Detroit-based automakers stand to gain market share and increased profits under proposed new fuel economy policies for the US, according to a new study by the University of Michigan’s Transportation Research Institute (UMTRI).

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

Under the highest proposed fuel economy standard of 35 miles per [smaller US] gallon, General Motors, Ford and Chrysler stand to make $US14.4bn by 2017 – over $6bn more than the competition – the study said.


“The Impact of Attribute-Based Corporate Average Fuel Economy (CAFE) Standards on the Automotive Industry is the first rigorous analysis of the economic impacts of current legislative proposals to raise CAFE under the reformed ‘attribute-based’ structure, said the director of UMTRI’s automotive analysis division, Walter McManus.


His preliminary analysis evaluated three scenarios that represent alternatives under consideration in the US Congress. Whereas historic CAFE standards set one benchmark for every automaker, the reformed system fundamentally alters the impact of the standards on individual companies by setting standards based on a vehicle’s attributes, such as size.


“The new, attribute-based CAFE is not one-size-fits-all,” McManus said. “It takes into account the differences between vehicles and light trucks, which will have lower targets than cars. The new system doesn’t penalise the ‘Big Three’ for making large cars and trucks, but it does require that they improve the fuel economy of those vehicles. In so doing, they will gain market share and boost profits.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Among the study’s findings:



  • An attribute-based CAFE would mean lower standards for Detroit’s automakers. Under a size-based standard of 35mpg, the Big Three could be required to meet a 33mpg standard, while the rest  of the industry would have to meet a 38mpg standard.

  • An attributed-based CAFE yields greater gains in market share and profits for the Big Three than for the rest of the industry. Detroit automakers stand to receive more of the profit gains from higher CAFE because they will be making improvements that have higher market value and higher profit margins.

  • Higher CAFE standards yield higher profits. The strongest CAFE proposal currently under consideration in Congress provides the greatest profit for Detroit automakers. GM, Ford and Chrysler have projected profits of $14.4bn by 2017 — more than twice as much than the weaker proposal under consideration.

“Many in Washington are discussing the old form of CAFE and are not directly dealing with the new reformed, attribute-based CAFE that legislative proposals would actually create,” McManus said.


“As the House of Representatives considers CAFE legislation, members should be aware of this important distinction and the impacts on costs and profits it will create.”