Mr. RAFTERY. We believe there is little justification for citing a grossly inflated $20 billion figure; $20 billion is a lot of money; $10 billion is a lot of money; $5 billion is a lot of money; and $2 billion is a lot of money, so if there is a shortcoming it is important that Government and industry both address the problem with the idea again of satisfying the motoring public.

In another area we do agree with the report's apparent endorsement of diagnostic inspection. Such inspections could indeed be useful in reducing unnecessary consumer expenditures. Unless something is done about it, we are faced with a situation where conceivably every make and model of vehicle will have a different. type of diagnostic connection or umbilical cord. Just imagine what this will do to service and repair. No repair facility can stock this wide variety of plugged-in devices needed to diagnose a wide range of vehicles.

I might mention that might be very, very good for the producers of diagnostic equipment, but I doubt very much if even they would be in favor of having to produce and market a separate piece of diagnostic equipment for each make of vehicle.

It is not substantially different from having to plug your toaster into one type of electrical outlet, the light into another, the television into another, and so on.

Accordingly, we would encourage the NHTSA to promote a uniform type of plug-in device for diagnostic purposes in order to enable diagnostic inspections to be undertaken in a wide range of repair facilities at a reasonable cost.

Several years ago the National Vehicle Safety Advisory Council, which I served upon, addressed this problem.

The industry pointed out the difficulty in arriving at a standard concerning umbilical cords. I would recognize the industry would have a serious problem with this but I think this is also the kind of challenge both industry and Government must address on behalf of the motoring public.

We should also be thinking in terms of international standards. More and more the motor vehicle industry is a one-world industry. The vehicles are one-world vehicles and sooner or later the parts will be one-world parts and we should consider that in plans by the agency concerning work with the International Standards Organization, and in the development of standards.

In connection with motor vehicle inspection programs, NHTSA Administrator Claybrook mentioned earlier the need for the support of the States and the problem the States are having in implementing and funding an effective program. I share her concerns. We have spoken for the past year or two about the possibility, even though I realize there are tremendous overlappings in the jurisdictions of congressional committees, of funding a national inspection program through a 1-cent a gallon gasoline tax.

I don't have the figures with me today but studies conducted a year or two ago seem to indicate that 1 cent per gallon would fund a national inspection program administered by the States which conceivably would fund the purchase of equipment by whoever was doing the inspecting, whether that was State-owned and operated or State licensed or whatever, and, in addition, provide the necessary funds for the establishment of a national computer bank

which both Government and industry could use to collect information on effectiveness of inspection programs and the overall cost efficiency of maintenance of vehicles.

Third, we recognize that automotive repair is a highly charged, emotional issue for a number of reasons.

Based on that fact, we strongly believe that the solution to any proven problem must be rooted in a rational and mature approach, free from the emotional aspects. Support for reasonable programs can be gained from both the industry itself and from the American motoring public, not by sensationalizing the issue in the public press to gain temporary support for questionable programs, but through cooperative efforts based on real world facts which are honestly analyzed.

Again let me emphasize that my remarks have been preliminary in nature, and that MEMA intends to sponsor a full industry study of and reaction to the NHTSA report. We will be pleased to report our conclusions back to the subcommittee so that it can continue to exercise effectively its very important oversight function.

I would like to additionally comment that as we study the overall auto repair and service industry in the United States, I hope that we would not undo what (even with its shortcomings at times), is still the most effective and least costly system in the world in terms of automotive product and service availability and costs. I thank you for permitting me to appear and will be pleased to try to answer any questions which members of the subcommittee may have.

Thank you very much.

Mr. ECKHARDT. Mr. Broyhill?

Mr. BROYHILL. In regard to the concerns you express about the magnitude of the problem that was stated by Ms. Claybrook, do you have anything to add to our colloquy with the former witness as to the size of the auto repair industry on an annual volume basis? Mr. RAFTERY. Yes, Mr. Broyhill. Our public figures as developed by our research department: In 1976 the total after-market-please note I am using the term after-market which the previous witness alluded to-not including body parts, tires, sound accessories, and fuel, approximated $41 billion.

We would estimate that a number between $50 billion and $55 billion is generally accepted as the total automotive aftermarket volume figure in 1978, sir. This, I think, is consistent with the NADA reports. Is that correct?

Mr. BROYHILL. That would be correct from the figures cited by the chairman.

The former witness indicated that he thought that a number of these other extraneous volumes of parts or what-not might be in there. You apparently agree with that statement. It is hard to determine apparently how much that is.

Mr. RAFTERY. I believe the figures that we use are basically allinclusive and include over-the-counter products, do-it-yourself items, accessories as well as functional repair parts. I don't necessarily believe that any of the statements are mutually exclusive. We would be pleased to provide the subcommittee with copies of our 1977 annual report which provided this figure and with any additional data we might have that would be relevant.

Mr. BROYHILL. Thank you very much.

Mr. ECKHARDT. Mr. Raftery, the NHTSA report defines what it means by consumer losses as including direct out-of-pocket consumer costs and readily quantifiable societal costs that could have been avoided by the correct action of all repair shops, vehicle owners, and manufacturers within constraints of a repair environment not fundamentally different from the current one.

Now, that is a rather broader definition from what the press ordinarily applied the $20 billion to. Frequently, headlines have talked about a $20 billion ripoff which would assume that the $20 billion applies only to those things which are in the nature of gross negligence or fraud.

Now, I can understand your concern about making that allegation with respect to cost, but what about the broader terminology that NHTSA has used? I assume some of these societal costs might be matters that could be corrected by things like a proper diagnostic process and to a certain extent by proper upkeep of automobiles, and so forth. Are you quite sure you disagree with NHTSA's analysis of that figure on the basis of their definition and, if so, could you give us any other source of information or any other statistical data that would be more dependable in its stead? Mr. RAFTERY. Based upon my experience, I intuitively feel that the $20 billion figure is very difficult to accept, particularly in light of the fact that in 1978 the total market for parts in the automotive aftermarket is only approximately $22 billion and related services (labor) is $10 billion or less. I am anxious to have our task force analyze the data carefully, not with the objective of simply rebutting the figure, but rather in determining how it can be analyzed, measured, and applied so that industry and Government can correct whatever shortcomings exist.

Mr. ECKHARDT. I think that would be very useful and important to this committee for our hearings and for our ultimate studies subsequent to the hearings. I would like to identify the proper figure utilizing the rather broad, general, and comprehensive definition of NHTSA and I would like to identify its elements. It seems to me that is important.

For instance, if a portion of that loss is because of perhaps quite honest failure to correctly diagnose a problem, then it calls for better diagnostic equipment. We need to consider this question of diagnostic equipment that can be generally used. We certainly want equipment widespread useability.

I understand from Ms. Claybrook's testimony that the agency is looking into the question of diagnostic equipment that could be used on many makes and models of cars. Of course, such efforts require cooperation from automobile manufacturers. We need to have a uniform State law with respect to things like making an estimate of the cost beforehand, and certain limitations on additional cost. If the problem is one of fraud, we need to strengthen State law through the district attorney's office. There is such a fraud division, for instance, in Houston, where we will hold one of our hearings. Thus, it seems to me this whole question of whether the $20 billion figure is correct or not also needs to address the question of what constitutes whatever unnecessary cost is involved in repair. Do you agree with that?