Focus on Fuel Economy Would Boost Profits for U.S. Car Makers

0

Hummer_GM_Fuel.jpgDetroit car makers would increase profits by $3 billion annually and significantly boost sales if they improve the fuel economy of their vehicles by 30 percent to 50 percent, according to a new study.

Conducted by the University of Michigan’s Transportation Research Institute, the study found that a major reason for the precipitous decline of Detroit’s sales and profits in recent years was the refusal of the Big Three automakers to recognize the importance of fuel economy to consumers. That failure meant the steady loss of market share to foreign car companies whose vehicles got significantly better mileage, the study said. Had the Big Three paid attention to their own market research showing the importance of fuel economy, “they would not be in Chapter 11 today,” said a co-author of the study.

The study concluded that increasing average mileage to 35 to 40 miles per gallon would boost profits and increase sales equal to the production from two large vehicle assembly plants.

This article originally appeared on Yale Environment 360 at http://e360.yale.edu

[photo credit: nolageek]

About Author

Join the Conversation