New CAFE Rule to Allow Indian Auto Makers Access to US Market with Their Fuel Efficient Cars

The auto market in US is flooded with gas guzzling vehicles, especially SUV’s; however a new law in the US could help change this situation, also presenting Indian auto manufacturers with an opportunity to present their fuel saving small economical cars.

The new Corporate Average Fuel Economy or CAFE target, which have finally been agrees upon by the Detroit auto manufacturers and the White House, is to develop cars that provide 54.5 mpg by 2025. This move will reportedly enable MNC’s such as Suzuki, or auto manufacturers such as Tata Motors to present their small car expertise in the US market as well.

The new standards of CAFE are a lot more modest in comparison to what the Indian industry has targeted. According to SIAM, the current CO2 fleet average in India is 155gms a litre, which is the same level being targeted by American car manufacturers, 250gms a gallon by 2016.

Meanwhile, India has targeted to reach 123 to 125gms a litre by the year 2020 that would make Indian cars more fuel efficient in comparison to the standards set by the US CAFE of 24kmpl by 2025. Indian cars like the Nano already provide 27kmpl in test conditions. While the A-Star and Suzuki Alto provides a mileage ranging between 20 to 23kmpl, in comparison to the Chevrolet Beat’s 18kmpl.

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