Sales of small cars expected to surge with latest US standards

Monday 01 August 2011, 10:19 AM by Vikas Yogi

With new targets for fuel economy penned down in the US, big cars are likely to loose their weight and size to keep in tune with the new standards. The American auto market will now become a hunting ground for small car manufacturing countries like India to gain some export profits.

The new fuel agreement, called CAFE (corporate average fuel economy) between White House and Detroit top people, has set a targets of 54.5 miles per gallon by 2025. The decision may not be welcomed by the local companies but India will love it, as global Indian players like Tata and Maruti have now mastered the art of designing world class small fuel efficient cars.

Kumar Kandaswami, senior director, Deloitte said, “CAFE standards would mean the cars in the US are likely to get smaller in the coming years. Given India is amongst the largest manufacturing bases for small cars, it could mean opportunity for exporting vehicles or components."

An Indian subcontinent player like Tata Motors has produced Nano with fuel economy as high as 27 kmpl under testing conditions; Maruti Suzuki Alto is also not behind and offers 20-23 kmpl and the latest to join the club is the Chevrolet Beat with figures of 24 kmpl.

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