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Old 13th October 2023, 18:20   #1
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The loophole that made SUVs become so popular in America

A good read that will give you some insight as to the SUV craze that started in America:

https://www.distilled.earth/p/the-lo...ilsturgeon.com

Quote:
The short answer is that auto lobbyists happened.

The intent of the Energy Policy and Conservation Act of 1975 was to make all passenger vehicles in America more fuel efficient. But auto lobbyists convinced regulators to make a subtle change to the bill’s text. While efficiency standards for cars would be written into the law itself, the standards for trucks were to be set by regulators at the Transportation Department.

This proved to be a genius, if unethical, strategy. Out of the public eye, lobbyists were able to score regulatory wins that would have consequences for decades.

One of the first things that officials at the Transportation Department had to do was define what a truck was in the first place. Automakers convinced them to go with the vague definition of “an automobile capable of off-highway operation.” Thus, as long as an SUV had four-wheel drive and decent ground clearance, it could avoid the more stringent car regulations and instead be regulated as a truck.

Automakers also convinced regulators that any vehicle with a gross vehicle weight above 6,000 pounds should get a carve out. Their justification was that vehicles this big were made for commercial uses like farming, not shuttling kids to football practice.

When these emissions rules were first proposed, a third of vehicles produced had a gross vehicle weight of more than 6,000 pounds. In order to avoid regulations, automakers started producing heavier cars. By the time the rules were finalized and implemented a few years later, two-thirds of cars were heavy enough to avoid the regulations.

Last edited by GTO : 14th October 2023 at 16:48. Reason: Adding article excerpt :)
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Old 13th October 2023, 20:43   #2
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Re: The loophole that made SUVs become so popular in America

Quote:
Originally Posted by Cresterk View Post
A good read that will give you some insight as to the SUV craze that started in America:

https://www.distilled.earth/p/the-lo...ilsturgeon.com
Yes, the truck classification was a well known trick. Our 1998 Jeep Cherokee in Kansas City was registered as a truck!

Jeroen
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Old 13th October 2023, 21:32   #3
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Re: The loophole that made SUVs become so popular in America

Also adding the same subject in video form:
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Old 13th October 2023, 22:20   #4
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Re: The loophole that made SUVs become so popular in America

On top of this add Section 179 deduction or tax write off.

Heavy SUVs, pickups, and vans with more than 50% business use and over 6000 lbs get this provision. Up to $28,900 of the cost of vehicles rated between 6,000 lbs GVWR (Gross Vehicle Weight rating) and 14,000 lbs, can be deducted using a section 179 deduction.

Thats a big incentive for people to buy a big truck as opposed to a small efficient one. This is probably going to be the writer's part 2.
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Old 13th October 2023, 22:52   #5
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Re: The loophole that made SUVs become so popular in America

We have similar rules here in India. Not only for SUVs or based on GVW. Our lawmakers effectively chocked the tax loophole and the High and Mighty with the ultimate ego deflater.

A very simple idea: the yellow board.
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Old 13th October 2023, 23:42   #6
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Re: The loophole that made SUVs become so popular in America

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Originally Posted by sandeepmdas View Post
Our lawmakers effectively chocked the tax loophole and the High and Mighty with the ultimate ego deflater. A very simple idea: the yellow board.
Can you please explain this as incidentally, saw a yellow plate Rolls Royce in a video and the person was saying that many luxury cars are opting for the yellow plates these days.

Whats the added benefit of registering a luxury car as a taxi?
- Being able to take it anywhere in India without need for re-registration?
- Is there a lesser road tax burden for a luxury taxi compared to a luxury private car ownership?
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Old 14th October 2023, 09:58   #7
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Re: The loophole that made SUVs become so popular in America

Years back used to think why they were calling the Rav4 and CRVs as light trucks. So basically if it is 2WD a model is a passenger vehicle. But the same vehicle with AWD becomes a light truck?

More than the lobbying, I believe the US government kept the loophole open for the simple reason that when the Big three were getting pounded by the foreign automakers in the 80s and 90s, the pickups and SUVs remained segments where the domestic manufacturers were still ruling. Even after bringing in competitive models, foreign automakers couldn't fight the Suburbans and F150s straight on, while the domestic automakers couldn't fend off the Camrys and Accords.

Also once people got hooked to the higher driving position, then no way they would be willing to crouch down. Manufacturers tried in the 2000s with sedans having high positioned seats, but no use. The cool factor that made minivans uncool played here again.

Then again. Worldwide thing. The CO2 regulations that favoured diesels in Europe. The loophole that made Thailand second largest market for pickup trucks in the world with even the Hilux and Ranger calling Thailand as home. We too had the Tata Sumo using the loophole, subsidised diesel making everyone buy diesel ~2010. Not the norm, but we have the 1600kg Bolero Neo classified as a small car, while the 1300kg Corolla used to be taxed as an SUV.

Quote:
Originally Posted by sandeepmdas View Post
We have similar rules here in India. Not only for SUVs or based on GVW. Our lawmakers effectively chocked the tax loophole and the High and Mighty with the ultimate ego deflater.

A very simple idea: the yellow board.
I guess the Rolls Royce does offer taxi ride, atleast in front of media for the attention seeking owner.

The Ferrari was a clear case of misusing the EPCG scheme by a Kovalam resort owner. Guess they converted to private registration and it is now in Bengaluru AFAIK.


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Originally Posted by PaddleShifter View Post
Can you please explain this as incidentally, saw a yellow plate Rolls Royce in a video and the person was saying that many luxury cars are opting for the yellow plates these days.

Whats the added benefit of registering a luxury car as a taxi?
It used to be an old practise. Many would buy on yelow plates for the lower taxes. Yearly taxes instead of the 15 years bulk tax. Also socially, they can be modest about using a taxi or making it seem as an investment rather than splurging on a luxury car. But atleast in Kerala, no one is doing it right now. The practice stopped in the early 2010s itself.

Actually it used to be a hassle whenever interstate trips are done. Permits to be taken. Driver needs to have badge et al.

Last edited by DicKy : 14th October 2023 at 10:08.
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Old 14th October 2023, 12:19   #8
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Re: The loophole that made SUVs become so popular in America

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Originally Posted by PaddleShifter View Post
Can you please explain this...
DicKy has already explained your doubts.

It is impossible to describe the billionaire owner who leads an eccentric lifestyle and publicly describe himself as Thonniyvasi in Malayalam. Roughly translated as Eccentric, Rioter, a person with a "devil may care" attitude. I personally like him for his frankness and attitude.

YouTube can help you. Search YT for Bobby Chemmannur or just Boche.

OT.

Last edited by sandeepmdas : 14th October 2023 at 12:25.
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Old 14th October 2023, 17:44   #9
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Re: The loophole that made SUVs become so popular in America

The fuel efficient car policy in the US was beefed up during 1977-1981, when Jimmy Carter was the US President. He said the program was aimed at reducing gasoline consumption by 10 percent below its current level by 1985. He warned that if this and other major goals were not met year by year, “our plan will call for strict conservation measures if we fall behind.”

From the NY Times link below:-

Quote:
“Those citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury,” Mr. Carter said.
The President thinks that he is facing “the greatest test of his leadership he will ever face,” according to Hamilton Jordan, one of Mr. Carter's principal assistants, and Mr. Carter said in his speech that his forthcoming program would be unpopular and would surely draw the fire of “all the special interest groups in the country.”
This NY Times link provides an insight of what this policy to come in future was like:-

https://www.nytimes.com/1977/04/19/a...smid=url-share

For instance as the going was becoming tough, General Motors introduced the J platform, or J-body for compact cars from the 1982 to 2005 model years. For the third generation of compact cars designed by GM, the J-body marked the introduction of front-wheel drive for its compact model lines, simultaneously replacing the rear-wheel drive H-body and the European U-body. The other US carmakers followed. VW sensing a good opportunity introduced their VW Rabbit ( the Yankee's VW Golf) and set up their assembly plant, if I can remember in Pennsylvania.

The backdrop for all these changes was the Arab-Israeli war of late 1973. Oil then instantly became a weapon as prices of crude oil were jacked up almost two times the prewar rates by the cartel. The US carmakers were caught napping. GM had only the Chevrolet Chevette, Ford its Pinto and Chrysler, the Plymouth Hunter (replica of the Rootes Hillman Hunter). Chrysler had just bought brands of the Rootes Group of U K. Soon, the Japanese invasion in the US car market followed and from importing fully built units, the Japanese set up assembly lines.

Quote:
The intent of the Energy Policy and Conservation Act of 1975 was to make all passenger vehicles in America more fuel efficient. But auto lobbyists convinced regulators to make a subtle change to the bill’s text. While efficiency standards for cars would be written into the law itself, the standards for trucks were to be set by regulators at the Transportation Department.
The above quote about the Energy Policy and Conservation Act 1975 from the OP was just post the 1973 oil shock. In 1975, President Gerald Ford was at the helm, taking over from President Nixon, post his resignation after the Watergate scandal. After he had risen from his Vice-Presidency to the White House top post, he was not very vocal about the energy policy in his public speeches. The energy policy and the stringent norms for domestically sold cars in the US came full circle, post the newly elected President Carter's inaugural after 21.01.1977. He was very vocal in targeting gas guzzlers and his first state of the union address in January 1978 carried quite a few paras about the proposed energy conservation policy.

The SUV classification and the "truck" loophole was used to the hilt, to the pleasure of both carmakers and carbuyers in the decades that followed.

Last edited by anjan_c2007 : 14th October 2023 at 18:05.
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Old 15th October 2023, 13:11   #10
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Re: The loophole that made SUVs become so popular in America

Yes this is a vicious cycle that will just keep getting worse and worse as more people opt for SUV's. It is hard to drive an Wagonr or Kwid when you are surrounded by Fortuners and Harrier's. This will push people who are planning to buy small cars to opt for bigger SUV's even if they are not willing to buy such a big car.

Also as more and more customers buy big cars, manufacturers will invest more R&D in big cars. This is a deadly Spiral that will keep on destroying small cars😔.Its already at its peak in the US.Hope it wont get as bad here too.
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