The election results a couple of weeks ago seem to change the direction the federal government was taking the automobile industry.
To use an automotive analogy from the campaign, the elections have put the car back in drive so we don't have to worry about the short-term impact of what looked like a disastrous road.
It will be tough enough for the industry to reach 35 mpg CAFE in the next few years. But the proposal to mandate up to 62 mpg by 2025 would be impossible without a breakthrough in technology.
The Republicans will control the House and the critical committees that oversee much of the automobile industry, and there will now be six auto dealers or former dealers in Congress who can present the retailer's point of view.
Significantly, there also has been a dramatic shift in the control of state legislatures across the nation.
Meanwhile, General Motors has launched an IPO, to be followed—sooner or later—by Chrysler.
There is going to be a new attitude in Congress and the states toward the automobile industry and dealers. That will give the industry a much-needed breathing spell.
But it would be dangerous to assume that everything is settled. This is just a pause in the middle of never-ending change in the way the industry does business and the role of the car in our society.
The business is rapidly heading into the electrification of automobiles. There will be a serious overcapacity of electrics—whether hybrids, plug-ins or pure electrics. Manufacturers will have capacity far exceeding demand for at least a decade, maybe forever.
Around the world there are rules for the reduction of carbon dioxide. Remember that higher CAFE standards in the U.S. are another way of reducing CO2 by reducing consumption of petroleum.
The price of petroleum will continue to rise, and we might see more incentives for vehicles that don't use petroleum. Even so, we can expect more use of diesel to power vehicles in North America. The U.S. government will have a much friendlier face toward the industry.
The auto industry in America gets a breather. But that's all it is. Nothing is permanent in this industry.
Crain is editor-in-chief of Automotive News and editorial director of Rubber & Plastics News.