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Automakers to gain on new gas mandates

U.S. automakers have underestimated the importance of fuel efficiency to consumers, but new federal standards are expected to help the companies turn a profit, according to the results of a University of Michigan study released Monday.

Researchers at the U of M Transportation Research Institute said plans for vehicles to be 30 percent more efficient by 2016, along with federal intervention at General Motors Corp. and Chrysler Group, are forcing the companies to pay closer attention to fuel efficiency when designing new cars, something the automakers failed to do in the past.

At times there was a concerted effort by company officials to discount the results of consumer research when making planning decisions, said the authors of the report, also former GM employees.

"It is standard practice to discount consumer research. It was only applied to safety and quality issues," said Walter McManus, director of the automotive analysis division for the institute and co-author of the study.

He said that people abandoned American-made vehicles in favor of fuel-efficient Japanese models, leading to the downturn of all three automakers.

But U.S. automakers now have a chance to catch up, as vehicles must average 35 mpg by 2016. The study estimates a combined $3 billion in annual profit for the Detroit companies as consumers gain greater options for more fuel-efficient vehicles.

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