CAFE regulations

Posted on Monday, 26 May 2008 , 13:05:58 byEmil

Filed under caferegulationjapanNone

CAFE regulations

While the new passed CAFE regulations will be requiring all carmakers to average 31.6 mpg fleet-wide, this by 2015, the all-new standards will be having a greater impact on the domestic automakers. The Big Three will pay around twice much as their counterparts from Japan to comply with these new regulations.

So, it's expected that Detroit 3 will be paying around $30.6 billion — that includes $15 billion by GM alone — bringing the fleets inline with the all-new regulations, this according to Automotive News. So, because Japanese carmakers already make more efficient autos, it will just cost around $14.85 billion for meeting these new standards.

This short leading time will play also into the expense that's associated with producing more efficient autos. "That's not even really allowing for a full model change from where we are today," said Rebecca Lindland, Global Insight auto analyst, to the Automotive News. "That means you've got to start getting these vehicles out right now and making drastic changes to your upcoming plans. It's going to be incredibly expensive."

Global Insight speculates also that the market conditions will probably keep new car sales under 16 million models through 2010. So, Global Insight predicts also sales to reach the 18 million mark on 2015, largely because of the shifting demographics and the pent-up replacement demand.