While newly passed CAFE regulations will require all automakers to average 31.6 mpg fleet-wide by 2015, the new standards will have a greater impact on domestic automakers, a new report finds. The Big Three will have to pay about twice as much as their Japanese counterparts to comply with the new regulations.
In all, it is expected that the Detroit 3 will pay about $30.6 billion — including $15 billion by General Motors alone — to bring their fleets inline with the new regulations, according to Automotive News. But because Japanese automakers already produce more efficient vehicles, it will only cost them about $14.85 billion to meet the new standards.
The short lead time will also play into the expense associated with making more efficient vehicles. “That’s not even really allowing for a full model change from where we are today,” Rebecca Lindland, a Global Insight auto analyst, told 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 also speculates that market conditions will likely keep new vehicle sales under 16 million units through 2010. However, Global Insight also predicts sales to top the 18 million mark in 2015, largely due to shifting demographics and pent-up replacement demand.
