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New CAFE standards set to take affect in 2015 have automakers in a hurried frenzy. Meeting target CAFE numbers of 35.5 miles per gallon within the short five-year time frame is no easy feat. Current standards, set at a fleet average of 27.5 mpg, will quickly become a thing of the past. As automakers push to meet the new requirements, decisions must be made. These decisions could best be regarded as risky bets that could impact an automakers success in the years ahead.

New rules within the CAFE guidelines will require many compact vehicles to achieve even higher numbers than the 35.5 mpg listed above. It's a bit technical, but put simply, the more compact vehicles a company sells, the higher its fleet average must be. This may sound simple, but compact cars may be hard to sell if the technology required to meet the goals adds a significant amount to the vehicle's bottom line.

Automakers are at a crossroads where they must decide which approach will prove to be most beneficial. Should the diesel engine be employed to meet CAFE requirements? Should hybrid powertrains be widely adopted? Automakers must answer these questions and many more. The wrong answer could spell disaster for market share and profits, and the Environmental Protection Agency estimates that new CAFE requirements will increase a vehicle's price by an average of $1,300. Others predict numbers far exceeding these claims, but no matter the numbers, cost is a major concern in the compact class of cars.

Here's a breakdown of some choices automakers should consider; improve gasoline engines to extract up to 20 percent more fuel efficiency, more widespread adoption of diesel engines, aerodynamically design vehicles for improved efficiency, add start/stop features, add more mild hybrids and consider weight saving measures or electrify vehicles. Each option has an associated risk versus cost versus reward factor that must be weighed out precisely for automotive success.


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[Source: Automotive News - Sub. Req.]