credibility   of the EPA
  mileage estimates.

          The draft    report contains        a recommendation       that EPA work toward
  getting     the Gas Mileage Guides distributed            earlier      by advancing the date
  on which all fuel economy testing              must be completed.         Attached   is a staff
  paper which analyzes the feasibility               of doing this for future         model years.
  As noted in that paper, it is already too late to accelerate                       1978 model
  testing     to accomplish     significantly       earlier  guide distribution.           We will
  continue      to analyze the feasibility          and advisability       of advancing the
  testing     deadline    for future     model years, but the paramount consideration
  must be retention        of the accuracy and credibility              of the guides.      We will
  work toward implementing          alternatives      that do not significantly          compromise
  credibility       or accuracy and which can otherwise             be incorporated      into the
  program.

          The second principal        recommendation     for EPA in the draft      is that
  we investigate       the possibility     of distributing      charts containing     fuel
  economy information        for display    in dealers'      showrooms until    the guides
  are available.         We are pursuing    this alternative       with the Federal Energy
  Administration       and the industry     in the hope of getting        such charts dis-
  tributed,     possibly    as early as the 1978 model year.




                                                    35
APPENDIX II                                                                              APPENDIX II




             The discussion    of the credibility       of the EPA estimates          points out
     that "Most drivers       will not experience       EPA's estimated        mileage figures,
     but they are reliable        for comparing mileage rates of different                model
     cars."      As the ensuing discussion        in the draft    illustrates,        the mileages
     of cars vary considerably         depending on how they are tested or driven in
     use.      It must be borne in mind that most drivers             will not experience          the
     fuel economy generated         in any testing     program, nor could they expect to
     experience      an average mileage calculated         from an extensive        in-use data
     base -- most drivers        will always either       get higher or lower mileage
     than any test or in-use average.             In most discussions        of the accuracy
     or credibility      of the EPA estimates,       the underlying       assumption       is that
     inaccuracy      means that in-use experience         yields lower mileages than those
     generated     by EPA. While it would be simple to design a test which would
     generate     much lower fuel economies than do our current                procedures,      doing
     this might well rank cars improperly            and would thus not provide data
     "reliable      for comparing mileage rates of different             model cars."

             We appreciate    the opportunity        to review    the draft     report    prior   to
      its   submission    to Congress.

                                                                  Sincerely     yours,




                                                                  Richard D. Redenius
                                                           Acting Assistant  Administrator
                                                             for Planning and Management

      Enclosure




     GAO note:     Agency enclosure       not   included    in this   report.




                                                   36
APPENDIX     III                                                                APPENDIX   III




                                   American Motors
ä                                  Corporation
                                   Vehrcle Environmental    and Energy   Regulations
                                   14250 Plymouth    Road
                                   Detrott. Mlchlgan  48232


June 2, 1977




Mr. Walter C. Herrmann, Jr.
Regional Manager
United States General Accounting
   Office
Regional Office
427 Michigan Avenue
Detroit,  Michigan  48226
Dear Mr. Herrmann:
Thank you for the opportunity    to review and comment on a draft of
GAO's proposed report to the Congress entitled     "Convincing  the
Public to Buy the More Fuel-Efficient     Cars: An Urgent National
Need."
American Motors comments are attached and are primarily    concerned
with the credibility   of the fuel economy estimates.   We believe
this issue needs attention   before a broader and more comprehensive
information  program could be made more effective.
American Motors agrees that an urgent         national            need exists          and hopes
that our comments are constructive.
Sincerely,


Stuart R. Perkins            /
Director   -
   Vehicle Emissions   and
   Fuel Economy




                                   37
APPENDIX           III                                                                                APPENDIX           III


AMERICAN MOTORS COMMENTSON THE DRAFT REPORT ENTITLED "CONVINCING
THE PUBLIC TO BUY THE MORE FUEL-EFFICIENT                                       CARS: AN URGENT NATIONAL
NEED" PROPOSEDBY THE GENERAL ACCOUNTING OFFICE



American         Motors        considers          the issue             of reducing         the consumer
credibility              gap in the published                     Environmental            Protection           Agency
(EPA) mileage               estimates           fundamental              to the stated         goal       and is
disappointed              to see it        placed          last        among the three              issues      com-
prising          the General           Accounting           Office's          proposed        program.


Consumers need to understand                             the following             fuel     economy facts:
          1.     The EPA mpg values                 can be useful               as an aid            in purchasing
          a fuel         efficient        car.

          2.      Individuals            should      not expect             to duplicate             the EPA
          fuel     economy numbers                listed          for     the city,        highway        or com-
          bined      categories.               Actual       vehicle         in-use        factors       will     yield
          a wide distribution                    of fuel          economy results.

          3.      The EPA testing                procedure              has some limitations,                  not
          discussed           in the report,               that         tend to make the EPA fuel
          economy estimates                    unrepresentative.                   For example:
                   a.       Some vehicle            configurations                 are not tested;,
                   however,           to comply          with      the labeling            requirement
                   fuel      economy estimates                    are given         the vehicle           from
                   another           vehicle      considered              to be comparable.

                   b.       The practical               aspects          of fuel      economy data              generation
                   preclude           measurement           of a statistically                  valid          sample.

                                                                  38
APPENDIX         III                                                                                        APPENDIX                 III



                  In fact,           a single            test       usually         represents            tens
                  of thousands                of eventual                production           vehicles.

                  c.       Inherent           with       the limited               testing         is    the
                  actual          EPA test            variability             as well         as the vehicle's
                  test         variability.                  "The limits            of variability                   due to
                  measurement              error         and vehicle               variability             on a 1975
                  FTP are estimated                      at + 19% of the mean for                           HC, + 33%
                  of the mean for                     CO, and +- 5% of the mean for                                 CO*.
                  These limits                 define         the range for                which         95% of the
                  test         measurements              would be expected                    to fall          if     there
                      is no variation                 in the true             level        of these         vehicles."-
                  Since          these     compounds comprise                         the EPA fuel                  economy
                      formula,        based on the carbon                      balance            technique,           their
                      variability             suggests          that      their       combined            results          are far
                      from an absolute                  measurement            and must be treated                         accord-
                      ingly.

         4.      If      consumers            wish      to determine               the fuel             economy of their
         car a specific                  method or methods                    should         be recommended.                     Under
         no circumstances                     should         fuel      economy measurements                         be consider-
         ed representative                     of a vehicle                until      it     has experienced                    at
         least          4,000 miles.

As a vehicle               manufacturer               we are concerned                     with    the credibility
issue         and believe             that       it     is      the necessary               foundation              of an


l-/     W. K. Juneja,                D. D. Horchler,                     H. M. Haskew, A Treatise                          on
Exhaust        Emission             Test      Variability                (SAE 7701361,              page 18.


                                                                    39
APPENDIX        III                                                                                 APPENDIX            III



effective           public          information          program.            It   is not our intent               to
criticize           the EPA test               procedure        or the handling              of fuel        economy
data in this            response.                  Nevertheless,         we are compelled               to point
out certain            limitations                 we believe       result        'in an unrealistic               fuel
economy estimate                    for     a given      vehicle.


A final       point          that     we believe             causes     a considerable              credibility
 gap is      the current                  vehicle      comparision           system which           groups        1977
 vehicles       into         five         passenger       car classes             and three     station           wagon
 classes.           Gross overlapping                   of the 1977 class                 ranges      result       in
 a loss      of credibility.                        The fuel     economy range for              the mid-size
 class      is virtually                  the same as that             of the large           class      and this
 could      help      some consumers                  rationalize        purchases          of larger          cars
 rather       than mid-size                  cars.      This     type of regulated                 information
 dissemination               causes          a credibility            gap and should           not have been
 required.            Attached             is American          Motors       Corporation           comments to the
 fuel     economy labeling                    and disclosure             procedures         and requirements,
 dated      January          3, 1977 for              your     information,.


 American          Motors       recommends that                 before        any massive          public      information
 program       is     launched              that     the education            of the public           concerning
 the usefulness                of the EPA fuel                 economy estimates              be considered.
 Also       the fuel         economy labels                  need to be simplified                 by eliminating
 any misleading                or confusing              information.              This    simplified          label
 could       be supported                 by a more comprehensive                   and well        publicized
 Guide.




                                                               40
  APPENDIX           III                                                                APPENDIX       III




  -,3                                                     Amcricori   Motors
 til                                               ,      Corporation



January         3,   1977




Mr. E. 0. Stork
Deputy     Assistant      Administrator
I.lobi3.c  Source    Air Pollution             Control
401 M street,        S.W.
Washington,        D. C.        20460

Dear      Mr.    Stork:

American   Motors            Corporation          submits      the attached        comments   in response
to tllc wvcmbcr              10, 1976 Federal             Register     publication        (41 F.R.     49752)
rega~tling  Fuel            Economy      Testing,       Labeling     aild Information        Disclosure
Proccdurcs    and           Rcquiremcnts          for   1977 and Later          Koclcl Year Automobiles.

We arc cncouragcd       that    EPA is considering        revisions    in thcsc    proec:ciurc:s
and hope that      our conliaents   on the classification           of comparable      auto-
mobi.!.c~;  and the p,lPG 1abc.l arc bcncficinl         to you in bringing        about      a
more rcillistic     and practical      regulation.

Sinccrcly,




Stuart     R. Perkins
Director     -
   Vchiclc     Emissions           Programs

/jr

Attachment




                                                         41
APPENDIX III                                                                                  APPENDIX III




American          Motors        Car: .ration             Comments on the MPG Labeling                 and
Disclosure          Procedure-            and Requirements                for     the 1977 and Later
Model Year Automobiles                     Published               in the Federal       Register      on
November 10, 1976 (41 F.R.                              49752)




The Federal           Register          of November 10, 1976 contained                         the Final
MPG Labeling              and Information                 Disclosure           Procedures    and Rcquire-
ments      for     the 1977 and Later                     Model Year Automobiles.                  The affcct-
 ed vehicles          are light-duty                    trucks      of 6000 pounds GWR or less                 and
 passenger         cars.


 The regulations                require          that     each affected           vehicle    when offered
 for     sale     carry      a label        showing          its     MPG (city,       highway      and combined),
 the average          fuel       cost      for      15,000 miles,              and the MPG range of vehi-
 cles     that     are considered                 comparable.            The regulations           rcquirc     that
 the dealers          maintain            the MPG labels              on the vchiclcs           through      the
 time     of sale         and have copies                  of the Federal           J:ncrgv Administration's
 Gas Mileage          Guide for            that         model year.


 As a result          of some criticisms                         of the label       fornWt    and the mcthod-
 ology      for     classifying            comparable              vehicles,       EPA is    reconsidering
 these      issues        for     1978 and has requested                       comments.




                                                            42
APPENDIX        III                                                                                  APPENDIX          III


 Comparable            Vehicle         Classification
 The current               "Interior         Volume Index"           is an attempt                to quantify
 the     space inside                a car     (sedans,         hatchbacks,             and station          wagons)
 based on the approximate                          volume      of the front              and second seat              areas
 and the cargo                or trunk         area.       The seating            volume       is     the product             of
 head,       leg,      and shoulder             dimensions          from the Society                  of Automotive
 Engineers            JllOOa         (Recommended Practice).                      The cargo or trunk                  volumes
 are appoximated                 from dimensions                in this      procedure,              with    modifica-
 tion.         These volumes               are combined           into     an index          because          the calcu-
 lations        based on the available                         dimensions          do not yield             a true
 iriterior          volume.            The range       for      1977 passenger             cars       was from         77
 to 172 cubic                feet.


 The SAE JllOOa                 dimcnsicns          are the basis            for        the current           FEA/EPA
 Comparable            Vehicle          Classification.              These dimensions                   are published
 yearly        for     all      vehicle        manufacturers             through         the Motor          Vehicle          Flanu-
 facturers            Association             Specifications             Form.          They are a convenient
 data        source,         however,         care must be exercised                     when these           data     are
 utilized            for     other      than    intended         purposes.              Problems        arose        in the
 application               of these          dimensions         to yield          the    1977 Interior            Volume
  Index       for     certain          vehicles.


  The SAE JllOOa                interior        dimensions          are minimum linear                      dimensions
  selected           for     identifying           head,       leg and shoulder                room.         They were

 not      intended           to be multiplied                 together      for     interior          volume calcu-
  lations       as used in the FEA/EPA Comparable                                  Vehicle          Classification.
 The product               of the three            interior        dimensions            yields       a val~c        that



                                                          43
                                                                                             APPENDIX             III
 AITENDIX         IIf


is more appropriately                 termed        a minimum index        rather         than    a
comparable        volume.


The current        comparison              system    is misleading.            It   does not group
comparable        vehicles          into     classes    useful        to the consumer.                The
problem     is clear         when the resulting                49- State   1977 MPG ranges                  are
inspected        for    these       classes:

                                            -PASSENGER CARS
             FEA/EPA Class                                                 MPG Range
              2-Seater          *                                          15- 21
              Subcompact                                                   15- 44
              Compact                                                      13- 26
              Mid-Size                                                     ll-       20
              Large                                                        ll-       20
                                            STATION WAGONS
              Small                                                        19 -40
              Mid-Size                                                     12 - 20
              Large                                                        12 -19
                 * Not based on interior                     volume

Gross overlaps           of the MPG ranges               for      subcompact        and compact         classes
are bound to confuse                  some consumers.              The MPG range           for    the mid-size
class     is virtually              the same as that           of the large          class       and this
could     help     some consumers              rationalize         purchases        qf large       cars      rather
than mid-size           cars.


The insensitivity               of the current           comparison        system         to the vehicle


                                                             44
APPENDIX       III                                                                                 APPENDIX                III



 population           is obvious.          The need to improve                       seems equally
 obvious.


 American       Motors       suggests        that         if     interior          volume     is     the only
 parameter           to be utilized          for     comparing              vehicles         then     a new pro-
 cedure       should      be developed             with        the specific            objective            to define
 the useful           interior      volume of vehicles.                           SAE JllOOa         can remain
 intact       continuing         to serve          the purpose              for     which     it     was developed.
 This     new procedure           should      be developed                  through         SAE with             the
 normal       inputs      from    industry,           FEA, EPA and other                     interested                parties.


 While      we have definite               suggestions                on what we would               like         to rec-
 ommend as far            as new dimensions,                     it    would       be improper             for     American
 Motors       or any single           company to develop                      a set of definitions                         for
 interior       dimensions          that     would             be the yardstick              for     the entire                  in-
 dustry.         Therefore,         we are encouraged                       to see the recent                    efforts          of
 the Federal           Energy     Administration                      (FEA) in meeting              with         the Human
 Factors       group of the SAE.                   WC recognize&that                   the goal            of achieving
  the necessary            ..provemcnts            in time            for    the    1978 model year may be
 optimistic           and suggest          that     a more realistic                   effective            date woeuld
  be the 1979 model year.                     In the meantime,                     the existing             procedure
 with       a more appropriate              rear      shoulder              room dimension            and pro-
  visions      for      hidden    cargo       volume could                  be carried        over         for      the
  1978 model year.


  Recognizing           the inadequac>             of the current                  system,         we suggest              that
  the vehicle          manufacturers              be permitted               the opportunity                to reclassify


                                                     45
APPENDIX             III                                                                                                                         APPENDIX                 III




a vehicle               they          consider               to        be misclassified.                                    Also,                this          process

would         tend         to        reduce           the         unrealistic                     aspects                 of        the          objective

class         cutpoints.



Label

We recommend                     retention                  of      specific                labels                 and      general                     labels.

We contend                 that          the        current                label           formats                 contain                 too          much       in-

 formation,                are        repetitive                    of      the       price             sticker                 and         Gas Mileage

Guide,          and        force              use     of         labels            that          are         too      large.                     If      the       cus-

 tomer        cares             to    know          the          details             the         current              labels                carry,                he cou Id

be      directed                to      the     --Gu .Je          by       a short               statement                     on the                 label.



We propose                 that          the         revised               label           formats                 include:

                   1.           The      combined                  city       and          highway                 MPG value                     only.

                   2.           Range          of     comparable                     vehicles--or                         the         current

                                statement                  indicating                     lack         of     a range                 on a certain

                                date.

                   3.           A statement                      referring                 the         perspective                         buyer           to      the

                                Gas      Mileage                 Guide         for         operating                     costs,             city           and

                                highway              fuelC,'OI1C':.'.'Ivalues                               could         be         included                  with

                                the       statement                  currently                   directing                     him         to 'the             Guide.

                   4.           The       current                reminder                 statement                  could            be         included

                                Bn the              Guide          and       a short               reminder                    or     qualification

                                statement                  incorporated                      on-the                label.



 This       proposed                  format           would              permit            reducing                 the            size         of       the         label



                                                                                      46
  APPENDIX       III                                                                APPENDIX        III



by at least          50 percent        to facilitate          handling      and to provide
for     convenient      utilization           on the current        price      sticker    format.
The protection          of the        label    would   also     be more manageable          by the
size     reduction.


We are not opposed to the use of graphics                           on the label         but be-
lieve     any graphics        must be functional               and must not create          l~bol         size
problems      of the type         we are currently             experiencing.




                                                  47
APPENDIX     IV                                                                   APPENDIX       IV


                                                                                   CHRYSLER
                                                                                   CORPORATION




                                      June   7,       1977




     Mr. Walter      C. Herrman,     Jr.
     Regional     Manager
     United    States    General    Accounting
        Office
     477 Michigan       Avenue
     Detroit,     Michigan      48226

      Dear   Mr.    Herrman:

              Attached     are Chrysler    Corporation's        comments on your
      proposed      report    to the Congress     entitled,       "Convincing   the
      Public     to Buy the More Fuel-Efficient             Cars:     An Urgent
      National      Need."      Our comments are in response            to your May
      4, 1977 letter        which requested     our appraisal         of the draft
      report.

              Thank you for the opportunity                to comment on your pro-
      posed report.         We believe        your initiative     in this  study and
      your effective        review      of the EPA/FEA fuel       economy labeling
      and guide      programs     will     serve as the catalyst       for some im-
      portant     improvements        that    should   be made in the program.

                                                             Sincerely   yours,




      CMH/vms

      Attachments

      cc:    R. J.     Piscopink




                                                 48
APPENDIX   IV                                                                APPENDIX   IV




                Comments      on the     GAO Proposed          Report
                 Entitled,       "Convincing     the      Public        to
                Buy the      More Fuel-Efficient           Cars:        An
                             Urgent    National       Need."




                                  Prepared     by
                         Chrysler     Corporation

                                  June    7,   1977




                                          49
APPENDIX IV                                                                   APPENDIX IV




                         Comments      on the    Proposed        GAO Report

                              "Convincing     the Public       to Buy
                               the More     Fuel-Efficient        Cars:
                               An Urgent     National      Need."



                                       Table    of    Contents


              Section                                                         Page

              Summary    of    Comments                                         1

              Digest    Comments                                                2

              Chapter    1 - Introduction            Comments                   6

              Chapter    2 - Potential    For Reducing                          7
                             Automobile     Fuel Consump-
                             tion    Comments

              Chapter    3 - Need for a More             Effective              9
                             Public   Information            Program
                             Comments

              Chapter    4 - Need for More Timely                              10
                             Distribution  of Gas Mileage
                             Guides Comments

              Chapter    5 - Credibility          of Mileage                   17
                             Estimates          Comments




                                                50
APPENDIX             IV                                                                                         APPENDIX           IV




         Summary of          Comments


         I.   Chrysler        Corporation           agrees      and supports            the       GAO recommendation
              that    FEA establish             a comprehensive               paid      advertising             campaign
              to acquaint            prospective          automobile          purchasers            with      the   EPA/FEA
              fuel        economy     values       shown     on labels         and in         the    guide.


    II.       Chrysler        Corporation           believes         that     alternative            (and      more
              attractive)methods                than      proposed          by GAO are         available            to make
              the    guides         securable       in    dealer's          showrooms        when new models               are
              introduced.


  III.        Chrysler        Corporation           believes         that     measures         in    addition         to   those
              recommended            by GAO can be taken                to reduce           the     consumer-EPA           fuel

              economy        credibility           gap.




                                                               51
APPENDIX           IV                                                                                                                   APPENDIX             IV



           What         follows          is        a detailed           critique                   of   the     GAO proposed
  report          entitled            "Convincing               the     Public               to Buy the            More            Fuel-
  Efficient             Cars:          An Urgent               National              Need."



  Digest          Comments

  page        i      GAO states:
  & ii
                     "For       example,              the      combined              Environmental                     Protection             Agency
                     mileage            rating          for      subcompacts                   can range               from        15 to 41
                     miles        per         gallon.           Assuming               a person               drives          15,300        miles
                     in      a year,           the      difference               in         fuel        consumed          by two cars                  in
                     the      subcompact                category             could           be about            600 gallons                 of
                     gasoline                and $400          in     cost.            If      we can increase                       our national
                     fleet        average             mileage          for       all         cars        from     15 to 20 miles                       per
                     gallon,            it     is     estimated               that          about        432 million                barrels            of
                     petroleum                could         be saved           each year."


                      Chrysler               comments:
                      The range               for       subcompact             is      either            incorrect             or out-
                      of-date.                Specifically,                   the      January            25,      1977        letter
                      from       L.     I.     Ranka,           EPA, to G. W. Robertson,                                  states            the
                      range       for         subcompacts               is     11 to 44 mpg.                       (This           is      combined
                      mpg and for                   Federal--         which           should            be stated             in     the     text.)
                      Using           these         figures,          the      difference                  is    1022         gallons             of
                      gasoline               and     $665       in cost.




                                                                        52
APPENDIX         IV                                                                                                           APPENDIX                  IV




      Digest          Comments             (Continued)

                      GAO should                    make the            point         in    their         summary            of      pages         10
                      through             14 that        buying             a subcompact                will         not     guarantee
                      good      mileage.                This      is because                the      range           of     fuel      economy
                      in    the      subcompact                class         of vehicles                 is     from        11 to 44 miles
                      per     gallon.               The public               may be mislead                     in     assuming             that
                      buying         a small            car      assures             good     fuel        economy.


   page    ii         GAO states:
                      II . . . average             of 27.5        miles          per       gallon.              Many cars             are
                      achieving              that       level          now . ..I'


                      Chrysler             comments:
                      The term             many seems overstated.                                 GAO should                offer      some
                      summary             statistics             such        as x% of             the     model            types      offered
                      for     sale         were        27.5      mpg or greater.


   page    iii        GAO states:
                      Most 1977 model                     cars         were      available               for     sale         in     September
                      1976.          It      was not           until         late      October            or early             November
                      1976        that       the       consumer             guide,         showing             comparable             mileage
                      estimates,                 was available                  in dealer               showrooms.                  An estimated
                      766,000             cars      were        sold        during         this      period."


                      Chrysler             comments:
                      These        summary             statements              imply        that         consumers             could         not
                      make judgments                    using          comparable             mileage            figures             because
                      the     information                was not             available.                  Certainly             this         state-




                                                                       53
APPENDIX      IV                                                                                                                       APPENDIX                      IV


    Digest     Comments               (Continued)

               ment         should           be conditioned                       to explain                that           (1)         all         new
               cars         offered             for      sale         were        required             to have                 fuel          economy
               labels             on them and consumers                              could,            by going                  from             showroom
               to        showroom,              compare             the      fuel        economy            of new cars,                           (2)        all
               the         fuel       economy            information                 contained                 in     the             November
               guide          was released                    to the             press      by EPA in                 September,                         and
               (3)         manufacturers                     were      advertising                  fuel        economy                  numbers                as
               part         of     their         new model                 introduction                  advertising                          campaigns
               when the               fuel        economy             results            were       attractive.


 page   iii    GAO states:
               "A Federal                  Energy            Administration                      study         estimated                      that        a
               reduction               of about               900 million                  gallons             in annual                      fuel
               consumption                   was attributable                        to      the        1976         gas mileage
               information                   program.                 These         savings             occurred                 despite                 the
               fact         that       only           7 percent              of     the      new car                buyers             surveyed
               were         aware          of     the        consumer             guides          published                    by that                 agency."


               Chrysler               comments:
               Although               we have            not        evaluated              in      detail            the          results                or
               validity               of     the       FEA study,                 the      FEA report                     (Volume                 I,     page
                   15)     very       carefully                (and        properly              so)      stated                "It          is
                   important           to note               that         this      analysis              is        not         intended                 to
                   imply       that        awareness                has actually                   caused            buyers                  to become
               more         interested                  in     fuel        economy;              instead,                 the         program             has
                   enabled         buyers             who are             already          interested                     in      obtaining
               good         gas mileage                  to make more                     fuel         efficient                  choices."




                                                                          54
APPENDIX       IV                                                                                                               APPENDIX                IV


    Digest      Comments            (Continued)

                The GAO draft                     says      this        saving           was attributable                        to     the
               .FEA program.                     According              to Webster                "attribute"                  means
                "to     explain             by indicating                    a cause"--                 exactly           what        the
                FEA report                says         should         not      be implied.                     The main            point
                is     that      these            "aware"           buyers          were         interested               in     fuel
                economy          and the              guides/labels                     were       tools         that      helped
                them obtain                 fuel         efficient             vehicles                (or,      as FEA said,
                "facilitated                    by the        FEA/EPA fuel                     economy           program").



   page    v    GAO recommends:
                "That         the     administrator                     of     the        Environmental                   Protection
                Agency:

                        --Work             toward          advancing               the        cutoff          dates       for
                              mileage             guide       testing              in     order          to make the
                              mileage             guides           available              in     dealer's               showrooms
                              when new models                        are      introduced."


                Chrysler             comments:
                Advancing                 the     cutoff           dates       for        mileage              guide       testing            is
                just      one technique                      for       making            the     information                   available
                to consumers                     in    dealer's              showrooms             in         a more       timely
                manner.              If         the    objective              is        to have          comparative                  fuel
                economy             information                 available                at     or before               general
                model          introduction,                    the        GAO may want                  to recommend                   to
                the      EPA Administrator                            that     he take             steps          to achieve                 this
                goal          and not            be so specific                    or to the                  techniques              used         to
                accomplish                 the        objective.




                                                                        55
APPENDIX    IV                                                                                                                   APPENDIX                     IV


 Chapter   1 Comments

 page 2      GAO states:
             "During            emissions                  tests,         which         are      run        on a dynamometer                           (see

             page       31,         EPA compares                    the        amount          of gaseous              emission                 with
             the       amount              of gasoline                used       by the          automobile."


             Chrysler                comments:
             This        statement                 appears            to be misleading.                            EPA computes                       the
             amount            of         gasoline           used         by the        automobile                 from        the        gaseous
             emissions                    that     are       measured            to determine                    compliance                    with
             exhaust            emission                 standards.                 EPA does              not         directly             measure
             the       amount              of     gasoline            used.



page 8       GAO states:
             "Auto         manufacturers                       should           be able          to achieve                   the     1978            stan-
             dards.                 The estimated                    overall         fleet            average           for         the        1976 and
             1977 model                    cars       was 17.8              and 18.6            miles           per     gallon,                respec-
             tively.                 However,              auto       manufacturers                       stated        that         meeting
             the        1985         standards               of      27.5       miles          per        gallon        will              be
             difficult."


              Chrysler               comments:
             While            the         facts       are      accurate,                this         is    almost         misleading
                 in    several              respects.                The quoted                1976        and 1977              numbers
              are       for         all         vehicles            including            imports.                  The 1978               stan-
              dard       of         18 is          a task           for     three        of the            four        U.S.         companies.
              The standards                        after          1978 also          are        a task,                And,         achieving
                 the    fuel          economy              standards             is heavily                dependent                on emission
              standards.




                                                                          56
APPENDIX            IV                                                                                                                    APPENDIX                 IV


  Chapter          2 Comments


  page        10     GAO states:
                     "In       1975,           the        United             States         consumed             the      equivalent                  of
                     about          6 billion                   barrels           of crude            oil,           and about             39 percent
                     of      the        oil        consumed                was imported.                     The automobile                      is    the
                     single             largest                user        of petroleum               and in            1975 consumed                      the
                     equivalent                    of      2.3        billion            barrels          of     crude          oil."


                     Chrysler                 comments:
                     Both          figures               seem slightly                    high.           The "National                    Energy
                     Outlook','               published                   by FEA in           1976,          indicates              on page            xxiii,
                     the       percentage                      is      37 percent.                 DOT reported                   (Federal
                     Highway              Administration,                         Table          VM-1,         dated         January,                1977)
                     that          in     1975 passenger                         cars        used     76,000            million            gallons
                     (this          is        1.8        billion             barrels)            and a               motor        vehicles
                     (passenger                     cars,            motor       cycles,           commercial                buses,             school
                     buses,             other            buses,            and      single         unit        and combination                        cargo
                     vehicles)                 consumed                   108,984         million            gallons            (this           is    2.6
                     billion              barrels).


page     12          GAO states:
                     "In       view           of        the         relatively             low     awareness              and use of the
                     gas mileage                        information                 in     1976,      the           potential             for        reduction
                     in      fuel        consumption                       is    even       greater            in      future           years."


                     Chrysler                 comments:
                     We question                        this         basic       conclusion               that         public           education
                     alone          can result                       in    sharply           reduced           fuel       consumption.                       The
APPENDIX       IV                                                                                                                        APPENDIX                   IV



 Chapter   2    Comments                   (Continued)
                report           bases                this       conclusion                   on a FEA study                     which          showed          a
                difference                      in     purchase/consumption                                  decisions            based          on a dif-
                ference               in        awareness                  of EPA/FEA gas mileage                                labels          and
                guides.                   We believe                  it      is very           possible               that       this          data      re-
                flects               the        behavior              of      those           car      buyers          who place                a high
                premium               on fuel                efficiency.                      Most        new car          buyers          do not
                discriminate                          between              brands         on the             basis        of     fuel      efficiency.
                Those           who do are                     the         very       ones          likely          to demonstrate                      aware-
                ness           of the            EPA/FEA labels.                              In other            words,          the      program
                may already                      have          worked             efficiently                    on the          prime          prospects,
                but       it         is     doubtful              whether               the         balance          of    new car              buyers
                will           respond                with       the        same behavior                     when exposed                 to add-
                itional               information                     on mileage                    labels        and guides.

                While           it         is        probably              true       that          the      EPAfFEA           fuel       economy
                programs                   have         resulted              in      reduced             fuel       consumption,                  it
                would           appear                that       the        FEA study                quoted          is    not        totally
                definitive                      in      this         respect.                 In addition,                 GAO should
                acknowledge                          that      automobile                 manufacturers                    have         also       played
                a role               in     encouraging                     fuel        conservation                   by means            of product
                actions               and promotional                              efforts.                  Auto      companies                have
                devoted                   considerable                     efforts            to improved                 fuel        efficiency
                of existing                          products              as well            as to the               introduction                 of new
                and more                   efficient                 models.                    In addition                to      the     extensive
                promotion                   of        fuel       efficient                models,             often        referencing                   EPA
                mileage               data,             manufacturers                     have         contributed                to      changes           in
                consumer                   product             purchasing                 patterns               and to          fuel      conserva-
                tion           and this                 factor             must       be recognized                    when evaluating




                                                                              58
APPENDIX          IV                                                                                                       APPENDIX               IV



 Chapter        2 Comments          (Continued)

                  the    effectiveness                    of     the      FEA/EPA program.


                  The FEA study                   suggests             that     many buyers               consider          fuel
                  economy          important              and a major              buying          rationale.              While
                  we would          not      dispute             these         findings,           we should            note
                  that      they      are        not      indicated             as resulting                from     the        fuel
                  economy          information                  program         of EPA/FEA.                 No casual
                  relationship               is        shown      or suggested                in     the     FEA study.
                  Hence,       this        would          not     appear          to constitute                 support          for
                  the     statement              that      the     program           "has      had a positive                    impact
                  on reducing               fuel         consumption."
 Chapter        3 Comments

 page      22     GAO states:
                  "We recommend                   that     the     Administrator                   of      FEA:
                  --evaluate            the effectiveness   of its gas mileage advertising
                     program          for 1977 model cars through    the use of consumer
                      surveys         similar    to the one used for the 1976 program.
                  --design,      implement,                      and evaluate      a timely paid advertising
                     campaign     on a pilot                      basis    for the 1978 model cars.        The
                     advertising       should                    be directed     to large audiences    which
                     include     substantial                      numbers of prospective       new car buyers."


                  Chrysler          comments:
                  We suggest              that         any future              research            on the       effectiveness                of
                  the      gas mileage                 program           should       focus         more     directly             on the
                  relationship               between             awareness            of    labels          and/or         guide       and
                  actual       purchasing                 patterns.               The research               should         answer
                  the      question:              Were new car                 purchasers               motivated          in      terms
                  of     the   car        they         bought          by the        EFA/FEAguide                  or labels?




                                                                          59
APPENDIX          IV                                                                                                                      APPENDIX                      IV




 Chapter        3 Comments               (Continued)

                  Concerning               paid         advertising,                       we believe                the          consumers                lack
                  of knowledge                   of     the      buyer's              guide            is     primarily                  due to               the
                   lack     of promotion                      to the             public           that        it     is      available.                      A
                   paid     advertising                     campaign               would          certainly                help          correct              this.
                   In this          campaign,                 over          and above                 the     promotion                  of     the
                   availability                  of      the        guide,           the        proper             use of          it      should             be
                   explained.                   Through             this,          consumers                 would         then          be encouraged
                   to ask          for      the        guide          at     the      dealerships.                         Consumers                  will
                   have      to      request             or seek             out          the     guides,             since             dealers              sell-
                   ing       products              with         unfavorable                     mileage             will          not      readily
                   give       the        guides          to prospects                      or encourage                     its         use.

 Chapter        4 Comments
 page      23     GAO states:
                  "The printing                       and distribution                           of     the        guide          depends             on
                   when the              results             of EPA's              mileage              testing             are         available.
                   For      the      1977 model                 cars,            a manufacturer                       could             have      its
                   cars       tested            as late              as September                      3, about             the         same time                that
                   many new model                      cars          are     already              available                 for         sale.           Since
                   printing              and       distribution                      of     the        guide         takes              about      2 months,
                   EPA's          cutoff          date         for         testing              would         have         to be advanced                        if
                   the      guide          is      to be in                the     dealer's                 showrooms              when new cars
                   are      available                 for      sale."


                   Chrysler              comments:
                   GAO's          suggestion                 that          EPA should                  work        toward           advancing                  the
                   cutoff           date        for         mileage              testing              does     not         acknowledge                  the




                                                                             60
APPENDIX     IV                                                                                                                        APPENDIX                 IV




   Chapter   4    Comments                 (Continued)

                  fact            that      the        cutoff          date                selected           is      a compromise                   date
                  and is             selected,according                                    to EPA, to achieve                          the      maximum
                  amount             of     information                    in         the        most       timely           manner.             While
                  it         is     possible            to advance                         the     cutoff           date,        it     must         be
                  recognized                  that        the         entire                certification                    program            would
                  then            have      to be advanced--earlier                                         guide           cutoff,           earlier
                  certification                        completion,                         earlier          certification                     start,
                  earlier                 EPA format              rules               finalized,                   earlier            emission             stan-
                  dards             established,                  earlier                   engine          development,etc.                            The
                  most             important             point         is         that           the       guide        cutoff          date            must
                  be established                         well         in        advance                so that          a manufacturer
                  can plan                 accordingly.


                  GAO appears                     to concur                 that             printing              and distribution                        of
                   the            guide      takes         about            two months,                     although              there         are        a
                   number                of publications                        throughout                    the     government                and
                   private                industry              where           printing                  and distribution                      is
                   accomplished                      on a much shorter                                 time         frame.            A good           example
                   in        the         government              is        the         Federal             Register.              Since         the
                   information                    is     targeted                     at     the       consumer              through           dealer
                   showroom                 distribution,                        it        may be more                 expedient                to purchase
                       advertisement                    space          in         the        dealers            press          such          as Automotive
                       News or other                    suitable                 publications.                         A contract                could          be
                       let        to allow             publishers                     to bid           on the          use of           their          print-
                       ing        and distribution                         channels                  in     order        to      provide             the
                       fuel         economy            guide          to        the         dealers           in      a more           timely          manner.




                                                                             61
APPENDIX          IV                                                                                                              APPENDIX               IV


Chapter        4 Comments               (Continued)

                 Appendix               II     (September            2,      1976 FEA letter)                     indicates
                 on page            2,       second        paragraph,               that      the     1977        guide       will
                 be printed                  on one large                sheet       and folded--to                  save         ap-
                 proximately                   two weeks            in     printing.              We note          that       the
                 guide        was not              printed          in     this      manner.           Perhaps             this
                  resulted              in     delay         or perhaps             the     estimate             was incorrect.


page      24      GAO states:
                  "We also              believe          FEA should                consider          other        methods            for
                  making           mileage            data       available               on a timely             basis       in      car
                  dealer's               showrooms.                One possibility                   would        be to dis-
                  tribute           mileage             comparison                charts         to new car           dealers              at
                  the       time         new cars            are    available              for      sale     and require
                  dealers           to display                the        data      for     buyer's         use.            Such a
                  chart,           in        the    form      of a new release,                      had been              published
                  by EPA in                  September           1976--the               same month          1977 model                 cars
                  first        became              available."


                  Chrysler               comments:
                  While        the           proposal         certainly              should         be investigated,                       the
                  following                  points        should         be noted.

                          . Printing  a chart may slow down getting    the booklet                                                               out
                            to the public.    Publishing facilities   and distribution
                            channels  would have to be used first   for the chart,                                                                then
                            for the guide.
                          . The Energy Policy      and Conservation                                        Act     still          requires
                            a booklet  be distributed.

                          . The public                 would not            really be able to do their                                  own
                            study (at                 home etc.)            of a wall chart.
                          . Preparing   and printing  wall charts                                          probably           would
                            take almost    as long as the booklet.




                                                                          62
APPENDIX     IV                                                                                                                        APPENDIX                    IV


   Chapter   4    Comments                  (Continued)

                       l     Preparing   and printing                                     wall      charts           would          add to
                             the program    costs.

                           - Charts   would have to be quite                                           large for complete
                             coverage   or type so small it                                           would be hardly   legible.

                           . Many dealers               have policies                           wherein    they do not                            use
                             this          type      of material    in                       their   dealerships.

                           . Dealers   selling                        products                not     favorably                  shown on the
                             chart   would not                        utilize              it.


                  As anoyher                      possibility,                       we suggest               again          that        FEA might
                  want             to consider                      a two page               tear       out         type      advertisement
                  in         the         dealers              press          (like         Automotive                News)          with        the
                  suggestion                      that         it     be posted.                    This           probably            would           be
                  relatively                      low         expense              and would            get         to     the      automotive
                  dealer                 very      quickly.                   It      probably             would           be appreciated                         by
                  dealers,                  customers,                 manufacturers,                         etc.


  page 25         GAO states:
  & 26
                  "Although                     an earlier                   cutoff          date        might            result         in       fewer
                  models                 being           shown         in      the        guide,         our         analysis              of the
                   1977             fuel        economy               program              showed        that            85 percent               of        the
                   tests             used         to compute                   1977 mileage                    estimates               were completed
                  by July                  31,      1976.              If      1977         testing            for        mileage             guide
                   entries                 had been                 cutoff           at     July        31,        1976,         there         would              have
                   been             sufficient                  data         to compute                 estimates                for       94.6         percent
                   (440             of 465)              of     the         models          listed            in     the      49 State             guide.
                   A similar                    analysis               of      the         California                guide          showed             there
                   was sufficient                             data          to compute               estimates                for       89.7       percent
                   (261             of     291)          of     the         models          listed            in     the      1977         California
                  guide."




                                                                       63
APPENDIX         IV                                                                                                                   APPENDIX                        IV




  Chapter        4    Comments            (Continued)

                      Chrysler            comments:
                      The statistics                      used        cite             percent              of      testing          and percent
                      of      listed       models               in    the         September             guide.               These         statistics
                      fail       to acknowledge                       that         the     September                    3 cutoff           date
                      already           precluded                an amount                of     testing                and a number                  of
                      models           from        the      September               guide.              The statistics                         con-
                      cerning           tests         available                   and number                of models               listed
                      should           be based             on the            models            offered             for      sale         in
                      September,               not        the        models         listed             in        the      September             guide.

                      Further,            advancing                  the      cutoff            date        without            sufficient                  notice
                      (at       least         one model               year)         would          be unfair                 because
                      manufacturers                   with           greater             resources                could        accelerate
                      their        testing            programs                to meet            the        new schedule.                       Smaller
                      manufacturers,                      with        less         resources,                would           not     be able               to
                      accelerate                their           testing            schedules                to meet            the        advanced
                      cutoff           date.             In effect,                the      Larger           manufacturers                      would
                      gain       a fuel            economy            level         advantage                because               they        have        the
                      resources                to buy the               extra            testing            that          offsets          EPA's
                      selection               of     "worst           case"         emissions-data                         vehicles             for
                      certification                      that        are      used        for      the           fuel      economy             value
                      determination.


   page     27        GAO states:
                      "Our       analysis                showed            that      the        four        domestic               manufacturers
                      had 100 percent,                          97 percent,                 82 percent,                    and 67 percent                        of




                                                                             64
APPENDIX     IV                                                                                                                         APPENDIX             IV



Chapter   4 Comments            (Continued)

            their          testing           done          by July           31.         Foreign            manufacturers                        also
            had a substantial                            portion           of      their          testing          done            by July             31.
            Four         of nine         foreign                manufacturers                     had 100 percent                         of     their
            testing           complete               by July           31,         two were           over         90 percent                    com-
            plete,          two were                over        80 percent                 complete,             and one was only
            59 percent               complete."

            Our analysis                 also            showed        that         if      tests         completed                 after
            July          31 had not                been        used       in      the      computations,                      changes
            would          have      occurred                in    one of           the      city,          highway,                 or com-
            bined          ratings            for        only      15 percent                 (72      of 465)                of     the       models
            in      the     49 state                guide         and 4 percent                     (12 of         291)            of      the      cars
            in     the      California                   guide.            Eighty-one                percent             of        the     changes

            were         1 mile         per         gallon         differences,                    10 percent                  were         2 miles
            per      gallon          differences,                    6 percent               were         3 miles              per        gallon
            differences,                 and 2 percent                      were           4 miles          per      gallon               differ-
            ences."


            Chrysler           comments:
            These          statistics                do not         point           out      that         they       are           the      percent
            of      testing          used           in     the     first           edition           of     the      guide               and not
            the      percent            of     testing             available                for      use when the                        models
            are      introduced                in        September.                 The same is                   true         of        the
            statistics               on the milesper                         gallon          differences                      between            the




                                                                       65
APPENDIX        IV                                                                                                                        APPENDIX                   IV



    Chapter          4    Comments                (Continued)

                         July      31 cutoff                date         and        the         September              3 cutoff                date.           The

                         statistics                   should       be based                on the             percent             difference                  be-

                         tween        a value             calculated                    on July           31,        September                 3,      and

                         other        dates             throughout                 the     year          as     the        manufacturers                      con-

                         tinue        to        improve          their             product           offerings                 through               running

                         changes.



   page    28            GAO states:
                         "EPA emphasized                        that       it       must         have          enough             review            time      to

                         assure        the            accuracy           of        the     estimates                  published                 in     the

                         guide.


                         We agree                that      the         accuracy             of      the        estimates                 is     very

                         important,                   and EPA should                      continue              to         perform             the     necessary

                         review            to     assure          accuracy.                     However,              if      testing               can be

                         completed                sooner,              EPA will             still         have             sufficient                 time      to

                         review            the        mileage           figures             before             forwarding                  them        to     FEA

                         for      printing               and distribution                           of    the         guide."


                         Chrysler                comments:

                         This       statement                  fails          to     acknowledge                  that            the      accuracy             of        the
                         estimate                is     dependent               on more             factors                than         just         assuring

                         that      no transcriptional                                errors          were         made when handling                                the

                         calculations.                         One point                 that       is        extremely                 significant                 was

                         not      stated.                 The point                is     that       a determination                            of      the        fuel




                                                                         66
APPENDIX         IV                                                                                                                          APPENDIX                 IV


 Chapter       4 Comments            (Continued)
                  economy           estimate                for        a particular                  model          is         both         a subjective
                  and an objective                          process          based            on data          available                      at        the
                  time      that       the            estimate            must     be made.                   Statistically,                             the
                  greater           the      number               of    tests          run      on any given                         car,         the        more
                  accurate            the       fuel          economy            number             that      is        assigned                  to     that
                  car      will      be.              The more vehicles                             tested         within                 a model             type,
                  the      more accurate                      the        information                 on which                  to base             the
                  reasonableness                       of     each        individual                  test     result.                      Finally,
                  the      higher           the        percentage                representation                          of         the     vehicle
                  configurations                       tested           within          a model              type             the     more accurate
                  the      fuel       economy                estimate            for         that      model             type         will         be.

Chapter        5 Comments
page      37      GAO states:                                                           Miles          per gallon                         loss
                  "Environment                                                                         (percent)
                      18 miles            per         hour        tailtiind            (19% gain)
                      18 miles            per         hour        crosswind                                     2
                      L8 miles            per         hour        headwind                                     17
                                                  .                                                             .




                  State       of      Vehicle               Maintenance
                  One plug           misfiring                    50% of time                                       7


                                                  .                                                                 .
                                                                                                                         1,



                  Chrysler            comments:
                  The percent                (gain)               Loss      in    fuel          economy             for             the      preceding
                  cited           environment                 conditions                do not             agree              with          the        percent
                  (gain)           losses             given            by EPA/FEA             in      the     first                 edition             of      the




                                                                           67
APPENDIX IV                                                                                                              APPENDIX IV


  Chapter   5 Comments          (Continued)
              1977     Gas Mileage                  Guide.


              The state             of vehicle               maintenance              percent             loss         for         one plug
              misfiring             is dependent                  upon      whether          the        vehicle              is        equipped
              with     a 4,         6, or 8 cylinder                      engine.            This         difference                    should

              be indicated.


2age 38       GAO states:
              "Although             data       is        insufficient               to draw            firm       conclusions
              concerning              the      reliability                 of EPA gas mileage                          estimates,
              indications                are     that         they       are      higher          than        consumers                  ex-
              perience          in       everyday             driving          because            of     the      many ranges                        of
              variables              which          are     not       controllable                in     Laboratory                    testing."


               Chrysler         comments:
               This       conclusion                is     only       partially            correct             and is             also         in-
               complete.                It     does        not     explain          why       36% of             the     customers
               surveyed          by FEA get                  better        fuel       economy             than      EPA estimates.
               It     also     fails           to explain               that      one major               reason         EPA estimates
               do not         reflect           customer              experience             is        that      the     vehicle
               configurations                   tested            to estimate              the         fuel      economy                of a

               model         type       may be different                       than    the        vehicle              configurations
               purchased             by the              customer.

               As the         fuel           economy         of automobiles                  becomes             more         and more                    of
               a discriminator                      on which            customers            base         their         decisions                     to
               purchase,             the       automobile                industry          will         continue                  to     implement




                                                                  68
APPENDIX    IV                                                                                                                         APPENDIX                 IV


 Chapter   5 Comments                 (Continued)

             fuel         economy             improvements                      into       their            products              and product

             lines         as they                become           feasible              to do so.                  The EPA policy
             of      establishing                     only         one        fuel       economy             rating          for         a model

             type         for         the     entire          model            year,            and only            publishing                  two

             fuel         economy             guides              (the        second            guide        only         adding          model

             types         not         included              in        the     first            guide)         during             a model          year,

             will         become             a major          deterent                  to manufacturers                          attempting

             to      inform            customers             of        improvements                    in    the      fuel         economy             of
             their          products.
             With         the additional                          testing            requirements                   associated                  with

             calculating                     a manufacturer's                           fleet          average            fuel         economy,
             it      becomes                feasible              to     maintain               a running             record             of      the

             frlel        economy              ratings             associated                   with        a model          type          through-

             out      a model                year.           This            affords            manufacturers                     the      oppor-

             tunity             for         public         recognition                   of      improvements                     in     their

             products                 and product                  offerings.                    These         data,         if        used       to

             update             labels            and      guides,              will       also             go a Long             way in

             minimizing                     the      credibility                   gap      in     the        published                miieage

             estimates.




             There          are        two major                  problems              associated                 with      maintaining                    a

             controlled                     and manageable                      schedule               for     updating                 fuel

             economy             Labels              and     guides.                 The first                is    to     avoid

             customer                 confusion              when different                        Label           values              appear

             on the             same model                 types             and       guide       Listings               show more




                                                                         69
APPENDIX     IV                                                                                                                            APPENDIX              IV


Chapter    5 Comments           (Continued)


             than         one fuel              economy                 estimate           for         a model             type.            This

            problem          can be solved                              in     a number           of         ways.           Labels             can be
             coded         or dated                  to differentiate                           the        vehicle           with         respect

             to     its     fuel          economy                 rating.               The codes               or dates                 can be

             displayed              in         the     guide.                  Manufacturers                    may update                  the
             vehicles          in         dealer's                 stock          with          revised            calibrations                       and

             hardware           (if            that         is     feasible)               and         revise             the      labels             to

             reflect          improvements.                              Where          vehicles              and         their          labels            can
             not       be updated,                    price             differentials                       or promotional                      programs

             can be used                   to        sell         the        different                fuel      efficient                  versions

             of     a given              model          type.



             With         respect              to minimizing                      confusion                  because              of     an updated

             guide         being          available                     at     dealerships,                    the        guide          could         be

             updated          semi-annually                             and could               be timed              to        arrive           at

             dealerships                   just         prior                to vehicles               with          updated             and

             dated         or coded                  labels.                  The updated                   labels          could          be

             referred           to         the        most          recent             guide          for      comparative

             information.                        The new guide                         could          contain             the          cummulative

             listing          of         all         values             and      indicate              the      respective                  code

             or date          associated                         with         each       fuel         economy             value.            The

             consumer           would                then         be made aware                       of     the      most             recent

             fuel         economy              improvements                      for      each         manufacturer                       and,        where

             no improvements                          were          made,         be notified                      that         only       one        set

             of     values          exist              for        a given              model          type.




                                                                        70
 APPENDIX              IV                                                                                                        APPENDIX          IV




    Chapter        5        Comments            (Continued)


                            The second                major      problem         to     be overcome            is     the        timely

                            publication                of     the    updated          guide.           FEA contends                that

                            it     takes        two months             to     publish          and distribute                the      guide.

                            It     appears            that     the     reason         that      it     takes       this      length         of

                            time       is     because          FEA is         not     prepared           to accomplish                the

                            task       on a more              timely        basis.           There       are   many examples
                            of     Federal            agencies         that      publish             information            in     a more

                            timely           b,sis.           Some examples              are:


            Agency                                                           Publication                                     Frequency

Office      of     Consumer            Affairs                       Consumer         News Letter                                Monthly
                                                                     Consumer         Legislative                                Monthly
                                                                       Report

National         Bureau          of     Standards                    Technical          News Bulletin                            Monthly

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                            If     FEA can            be set        up to      publish          and distribute                    an updated

                         guide          in     a timely             manner      and      EPA can calculate                       revised




                                                                              71
APPENDIX    IV                                                                                      APPENDIX             IV



Chapter   5 Comments          (Continued)

            fuel       economy       values          periodically,           the   accuracy      and credi-
            bility       of    the    fuel      economy           estimate      can be improved           con-
            siderably.


            Some additional               measures           that      EPA and FEA could           take    to
            increase          the    credibility             of      the   EPA mileage        estimate     woclld
            be:

                     * Communicate   the idea that mi'ieage    figures      are simply
                      "potential"  under ideal   conditions,     but do provide       a
                        good basis for shopping     comparison     (aLFdata     taken
                        under same eonditions).
                     * Show by actual    test   thru media coverage                            that some
                       drivers   can actually     exceed the mileage                           figures with
                       good driving   techniques.
                     . Remove the mystique    fromEPA                        numbers     bv showing       the    public
                       how they are determined.
                     . We also recommend                  that EPA and FEA increase  public
                       awareness  of good                 driving habits on fuel economy by:
                         . exposing    the public     to a positive     program   of visual
                           aids and readily       understood    results    (money saved) of
                           good driving    habits.
                         . sponsor   fuel               economy        driving    contests       to increase
                           awareness    of              potential          for given cars
                         . use driver    education     classes   to establish      good                          fuel
                           economy driving      habits    and techniques      with our                           youth
                           to form life     long habits.
                         . sponsor           high       school  fuel economy driving       contests      in
                           programs           like       the President's  physical   fitness      crusade.

             St should be noted                      that the FEA study by Abt Associates
             has indicated  that                     the credibility   g p could be minimized
             when the facts   are                    known.    Quoting fzom these conclusions:




                                                            72
APPENDIX      IV                                                                      APPENDIX   IV



    Chapter        5 Comments    (Continued)

                     "Interestingly,      the EPA combined    city/highway         estimate
                     seems to be an accurate       indication     of what actual
                     experience      will be like.    Buyer's   actual     gas mileage      is
                     about     one mpg less than the EPA combined          estimate."1




    1 ABT Associates,       Inc.,       Impact        of   the   FEA/EPA   Fuel   Economy
      Information     Program,         1976.




                                                 73
APPENDIX         V                                                                      APPENDIX   V




   D. A. Jensen                                                    Ford Motor Company
   Director                                                        The American      Road
   Automotive    Emissions    and                                  Dearborn,    Michigan-48121
   Fuel Economy      Off ice
   Environmental     and Safety
   Engineering    Staff
                                                                      May 23,           1977



   Mr. Walter    C. Herrmann,    Jr.
   Regional   Manager
   United States     General Accounting    Office
   Patrick   V. McNamara Federal     Bldg.
   477 Michigan    Ave.
   Detroit,   Michigan     48226
   Dear Mr.           Herrmann:
              This is in response      to your letter    of May 4,
   1977 requesting      my comments on your draft     report  en-
   titled,   "Convincing    the Public   to Buy the More Fuel
   Efficient   Cars:     An Urgent National   Need".
                   From my point           of view,   this  subject    presents
   the toughest,           most critical         task faced by the auto-
   mobile      industry       in the coming years.            I agree that
   without       significant         shift     in consumer preference
   toward smaller            cars,    the 1985 goal of 27.5 mpg fleet
   average fuel economy probably                    cannot be realized.
   Certainly,         a shift      in the other direction          would guaran-
   tee non-compliance              in almost any model year.            Our
   ability       to force the market toward smaller                 cars is
   quite     limited,        as evidenced        by recent   sales history,
   and we would therefore                  welcome constructive,       non-
   restrictive          aid in this direction.
             To this end, the                   three recommendations   out-
   lined  in the draft report                   are, in my opinion,   and in
   the order given:
           (1)        necessary     and welcome
           (2)       unnecessary,         of   limited   effectiveness             and
                     unworkable
           (3)       desirable      but    impossible     to attain



                                                 74
APPENDIX      V                                                                 APPENDIX   V



  Mr.     Walter      C. Herrmann,        Jr.                       May 23,      1977


  In the      following,           I would like to address each of these
  points      individually           and then mention a few less sig-
   nificant        items     you   may   want    to    re-examine   in   the   report.

  Recommendation    (1):             Establish         a Comprehensive   Paid
  Advertising    Campaign            Directed         at Prospective   Car Buyers
              This program I believe,           could be beneficial
  toward achieving        the desired    market composition.          The
  reason that such a campaign by an agency such as the
  FEA can augment the industry's            own small-car-oriented
  advertising     is &hat the andience will            perceive   no vested
  interest    or other possibly        negative      connotation   to the
  promotion.      For example,      appealing      to one's patriotic
  senses is quite      properly     the arena of government          and
  would probably     fall     flat  if attempted       by an individual
  manufacturer.
              On the other hand, the campaign must be even-
   handed in its appeal.      Favoring certain  manufacturers
   over others   would present   an unwarranted  interference
   in the free marketplace,
   Recommendation             (2): Make Available  Comprehensive                 Gas
   Mileage  Guides           at the Time New Models Are Available
   for Purchase
               I agree with Mr. Alm and Mr. Hill              that it is
  impossible     to provide      a mileage     guide of acceptable
  quality    at the time most new cars are introduced.                      In
  the report,      it is estimated       that a sufficiently           high
  percentage     of new cars will        have been certified           two
  months prior       to the model year start           so that a mileage
  guide could be assembled on time.                What this     fails      to
  take into account          is that many of the most fuel-
  efficient     calibrations       are those which are optimized,
  of necessity,        just prior     to introduction.        It would
  be a disservice         to the prospective        buyer to exclude
  these from the guide.
               Aside from the logistics        problem just mentioned,
   I believe     that little     in the way of fuel conservation
   can be accomplished         by advancing   the guide's   publication
   date.     Sales at the beginning        of the model year consist
   mainly    of large    fleet   sales and of large cars.        Small
   car sales historically          peak later   in the model year.



                                                75
APPENDIX    V                                                           APPENDIX   V


 Mr.   Walter   C. Herrmann,      Jr.                      May 23,      1977


 Fleet  purchasers      are extremely      well-informed        purchasers
 and the large-car-every-year            purchaser     probably     is the
 least  influenced,       as a group, by the material            in a
 buyers guide.       Therefore,      the number of early purchasers
 which would be influenced           by an earlier      edition     of the
 guide is quite      limited.      For this reason I believe            that
 the effort    required       to publish    the guide concurrently
 with the start      of the model year is out of proportion
 to its benefit.
 Recommendation   (3):        Reduce the Consumer         Credibility
 Gap in the Published         Mileage  Estimates
             The draft    report    correctly     concludes      that no
 single   fuel economy test can predict             the actual      fuel
 economy experienced       by the customer.          The assertion       in
 the report    that the average customer always experiences
 fuel economy lower than the certified               values    is mis-
 leading    however,   and does not lead one to the conclusion
 that the test values should be arbitrarily                 lowered to
 reduce the credibility         gap.    Indeed,    a recent      study by
 the EPA shows that the certified             values    are indeed
 achieved    in production     models with increased          mileage
 accumulation.
                I agree with the report's          conclusion     that the
 values published           in the guide are correct         only in a
 relative       sense.      Reducing the credibility         gap may best
 be confined        to educating       the prospective     buyer to this
 fact.      Any effort        to change the test procedure         or modify
 the values obtained             in order to arrive     at a more "accu-
 rage" number will            only result   in greater     complexity
 while    still     failing      to do the job.
             As it stands,    the guide's    value lies  in af-
 fording   a repeatable     basis of comparison     for automobiles
 of the same class.       A prospective     buyer is assured that
 the figures    cited   were derived    from the same measuring
 method and that they constitute          a valid  basis for corn-
 parison.
             There are a few minor points       you should con-
 sider    in the draft.       On page 2 it is stated   that EPA
 compares the gaseous emissions         with the amount of
 gasoline    used.    Actually,    the amount of gasoline   used
 is calculated     from the measurement of the gaseous
 emissions:     HC, CO, C02.


                                         76
APPENDIX     V                                                               APPENDIX    V



                                                 4

       Mr.   Walter     C. Herrmann,       Jr.                          May 23,   1977


                  On page 10, it is stated            that the automobile
       consumed 2.3 billion         barrels    of crude oil in 1975.
       The automobile       is a large consumer but not that large.
       The actual    figure    is 1.5 billion       barrels.    Given that
       the total   national      consumption     of crude was 6 billion
       barrels,   the latter      figure     is calculated    by noting
       that all transportation           consumed half of 6 biilion
       barrels   and that half of the transportation             portion
       is consumed by automobiles.
                      Thank     you  for allowing      me to    comment      on your
       draft report.            If I can be of       further    help,     please do
       not hesitate           to contact   me.
                                                        Sincerely,




                                            77
APPENDIX VI                                                            APPENDIX VI



                     GENERAL MOTORS CORPORATION
                         GENERAL       MOTORS        BUILDING
                            DETROIT,    MICHIGAN        48202


ROBERT   F. MACILL                                              June 2, 1977
  VICE PRESIDENT




      Mr. Walter C. Herrmann, Jr.
      Regional Manager
      U.S. General Accounting  Office
      477 Michigan Avenue
      Detroit,  Michigan 48226

       Dear Mr. Herrmann:

             Thank you for the opportunity    to review the
       draft    report "Convincing the Public to Buy the More
       Fuel-Efficient    Cars: An Urgent National   Need."

             In general,    we find no problems with respect
      to the public information        portion    of the report    --
      roughly through page 22.         If an advertising     program
      is to be considered       to increase    awareness of fuel
      economy data, our advertising          people believe    it would
      be helpful   to first     conduct a pilot     program to determine
      potential   effectiveness      of the advertising     before
      launching a major campaign nationwide.

             In addition,     we urge that the objective   of any
      advertising     program be strictly    to increase awareness
      and not go beyond this by using examples from a
      manufacturer's      products.   As I am sure you can
      appreciate,     such examples could result     in an unfair
      competitive     advantage.

            Turning to the       question of timely distribution
      of the EPA Mileage        Guide, the draft   suggests advancing
      the testing   cut-off      dates in order to have the Guide
      available   in dealer      showrooms when the new cars go on
      sale.



                                                78
APPENDIX VI                                                   APPENDIX VI


Mr. W. C. Herrmann,       Jr.       -2-                June 2, 1977


        As you may know emission certification             and
fuel economy testing      already begins early in September
of the previous year.        Even beginning      this early,         the
testing    reaches a peak around July and August, just
prior to the start      of production.        Advancing the
cut-off    date for data to be included in the Mileage
Guide earlier     than the last week of August or the
first    week in September, more likely         will   result      in
fewer cars being listed       in the Guide because of the
extremely    heavy tsest burden that occurs during the
months of July and August.         Presumably,       some manu-
facturers    -- most notably foreign        manufacturers       --
may be able to complete their         testing    somew‘nat     sooner
due to a less extensive       number of models to be tested.
Rather than advancing the cut-off           date, perhaps, as
suggested in the report@ mileage comparison charts could
be made available     to dealers on a more timely basis
than the present Mileage Guide in booklet              form.

      Despite some possible    inaccuracies    in absolute
fuel economy values, we concur with the conclusion
expressed in the draft   report    that the fuel economy
values can be useful to consumers in comparing various
makes and models.   For this purpose,       absolute accuracy
would be of secondary importance.

      In summary, except for the very difficult      problems
associated  with advancing the cut-off     date for providing
test data, the report     appears to be a fair evaluation
of the present situation,     and the recommendations    reasonable.

       As another matter,     you might want to consider
incorporating      in the report    a reference   to other
potential     fuel economy savings which could be accelerated
by government information        and action programs.        More
education of the public,       and new drivers      in particular,
as to more fuel efficient        driving   habits   and the fuel
economy benefits      of proper maintenance could be of real




                                     79
APPENDIX VI                                                     APPENDIX VI



Mr. W. C. Herrmann,     Jr.       -3-                    June 2, 1977


value.    Also, a significant       gain could be made if the
government could persuade        states and localities    to
review and improve traffic        flow patterns:    for example,
right  turn on red.                          5-

     Thank you again for        the opportunity         to provide
you with our comments.




                                                  :..




                                   80
APPENDIX VII                                             APPENDIX VII


        PRINCIPAL OFFICIALS OF EPA AND FEA RESPONSIBLE
     FOR ADMINISTERING ACTIVITIES     DISCUSSED IN THIS REPORT

                                                Tenure   of office
                                                From             -To


                 ENVIRONMENTALPROTECTION AGENCY

ADMINISTRATOR:
    Douglas M. Costle                  Mar.       1977      Present
    John R. Quarles,  Jr. (acting)     Jan.       1977      Mar.    1977
    Russell E. Train                    Sept.     1973      Jan.    1977
    John R. Quarles,  Jr. (acting)     Aug.       1973      Sept. 1973
    Robert W. Fri (acting)             Apr.       1973      Aug. 1973
    William D. Ruckelshaus             Dec.       1970      Apr.    1973

DEPUTY ASSISTANT ADMINISTRATOR FOR
  MOBILE SOURCEAIR POLLUTION
  CONTROLPROGRAM:
    Eric 0. Stork                  May            1973      Present

                  FEDERAL ENERGYADMINISTRATION
ADMINISTRATOR:
    John F. O'Leary                     Feb.      1977      Present
    Gorman C. Smith   (acting)          Jan.      1977      Feb. 1977
    Frank G. Zarb                       Dec.      1974      Jan.    1977
ASSISTANT ADMINISTRATOR, OFFICE OF     ENERGY
  CONSERVATIONAND ENVIRONMENT:
    Martin E. Seneca, Jr. (acting)      Jan.      1977      Present
    Dr. Samuel J. Tuthill               July      1976      Jan.    1977
    Dennis W. Bakke (acting)            May       1976      July    1976
    Roger W. Sant                       Aug.      1974      May     1976




                                 81
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